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According to a recent Gallup poll, 52% of Americans say that the performance of their investments affects their mood. Anyone who has begun to worry if they should invest in gold or not knows this to be true. Recently, media outlets have been flooded with advertisements for gold IRAs and other precious metals investments. Often, these advertisements evoke fear of stock market collapses, and sometimes they also promise huge profits to those who start investing in precious metals before it’s “too late.” For the many investors who are concerned about the performance of their retirement funds, understanding what a gold IRA is, and what it can and cannot do, can start to feel extremely important.

Unfortunately, some of the information about the profitability and stability of gold IRAs has been overstated in the media, leaving some consumers feeling disillusioned or skeptical. The truth, however, is that thoughtfully diversifying your investments with some physical gold, silver, platinum, or palladium held in a self-directed IRA is a sensible choice for many investors. Still, finding a trustworthy company that will be honest about the risks of investment and that will handle your assets according to IRS codes can be challenging. 

To help you separate fact from fiction in the gold IRA market, we’ve created a guide that explores gold IRAs in depth. Below you’ll learn about the IRS rules that govern the formation and management of all IRAs, and you’ll also learn what makes gold IRAs unique. After brushing up on IRA basics, you can view our list of top IRA custodial companies and read a buyer’s guide that explains the shopping process in greater detail. 

How We Chose the Best Gold IRA Companies

Informative

Gold IRAs, and IRAs in general, are not particularly easy to understand. There are multiple legal codes that contribute to the use of this financial product, and the distinctions between acceptable and prohibited transactions with IRAs can be fine. With this complexity in mind, we featured companies on our list that make high-quality information on IRAs easily accessible. Not every company covers all of the same IRA information, but they all have educational resources to offer.

Fair Marketing Tactics

Many companies that sell gold or that offer gold IRA custodial services make unsupported claims about “guaranteed” profits. Many also fill their websites with alarming headlines about impending economic disaster. Such companies try to tempt or frighten seniors into investing quickly without thinking first. We only included companies on our list that employed a more thoughtful sales approach.

Reputable

During our research process, we sought out companies that have a history of service and a good reputation in their communities. In a market that’s prone to scams, we found it important to eliminate companies from our list that had unclear origins or that had received negative reviews from reputable news organizations. 

Gold IRA Basics

gold ira

A gold individual retirement account (IRA) can also be called a self-directed IRA (SDIRA), an alternative asset IRA, or a precious metals IRA. These IRAs can hold other precious metals like silver, platinum, and palladium, as well as gold. Read on for a quick explanation of the most crucial gold IRA facts.

Custodians

All IRAs must have custodians according to the IRS. Below you can read more on what the custodian usually does for the client in a gold IRA. Often companies with the word trust in their name act as custodians, but banks and some other types of companies are also eligible. Any company that acts as your custodian should be able to explain why they are eligible to do so according to IRS code. 

Custodian duties:

  • At a minimum: Keep records, report to the IRS according to IRS codes, report to the client, release funds for investment purchases as directed by the client, release required minimum disbursements, handle other compliance concerns for the client.
  • May also: Provide educational materials on IRAs and investment, provide a secure online platform for account management, or provide recommendations that you deal with particular metals dealers, security companies, and storage facilities.

Keep in mind that companies that offer other kinds of IRAs often don’t offer precious metals IRAs due to the complexity of the product or the preferences of their client base. 

Fee Structures

There are many different kinds of fees that custodial companies use. It’s important to ask for a full disclosure of fees for each company that you explore. Below you’ll find quick explanations of each fee type.

  • Startup: The fee charged to open the account. It may also be called the application fee, set-up fee, or something similar. It should only be charged once for an IRA.
  • Annual: The amount you pay each year for the administration and maintenance of the account. This is the custodian’s compensation for keeping records, reporting to you and to the IRS, and more. Sometimes the fee will be charged quarterly instead of annually. It can be a flat fee or it can be a percentage of the asset’s value.
  • Brokerage: A percentage of what you pay for a metal that is profit for the one who sold it to you and/or the one who recommended the metal company to you. Only some trust companies benefit in this way from the metals purchases; many keep themselves separate from the sales process.
  • Shipping and storage: The cost of securely shipping and storing the metal in an IRS-approved, secure facility. These companies are usually separate from the trust company, but they are often paid through fees gathered by the custodian. These fees may be included in the annual fee. 
  • Transaction/services: Each company chooses which transactions and services are covered by the annual fee and which merit a separate charge. The following often come with a transaction fee: outgoing wire transfers, checks, cashiers checks, transfer out and closing fees, stop payment fees, IRS reporting corrections, and more. 

The 6 Best Gold IRA Companies of 2020

Company


Participates in the Sale or Brokerage of Precious Metals


Secure storage partners*


Fees


Memberships and Ratings


IRA Account Minimum 


The Entrust Group 


No


-CNT Depository, Inc. 
-Dakota Depository Company
-Delaware Depository 
-Idaho Armored Vaults, LLC


Setup: $50
Annual fee: $150 or based on asset value
Storage: N/A
Transaction/service: 9 possible fees, ranging $10-$250


-BBB Accredited 
-BBB Rating: A+ 


None


Sun West Trust


No


Delaware Depository




Setup: $50
Annual: $350
Storage: included in annual fee
Transaction/service: 11 possible fees, ranging $10-$150 each 


-RITA Membership 
-BBB Accredited
-BBB Rating: A+


$300 in cash at all times


Equity Trust


No 


None


Setup: $50
Annual: $205+ (based on asset value)
Transaction/service: 14 possible fees, ranging $10-$75


-RITA Membership
-BBB Rating: A+


None


PENSCO Trust


No


None


Amounts are unlisted but fees can be charged for:


-Account establishment
-Quarterly administration
-Transaction/services
-Closure and transfer out 


-BBB Accredited
-BBB Rating: A+


None


Fidelity Mutual


Yes, offers brokerage in partnership with FideliTrade 


FideliTrade


Setup: None
Annual fee: None 
Brokerage: 0.99%-2.90% of metals purchase
Storage: 0.125% of total value or $3.75 quarterly (may be prebilled) 


-BBB Rating: C-


$1,000


STRATA Trust


No


Delaware Depository or Brinks


Setup: $50
Annual: $75-$250 
Storage: $100-$140 annually
Shipping: $30+ (varies greatly)
Transactions/services: 13 fees, $30-$250 each


-RITA Membership
-BBB Accredited
-BBB Rating: A+


None


*Note: Before buying assets or consenting to their storage in any facility, you or your qualified representative should determine whether or not the facility meets the IRS requirements of being either a bank according to IRC 408(n) or being an approved nonbank trustees

The Entrust Group

Most Physical Locations 

The Entrust Group has 35 years of experience helping its customers understand and set up self-directed IRAs (SDIRAs). Based in Oakland, California and founded by Hubert Bromma, the Entrust Group is known for its helpful educational materials and its dedication to serving customers who want personal control over their finances. Currently, the Entrust Group is responsible for managing a total of almost $3.2 million in assets of all kinds. This brand works with both large businesses and individual customers, and it offers all types of SDIRAs, including precious metals, real estate, and much more.

The Entrust Group is unique because it has more locations than most other custodial companies (not including those offering metal brokerage, which may have more locations). The brand has four locations across the nation, including an office in Santa Monica, CA; Oakland, CA;  Nashville, TN; and Hackensack, NJ. The Oakland office has a team dedicated exclusively to precious metals IRA accounts. In addition to having a better reach of locations than most trust non-brokerage custodial companies, the Entrust Group also routinely holds local and national educational events that its customers can benefit from. 

Overview of The Entrust Group

Participates in the Sale or Brokerage of Precious Metals


No


Storage and Security Partners


-CNT Depository, Inc. 
-Dakota Depository Company
-Delaware Depository 
-Idaho Armored Vaults, LLC


Fees


Setup: $50
Annual fee: $150 or based on asset value
Storage: Variable
Shipping: Variable
Transaction/service: 9 possible fees, ranging $10-$250


Memberships and Ratings


-BBB Accredited 
-BBB Rating: A+ 


IRA Account Minimum 


None


Pros and Cons of Gold IRAs from The Entrust Group

Pros

  • Dedicated precious metals division: This company’s Oakland location specializes in precious metals IRAs. If you contact the Oakland department directly, you’ll be able to quickly connect with those who are most knowledgeable about the niche of precious metals investing without needing to be transferred through multiple departments. 
  • Low fees: This company’s startup and annual fees are on the lower end of what’s available from custodial companies. With just $50 for setup, $150 annually, and $0 fees attached to precious metals purchases, your initial out-of-pocket administrative costs should remain low. Alternatively, customers may opt for a fee based on asset value, but the minimum for that fee is $199, so most will be better off with the flat fee. 
  • Learning center: The Entrust Group keeps its website up-to-date with extremely informative articles on a variety of topics related to SDIRAs. If you’re on the fence about getting a gold IRA or are looking for easy-to-read information on self-directed IRAs of all sorts, this learning center is a great starting place.

Cons

  • Storage and shipping: Entrust does not provide information on storage and shipping fees because it does not have one dedicated storage or shipping company that it works with. Many other companies conveniently include the cost of storage and/or shipping in their administrative costs, so the fact that this detail on account costs cannot be obtained online makes estimating your total costs difficult.
  • Transaction fees: On its website, The Entrust Group states that it charges no transaction fees for precious metals purchases made through the SDIRA. This statement may leave customers with the false impression that there are no transaction fees, period. On the contrary, wire transfers, regular checks, cashier’s and bank’s checks, rush orders, return and stop payment orders, termination of an account, and a few other transactions all come with an extra fee. The lowest transaction fee is $10 and the highest (for closing an account) is $250.  

Sunwest Trust

Best Educational Resources

Sunwest Trust, located in Albuquerque, New Mexico, serves clients across the United States. This company has roots that go back to 1997 when it was called First Financial, but it adopted the name Sunwest Trust Inc. in 2003 when it expanded to offer not only escrow services but also IRA custodianship. Over the years this company has been trusted to help individual investors to facilitate the financial transactions of some large clients’ business plans via its escrow services. Sunwest Trust has provided services to the State of New Mexico and the New Mexico State Highway Department during major contracts. 

Aside from its reliable history in the business world, Sunwest Trust stands out because it offers exceptional educational materials. The CEO of Sunwest Trust, Terry White, has recorded numerous detailed YouTube videos that teach customers about the complexities of holding alternative investments in IRAs. These videos, rather than focusing on making sales, help the average investor understand her or his options better. Sunwest Trust’s emphasis on thoughtful investing instead of quick sales makes it a company you can trust.

Overview of Sunwest Trust

Participates in the Sale or Brokerage of Precious Metals


No


Storage and Security Partners


Delaware Depository


Fees


Setup: $50
Annual: $350
Storage: included in annual fee
Transaction/service: 11 possible fees, ranging $10-$150 each


Memberships and Ratings


-RITA Membership 
-BBB Accredited
-BBB Rating: A+


IRA Account Minimum 


$300.00 in cash at all times


Pros and Cons of Gold IRAs from Sunwest Trust

Pros

  • RITA Membership: Sunwest Trust has membership in the prestigious Retirement Industry Trust Association (RITA). This membership enables Sunwest Trust’s CEO and other employees to attend professional development conferences. Learning from the best in the field and growing in their understanding of how to best offer custodial services is important to Sunwest Trust.
  • Clear fee schedule: Sunwest Trust really does makes its fees easy to understand. All fees are listed on a clear, uncluttered page. Below the basic fee schedule, the company also provides a few paragraphs that explain why it charges certain fees, requires cash minimums in accounts, and generally operates accounts the way it does. The transparency of this company is refreshing for customers who like to know exactly what their money is doing. 
  • Storage included: Many customers don’t really want to spend the time finding the perfect storage company, and Sunwest Trust knows that. This company works with Delaware Depository, one of the most famous IRS-approved depositories in the nation, to hold all precious metals for its customers’ IRAs. This partnership makes abiding by IRS storage rules a cinch, and the fee for storage is automatically included in Sunwest Trust’s annual administrative fees.   

Cons

  • No investment recommendations: Sunwest Trust’s services do not include any investment advice or recommendations. Investors need to find their own precious metals dealers and to verify the quality of what they are buying prior to purchase. For those who are new to investing or who are unfamiliar with IRS rules, this can be a daunting task.

Equity Trust

Most Industry Awards

Equity Trust was formed in 2003, but its business origins can be traced back to 1974 when founder Richard Desich established another brokerage company that would later grow into Equity Trust. Throughout the years, Equity Trust has acquired accounts and whole trust companies, steadily expanding its influence in the financial world. This brand has innovated and found new ways to meet customer needs by providing online investment platforms and by creating new divisions of its business to address the needs of the financial services industry.

Equity Trust has received many awards within its industry, especially awards for how it treats its employees. In 2019 this brand was named one of the top 99 workplaces in Ohio by the Employer’s Resource Council. In 2018, the publication Smart Business recognized Equity Trust with a Customer Service Excellence Award. Other awards the brand has recently won have included special recognition of Equity Trust as a healthy workplace.

Overview of Equity Trust

Participates in the Sale or Brokerage of Precious Metals


No


Storage and Security Partners


Provided by Equity Trust itself


Fees


Setup: $50
Annual: $205+ (based on asset value)
Transaction/service: 16 possible fees, ranging $10-$100


Memberships and Ratings


-RITA Membership
-BBB Rating: A+


IRA Account Minimum 


None


Pros and Cons of Gold IRAs from Equity Trust

Pros

  • Flexibility: Equity Trust allows its customers to invest in alternative assets or traditional assets. With the same custodian, you can explore stocks and bonds, real estate, cryptocurrencies, precious metals, and much more. Not all options are right for all investors, and Equity Trust customers need to do their due diligence.
  • Online solutions: Equity Trust runs a proprietary online platform called myEquity for its investors. Launched in 2018, this program allows investors to securely log in, view, and manage their accounts. Having this option can help you stay engaged in your investments.

Cons

  • Confusing website: Equity Trust’s website lists account details in a way that’s often a bit difficult to understand. When looking online for everything you need to know before opening an IRA with this company, you’ll probably have to flip back and forth between several areas of the site.
  • Numerous fees: The fee schedule provided by Equity Trust Includes an unusual amount of miscellaneous transaction and service fees. Most of these fees are low and some, like the fees for paper billing, are very avoidable. Still, with about 16 different fees, keeping track of what’s included and what costs extra can be daunting.

PENSCO Trust

Most Innovative

The San Francisco based PENSCO Trust was founded by Tom Anderson in 1989 specifically to serve those interested in IRAs investing in alternative assets such as real estate. The company soon became an active member of the Retirement Industry Trust Association (RITA), the premier advocacy and education association for the trust industry. In 2016 PENSCO Trust became an independent subsidiary of OPUS Bank but continued its business as usual, serving up to 50,000 customers at any given time. 

Throughout its history, PENSCO Trust has been dedicated to finding innovative ways to meet its customer’s needs. The company was the first alternative asset custodian that let its customers see asset holdings and transactions online almost thirty years ago. It was also the first to offer online IRA applications. The brand continues to keep up with modern innovations, building industry databases, maintaining cybersecurity, and running a website that’s extremely useful. 

Overview of PENSCO Trust

Participates in the Sale or Brokerage of Precious Metals


No


Storage and Security Partners


None


Fees


-Account establishment
-Quarterly administration maintenance
-Several transaction fees
-Closure and transfer out fees


Memberships and Ratings


-RITA Membership
-BBB Accredited
-BBB Rating: A+


IRA Account Minimum 


None


Pros and Cons of Gold IRAs from PENSCO Trust

Pros

  • Reputation: Over the years, PENSCO Trust has built itself a reputation for reliability and innovation. The brand is respected to the extent that it has been positively featured on many news sites such as Forbes, Crowdfund Insider, the New York Times, USA Today, and more. This isn’t a company trying to make a quick profit and disappear before news spreads that the service isn’t reliable.  Instead, PENSCO Trust is proud and unafraid to be in the public eye.
  • Fraud literacy: PENSCO Trust gives its customers the ultimate amount of choice in their investments, but it also strives to help them understand fraud within the investment industry. Customers and anyone interested in the topic can view the company’s list of “fraud red flags,” and they can also read more on the topic on PENSCO Trust’s blog.  These fraud-spotting tips apply to gold IRAs as well as to many other kinds of IRA investments.  

Cons

  • Not focused on precious metals: PENSCO Trust acts as IRA custodians for all kinds of self-directed IRAs. Its online literature focuses more on promissory notes, real estate, crowdfunding, and several other alternative investments, and it only offers a few brief references to precious metals investments. If you want any information about the specifics of a precious metals account, you’re going to have to get virtually all of it through a phone call. This company does not go the extra mile of handling your precious metals storage for you.
  • Unlisted fees: PENSCO Trust is very upfront about its fee structure, in that it lists its categories of fees along with examples in each category. However, the brand states that the actual dollar value of each fee is determined by the type of investment that you make. You’ll have to call and get a quote from the company to determine your exact fees. 

Fidelity Mutual

Best Full-Service Option

Fidelity Mutual, often called simply “Fidelity”, is a large company founded in 1946 by Edward C. Johnson II. It was then referred to as Fidelity Management and Research Company, and has since gone through many changes and expansions. Based in Boston, Massachusetts, this brand has many locations throughout the United States and serves a diverse customer base.  Unlike the other companies on our list, Fidelity’s main focus is not self-directed IRAs. Instead, Fidelity offers many different investment products and banking services, of which IRAs are just a sliver.

For those who want to have all of their IRA needs met in one place, Fidelity is a great choice. Most companies that offer custodial services do not offer any investment advice and do not promote a particular metals dealer. They do this to avoid looking biased and to avoid responsibility, and that’s an understandable business choice to make. However, Fidelity does a great service to its customers by connecting them to quality metals brokers and by handling transactions. This is the ideal option for those who want starting their IRA to be as simple as possible.

Overview of Fidelity Mutual

Participates in the Sale or Brokerage of Precious Metals


Yes, offers brokerage in partnership with FideliTrade 


Storage and Security Partners


FideliTrade


Fees


Setup: None
Annual fee: None
Brokerage: 0.99%-2.90% of metals purchase
Storage: 0.125% of total value or $3.75 quarterly (may be prebilled) 


Memberships and Ratings


-BBB Rating: C-


IRA Account Minimum 


$1,000 


Pros and Cons of Gold IRAs from Fidelity Mutual

Pros

  • No annual fee: Because Fidelity profits from fees that it charges on the sale of precious metals, it does not charge account setup or annual fees. This may save money for some investors in the long run. Whether the brokerage fee structure saves you money will depend on a variety of factors, including the amount of money that you invest. 
  • Purchase and storage: Fidelity handles shipping and the secure storage of the metals that it sells to you. The fees that it charges quarterly are either 0.125% of the total asset value or a flat fee of $3.75 (whichever is greater). This means that for some investors, the yearly cost of storage could be as low as $15, an extremely reasonable fee. 
  • Numerous locations:  Fidelity Mutual has nearly 200 branch locations across the United States. For those seeking a full-service company that offers sales, storage, and custodianship, this company will be easy to interact with since chances are good that a location will be near you. You may be able to speak in person with an expert from Fidelity before making any purchases.

Cons 

  • Complex fees: Fidelity is a huge company, and to serve the most customers possible it has developed a rather complex fee schedule document. This single document seems to cover every possible investing fee for the different kinds of accounts the company offers. Understanding the fine print can be an onerous task. 
  • Lackluster BBB rating: The Better Business Bureau, an independent organization that rates companies based on how they interact with customers, rates Fidelity as a C- company. This average rating stands in contrast to the A+ rating that other companies on our list received from the BBB. As a company with nearly 200 branch locations, it’s not especially surprising that Fidelity rated so much lower- large companies and chains tend to perform a little worse on customer service in the BBB ratings. However, this rating may give some consumers pause.

STRATA Trust

Best for Diverse Investments

STRATA Trust is a company based in Waco, Texas and owned by the parent company Horizon Bank, SSB. Originally the company was called Self-Directed IRA Services, and its focus has always been on alternative investments. Now STRATA Trust acts as custodian for over $2 billion dollars in assets, representing 7,000 individual assets. STRATA Trust supports its customers through the work of over 50 employees, serving both financial professionals and individuals.

STRATA Trust offers a unique “Flex IRA” that makes it an especially good choice for investors who want to explore multiple alternative investment opportunities. The company also offers a traditional IRA if the investor wants a separate account for more traditional investments like CDs and other public investments. For those who don’t want to be limited, the account structures offered by STRATA Trust offer the  freedom to invest in diverse ways.

Overview of STRATA Trust

Participates in the Sale or Brokerage of Precious Metals


No


Storage and Security Partners


Delaware Depository or Brinks


Fees


Setup: $50
Annual: $75-$250
Storage: $100-$140 annually
Shipping: $30+ (varies greatly)
Transactions/services: 13 fees, $30-$250 each


Memberships and Accolades


BBB Accredited
BBB Rating: A+
RITA Membership


IRA Account Minimum 


None


Pros and Cons of Gold IRAs from STRATA Trust 

Pros

  • Low fees: The account opening fee for the precious metals IRA from STRATA Trust is a low $50, and the annual fee is just $75. This annual fee is less than half of the amount that many competitors charge. If you’re looking for low administrative costs, this brand is a great option. However, be aware that the Flex account has a higher annual cost of $250. 
  • Detailed asset information: Trust companies are not obligated to educate their customers on the quality of investments. That being said, STRATA Trust goes the extra mile by providing an extremely detailed guide to “IRA Allowable Precious Metals”  for anyone who is struggling to understand the rules about collectibles vs. allowed metals. This helpful guide in the “Precious Metals” section of the website demonstrates this brand’s awareness of the nuances of this form of investment. 

 Cons 

  • High storage fee: Unfortunately, STRATA Trust’s annual storage fee is $100-$140, rather high compared to some companies. The fee is lowest if you allow your precious metals to be stored with other investors’ precious metals, and it’s higher if you want separate storage. For most investors, separate storage is not necessary.
  • No metals recommendations: Like many other trust companies, STRATA Trust does not recommend any specific metal dealers to its customers. This means that anyone who wants to establish an IRA with STRATA Trust needs to do the hard work of vetting their own investments very carefully for themselves. The plus side to this, of course, is that STRATA Trust employees are not motivated by commissions from other companies. 

Buyer’s Guide to Investing in a Gold IRA

Buyer’s Guide to Investing in a Gold IRA

Step 1: Speak with a Financial Advisor or Lawyer

If gold IRAs are appealing to you, the first step to setting one up is not to act and “buy now.” Instead, the first step is to take a breath, take it slow, and get reliable advice. In addition to bringing your loved ones into the loop on what you’re thinking, you should seek professional financial advice that isn’t connected to a metal sales company or an IRA management company. If you don’t already have someone that you consult regarding your retirement plan, a lawyer or financial advisor is probably your best source for help on this topic. 

When you consult with a professional about adding a precious metals IRA to your retirement portfolio, make sure you bring up the following questions during your conversation:

  • Is this a good diversification option for me? 
  • Can you share how you’ve seen Gold IRAs work out for other people over the years?
  • If I diversify with a precious metals IRA, what percentage of my retirement should I convert to this investment?
  • Are there specific types of deals and transactions that you consider investment red flags in gold IRAs?

Something your advisor may bring up is that a gold IRA won’t earn you dividends, nor will it earn you interest. While it’s true that the gold may appreciate in value to the point that you make money when you eventually sell it, this is by no means certain. You could actually lose money if gold’s market value has deflated at the time that you are required to take distributions from your IRA (usually after age 70 ½) .

Step 2: Review Current News for Fraud Alerts

Unfortunately, scams in the gold investment market are quite common. If you’re going to invest in gold or another precious metal, you need to approach every company with healthy skepticism. It’s a good idea to check the Federal Trade Commission’s website since it posts articles about gold investment scams occasionally. For example, check out the FTC’s blog post on precious metals telemarketing scams and precious metals scams that involve hidden fees and loans.

In addition to looking at what government agencies say about current gold investment scams, you may also want to search major news outlets to find out about companies or practices that are under suspicion but that have not necessarily been formally prosecuted or proven to be illegal. Search the words “gold IRA” or “gold investment” followed by the words “scam,” “scheme,” “fraud,” “lawsuit,” or any related word you can think of. Once you search this, make sure you click on the “news” tab on your search engine so that you can see recent articles. 

When you’re searching for news on scams, keep in mind that you should be focusing on things like the sales tactics being used, not necessarily on the company names. Scammers often change company names frequently, hopping from location to location and targeting different groups of investors. The names and people involved may change, but you should train yourself to recognize scams no matter what they are called.

Common red flags:

  • Promises of guaranteed profit
  • Scare-tactic statements about the state of the economy and world
  • Company history, location, and other key details that cannot be found
  • Pressure sell tactics- “act now,” “don’t wait,” “this deal won’t last,” “it’s never been better,” “you’ll regret it if you don’t…”
  • Someone urging you to convert your entire retirement to a Gold IRA
  • Unsolicited sales offers over the phone or online
  • Unclear fees that the company says contradictory things about
  • Companies that recommend investing using a personal loan
  • Companies that claim that they don’t have to report your transactions to the IRS

Step 3: Find a Custodial Company and Establish the IRA

Once you’ve received advice from a financial advisor and familiarized yourself with the pitfalls of scams, it’s time to decide on a reputable custodial company that you can trust to administer your IRA for you. Having a custodian is not optional; all gold investments must be held by a bank, trust company, or some other IRS-approved custodian. Some people claim that if they form an LLC they can hold their investments anywhere they please via the LLC, but the IRS is clear that this supposed loophole is invalid.

When you look for a trustworthy custodian, keep the following tips in mind:

Look into History and Associations

Always read up on the history of a company. Read the “about” or “our story” page of the company’s website to discover the number of years in business, any brands the company has acquired or been acquired by, the names of the company’s founders and investors, and professional associations or awards that the company has within the financial industry. Companies that are members of the Retirement Industry Trust Association (RITA) or that have high ratings from the BBB may be especially good choices. 

Consider the Scope of Service

As you compare companies, it’s important to decide exactly how much help you want from them. All companies must, at a minimum, keep records for you, release IRA funds for investment purchases according to your instructions, report to the IRS as the law requires, and handle mandatory distributions (though you may need to calculate the amount yourself).

In addition to these services, some companies go the extra mile by recommending metals brokers and/or by arranging for the shipment and storage of precious metals on your behalf. For the metals to be part of your IRA, you cannot at any point take possession of them- they must be handled by other qualified companies and placed in storage at an IRS-approved location. 

Explore Fees

If a company doesn’t list its fees online, you’ll want to either call and write down all fees or, better yet, request that the full fee schedule be emailed to you. Don’t settle with just viewing one or two companies’ fee structures. Try to compare four or more companies so that you really get an idea of your options. 

Below you’ll find explanations of the most common fee structures that custodians use:

  • Custodial fees: The custodian isn’t affiliated with the metal dealer and doesn’t directly profit off of the sale of metal to your IRA. Instead, the company makes all of its profit through a startup fee, flat annual or quarterly fees, and various transaction fees that occur when the company processes a check, make a wire transfer, or perform a variety of other services on your behalf. In more rare cases, some of the fees may be charged as a percentage of the value of the IRA, perhaps 0.1% or less. 
  • Commissions: The custodian makes a commission or charges a brokerage fee to you when you buy metals from a company that the custodian has a contract with. The custodian receives a percentage of the cost of the metals that you purchase. In these cases, the company may be able to offer you very low annual or transaction fees because the custodian has already turned a large profit off of the deal. 

Annual administration fees can vary dramatically- from around $50 at some companies to over $200 or $300 at other companies. Sometimes annual fees are high because they factor in the cost of storage, shipping, and security, so consider what’s included. It’s common for companies to have roughly ten separate “transaction” or “service” fees that occur when you make transfers, write checks, require a rush on a transaction, close the accounts, or take other specified actions. Generally, account closure fees will be as high as $100 or $200 and all other transaction fees will be significantly lower, even as low as $10-$30. 

Step 4: Establish and Fund the IRA  

Most applications to open an IRA can be done online and are fairly quick. To open an account, you’ll probably need the following:

  • Driver’s license 
  • Social Security number
  • Information about beneficiaries (you must list who will inherit the IRA if you pass away)

Once you open an IRA account with a company, you have to fund it before making precious metals purchases through it. There are several ways to fund an account, which we list below.

  • Bank transfer
  • Check
  • Cash
  • Rollover funds from another retirement account

If you want to use funds from another retirement account, you will probably need to indicate that at the start of the application process since rollover accounts may be considered a separate IRA category by the institution.

When you set up your account, the custodian may let you know what your yearly contribution limit is, or you may have to calculate it for yourself using information on the IRS website. Your age will affect this limit, and the limit may change each year since it is routinely adjusted for inflation and other factors.  

Step 5: Invest in Precious Metals Via the IRA

Once you’ve set up your account and funded it, you need to direct your custodian to spend those funds on gold or other precious metals. To do this, you need to research precious metals dealers, get a price from them, and then fill out a form for the custodian with all relevant purchase details so that the custodian can release IRA funds to the dealer for you per legal requirements. Of course, if you selected a custodian that works with a designated dealer, then your purchase may be easier since the terms of the sale will likely be predetermined.

Buying gold is often where consumers run into fraudulent practices. Some companies sell metals that aren’t as pure as they are labeled, that are disqualified for use in an IRA due to their collectible status or purity, that come with surprise fees or huge markups over their actual value, or that never existed in the first place. To avoid being defrauded in the metals purchasing process, it’s safest to select a dealer from the US Mint authorized dealers list. When you read the list, you can also explore the Bullion Coins section of the US mint website to learn all about coins available for investment. You may also wish to view the IRS publication of IRA rules which includes a section on which coins are exempt from the designation of collectible.  

Frequently Asked Questions

Frequently Asked Questions

Is a gold IRA the only way to invest in gold?

Purchasing physical gold through a gold IRA is only one of the ways that you can invest in gold. According to the Federal Trade Commission (FTC), another common way to invest in gold is through gold mining stocks and mutual funds. Yet another common way to invest is through gold exchange traded funds (EFTs). All of these methods of investment are generally seen as a method of balancing a diverse portfolio. None except gold IRAs are intended to give the investor ownership of actual gold. When you consider the variety of gold-based investment options on the market, it’s always best to consult with a knowledgeable financial advisor. 

Is gold guaranteed to increase in value?

No investment, including gold, is guaranteed to appreciate in value. Anyone who claims to be 100% sure that gold will appreciate is engaging in predatory sales tactics. However, one of the most commonly held beliefs about the value of investing in gold is that gold tends to gain value when the stock market loses value. Many people find the thought of “hedging their bets” with gold comforting, believing that having gold in their portfolio will provide them security. While this often seems to be the case, it could change in the future. No investment is certain.

When deciding whether gold’s value is likely to rise enough to be profitable, as opposed to merely a form of security, consider how much its value will need to rise to cover the cost of account setup and maintenance fees. Also, when investing in gold, don’t forget that, unlike stocks or even cash, you won’t earn interest or dividends on a physical asset like gold. The only possible way to profit is if you sell it at a higher cost than you bought it for- and don’t forget to factor IRA account maintenance fees into your investment costs. 

What are prohibited transactions for a gold IRA?

An IRA is an account that’s intended to be a resource for you once you have retired. If you attempt to use the account to purchase something for your immediate personal use or for the use of certain close relatives called “prohibited parties,” you can compromise the status of your account as a legitimate tax-advantaged IRA. Such a compromise is called a “prohibited transaction,” and it can lead to large tax penalties. To learn more about exactly which actions are prohibited, you can read the IRS guide to prohibited transactions. The bank or trust company that acts as custodian for your account is obligated to report a prohibited transaction if they see one happen, but they will not necessarily stop you from making a prohibited transaction.

Can I add gold I already have to my gold IRA?

Many people want to add gold heirlooms- whether coins, jewelry, or other pieces-  to their gold IRA. This is not allowed for multiple reasons. First, no collectibles items are allowed in an IRA. Only certain “one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department … [and] certain platinum coins and certain gold, silver, palladium, and platinum bullion” can be eligible for investment in an IRA. Most commonly owned precious metals simply don’t qualify according to these narrow guidelines.

The other reason that you cannot fund your IRA with gold or other precious metals you already own is that the IRS requires that the IRA remain very separated from the finances and life of its owner until the owner reaches retirement age. The owner is supposed to fund the IRA with a transfer and then direct the IRA custodians to make investments on his or her behalf. Directly funding the IRA with an item already owned is considered a prohibited transaction, no matter how logical it may seem to do so.

How do mandated distributions work with a physical asset like gold?

For all IRAs except Roth IRAs, you’re required to take a portion of the IRA out each year once you reach age 70 and ½. At that point, you’ll have to pay taxes on that amount. With a gold IRA, you can take these mandatory payments in the form of the gold itself or in the form of cash after the trustee sells a portion of the gold for you. Selling gold can result in a gain or loss, depending on the current market, or it might result in you breaking even. Rules regarding taxes and mandatory distributions can be quite complex, so it’s a good idea to review relevant publications from the IRS along with your CPA or another tax expert to make sure you’re working within the law. 

What is an IRA recharacterization fee?

Almost all trusts and other custodial institutions list a recharacterization fee in their fee schedule. If you make a contribution to your gold IRA account but later realize it’s better that you put that money in a different IRA account, you can approach the custodian (also called the trustee) of the account and ask them to transfer what you invested to another account. This is referred to as recharacterization. To learn more about recharacterizations, you can view what the IRS writes about recharacterization online. You can also discuss this topic further with the trust company. 

Is my precious metals investment FDIC Insured?

When you have cash in an IRA account prior to purchasing precious metals with that account, the funds might be Federal Deposit Insurance Corporation (FDIC) insured, depending on the custodian. However, as soon as your money is exchanged for precious metals, that investment is no longer FDIC insured. Other kinds of assets, including stocks, real estate, or other physical assets, are also not FDIC insured. The FDIC exists to protect consumers from bank failures, but it can only extend it’s protection to cash deposits, not investments.