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If you’re interested in investing in a gold-funded individual retirement account, you’ve likely stumbled upon the restrictions, fees, and requirements surrounding custodians. So, what is a gold IRA custodian, why do you need one, and how can you select a reputable option for your investment goals? Read on to learn everything you need to know about finding a trusted gold IRA custodian.
What Is a Gold IRA Custodian?
You fund a typical individual retirement account (IRA) with fiat money stored in a bank that you can easily transfer, deposit, and withdraw using simple transactions. With a gold IRA, your account has physical gold, which means you must store these assets in a secure location.
Gold IRA custodians hold your non-traditional assets in an account for safekeeping while adhering to IRS requirements. You cannot open any IRA without a custodian, including one with traditional assets. You must find a custodian if you wish to fund your account with gold, silver, platinum, or anything else.
What Are the Responsibilities of a Gold IRA Custodian?
Your gold IRA custodian manages things like vaulting, insurance, bullion transportation, transactions, and more. Your custodian must help you complete any action you wish to make on your account while adhering to IRS requirements.
Typically, a reputable gold IRA custodian will walk you through the account setup process first by helping you fund your account. They will control deliveries to the facility, insurance policies, ensuring that all transactions go according to plan, and so forth. When you decide to buy more or sell upon retirement, the custodian may offer to buy back your assets or help you through the transaction.
In general, the custodian’s duties include the following:
- Account setup
- Transaction execution
- Asset titling and inventorying
- Quarterly statements
- Required Minimum Distribution obligation notifications
- Fulfillment with IRS reporting requirements
How To Choose a Gold IRA Custodian
Now that you know the answer to “What is a gold IRA custodian?” Let’s talk about how you can select one for your needs. While all IRA custodians complete similar duties, they may charge different fees and offer varying advantages. We recommend considering the following factors when narrowing your options:
- Investment selection: What types of gold can you purchase from the custodian?
- Fees: What are the fees associated with the custodian?
- Customer service: Do they offer helpful support to walk you through any issues that arise?
- Website usability: Is the website easy to use for convenient account management?
- Restrictions: What are the minimum or maximum investment requirements?
- Reputation: Does the company have a positive reputation for complying with IRS requirements?
Benefits and Risks of Using a Gold IRA Custodian
Gold IRA custodians come with benefits and risks, like all investments. The primary benefits you can enjoy include the following:
- Guaranteed adherence to IRS requirements
- Top-notch bullion vaulting security
- Bullion transportation convenience
- Trading and transaction support
- Buyback programs when you’re ready to sell (with some custodians)
- Included investment insurance
IRA custodians attempt to remove all of the cons of investing in physical gold by making the process easy and secure. Still, you should consider the associated risks.
First, gold IRA custodians can charge high fees that detract from your tax savings. You will also face stricter contribution limits than with other gold investments. While gold is generally a safer investment option regarding counterparty risks, you must still consider its lower liquidity when you are ready to retire.
Speak with your financial advisor if you’re unsure whether or not a gold investment is right for your retirement goals.
Types of Gold IRA Custodians
You have numerous options for gold IRA investments. Each type of custodian offers varying advantages, depending on your goals:
Banks and Financial Institutions
Banks offer FDIC-insured security for numerous investment options, like money market funds and CDs. While financial institutions offer IRAs, they don’t specialize in non-traditional asset IRAs, like gold, so you may face higher fees.
Independent Custodians
Independent custodians typically specialize in managing IRAs, particularly those with alternative assets. You’ll often find competitive prices, excellent features, and top-notch investment knowledge. All independent custodians adhere to the IRS by reporting to government regulators.
Traditional IRA Custodians
A traditional IRA is tax-deferred, meaning you won’t pay taxes on your yearly contributions, so your taxable income will be lower. Instead, you’ll pay taxes upon withdrawal. Conversely, a Roth IRA requires you to pay yearly taxes to enjoy a tax-free withdrawal.
Self-directed IRA Custodians
You can create traditional and Roth self-directed IRAs, with the main difference being how much control you have over the account. Self-directed IRA custodians place you in charge of most of the major investment decisions and funding methods, while traditional IRAs allow the custodian to aid in account management.
Trust Companies
Trust companies can help you create an IRA, though they may not specialize in alternative assets. Depending on the company you find, you may face higher fees.
What Are the Fees Associated With Gold IRA Custodians?
Gold IRA custodians charge numerous fees you should prepare for before opening your account. On average, you can expect the following:
- Flat storage fees
- Annual storage costs starting at around $95 (or more, depending on the value of your account)
- Account setup fees of around $30 to $250
- Annual account fees of around $100 to $400
- Transaction fees of around $40 per
- Wiring fees of around $25 per
Can You Hold Other Types of Precious Metals With a Gold IRA Custodian?
Yes, the IRS allows you to fund your IRA with approved gold, silver, platinum, and palladium bullion. At Oxford Gold Group, we offer a wide range of IRS-approved precious metals products, including popular gold coins and bars, silver mints, valuable platinum bullion, and palladium.
We make opening a precious metals IRA simple, secure, and affordable. Our custodians walk you through the entire process, helping you roll over funds, build your account, and more. Now that you know the answer to “What is a gold IRA custodian?” call Oxford Gold Group at (833) 600-GOLD to learn more about our precious metals IRAs.
