Opening a Gold-Backed IRA Fidelity Account- What Is It and Is It Worth It?

James McCollum

Planning for retirement is a key part of long-term financial management. Gold IRAs are becoming more popular amongst savvy investors looking for diversification in their portfolios.

Managing a retirement plan can be a daunting task- especially when considering buying into the precious metals industry- but having the right brokerage to support in the journey makes all the difference.

Fidelity is one company many people turn to for the assistance they need in managing their investment portfolio. It has a unique approach to gold IRAs and precious metal investing that keeps costs down and convenience high.

Below, we explore the ins and outs of what exactly Fidelity does for the gold investing industry and what types of precious metals investments it provides. We also take a general look at the company, its services, and its reputation.

An Introduction to Fidelity

Gold-Backed IRA Fidelity

Fidelity is a globally-recognized name in the investment industry. The brokerage has been active for over eight decades and remains a leader in 2022.

It operates in nine countries, has millions of clients, and is one of the biggest and most reputable financial institutions in the USA.

The services offered by Fidelity include:

  • General Brokerage Services

First and foremost, Fidelity is a general broker platform designed for online and offline trading. Investors can buy and sell all kinds of assets through the platform with the assistance of highly-trained professionals.

  • Tailored Investment Solutions

The brokerage has an incredible range of investment possibilities for all members and every budget- but account holders with more than $200,000 invested with Fidelity receive additional custom assistance finding the best opportunities for them.

Individual investment strategies are drawn-up, discussed, and actioned with the support of an advisor.

  • Retirement Account Management and Planning

Whatever plans a person has for their retirement, Fidelity can help manage and organize savings to help make it happen. The advisors cover all aspects of retirement planning- from opening specialist IRAs (gold, for example), to finding risk-appropriate investments for existing savings.

  • Wealth Management Assistance

Fidelity offers one-on-one personal wealth management for individuals with an investment of at least $200,000 when their net worth is over $1 million- excluding their home. The dedicated service helps create and manage a customized financial plan for the best outcomes.

Understanding Gold IRAs

Before we look specifically at how to invest in gold with Fidelity, let’s take a look at what gold IRAs are all about.

What Is a Gold IRA?

A gold IRA is a type of individual retirement account that allows the owner to purchase gold and precious metals using their 401(k) and other savings. The idea is to provide an alternative source of income and savings (gold and silver) that hedges against currency inflation.

There are many types of gold IRAs- and plenty of providers to choose from- but most follow a similar ideal: having the freedom and flexibility to invest all or part of the saved funds in physical metals and other gold products.

Why Open a Gold IRA?

The benefits of having a gold IRA include:

  • Options to diversify through gold and silver investments

  • Tax benefits (lower tax code on withdrawals)

  • Tangible assets to protect long-term savings

  • Stability compared to some other investments

  • Long-term wealth management

They tend to be favored by those planning their retirement funds. The choice to invest in gold is usually part of a long-term plan- as the short-term gain in most cases is not very high.

Tax benefits are a core reason for many to opt for a gold IRA rollover especially those with significant savings. Financial advisors at Fidelity and other gold investment companies explain how to maximize this beneficial element.

It is, however, important to note that failure to properly comply with the rules of opening a gold IRA results in high fines. The Internal Revenue Service is quick to penalize anyone who does not follow the rules and complete the transactions within the time frame allocated.

Can Anyone Arrange a Gold IRA Rollover?

Anyone who wants to roll over part of their saving into a gold IRA can do so with the assistance of a custodian and company approved by the Securities and Exchange Commission. Many gold IRA providers also offer custody services for anyone planning to buy actual gold bullion, bars, or coins.

How to Purchase Precious Metals

Many gold IRA companies handle precious metals sales. Investors can often buy straight from the website- or call the customer services team to discuss options.

They can buy gold coins, bullion, precious metal bars, and other assets. Some popular options include the Gold American Eagle coin, silver, platinum, and palladium bullion, and solid gold bars.

Fidelity and Gold IRAs

Fidelity and Gold IRAs

Fidelity works a bit differently when it comes to gold and precious metals. It is not a place to purchase gold- nor does it store or hold physical gold of any kind.

Those who choose to invest in gold through Fidelity should be aware of the crucial differences.

What Types of Precious Metals Savings Accounts does Fidelity Offer?

There isn’t much you can’t do through Fidelity- it is one of the most varied investment brokers in the market- but there are some specifics when it comes to precious metals.

You can open a retirement account that supports gold investments, but you can’t buy any physical assets. A Fidelity Gold IRA is paper-based- meaning all investments are through contracts and stocks- not actual gold and silver.

Fidelity’s Select Gold Portfolio is one way to save through gold stocks and other investment options. A standard gold IRA is also an option for those who want to rollover their 401(k)

The minimum initial investment requirements for IRAs with Fidelity start as low as $50- making them accessible and affordable for many investors. Some accounts have significantly higher minimums, so it is best to speak with an advisor from the company for specifics.

What Gold Products can Fidelity Account Holders Invest In?

Part of the appeal of a Fidelity Gold-Backed IRA is the versatility and choice of investments. The company has several ways to break into the market and diversify a retirement account through precious metals.

‘Paper’ Gold and Other Precious Metals

Fidelity’s Direct Investing Program lets account holders invest in gold and other precious metals- but not physical assets. Instead, they buy paper gold- which is essentially a claim on gold bullion, bars, or coins through a contract with a trustee.

Mutual Funds

There are multiple mutual funds available to Fidelity investors that allow them to trade in precious metal coins and bars. Precious metals mutual funds are smart ways to gain exposure to the market and build a gold portfolio without having to buy and store any assets.

The Fidelity Select Gold Portfolio is more than 50% gold assets, and the Fidelity Advisor Gold Fund has more than a third of its assets allocated to gold.

ETFs (Exchange-Traded Funds)

Exchange-traded funds offer more liquidity and are more tax efficient than mutual funds for gold investors. Fidelity’s ETFs offer access to the precious metals market by investing in gold mining stocks.

This is a cost-effective method of trading precious metals- with low-cost trades through commission-free ETFs provided by Fidelity.

Individual Gold Stocks

Account holders can also invest in individual stocks in silver and gold mining companies such as Goldcorp Inc. and the Newmont Mining Corporation. Again, it is an alternative way into the precious metal market without purchasing gold.

How Much Does Fidelity Charge for Gold-Backed IRA Services?

There are no account charges on Fidelity gold IRAs. Additionally, all gold-related services from Fidelity are commission-free- you just pay the same price as you would for the asset itself.

Another beneficial element of investing in precious metals with Fidelity is that the company does not charge anything for liquidating your assets. If the account holder decides to sell all their gold stocks, they can do so free from penalization or commission charges from Fidelity.

—> Read our Gold IRA Guide.

Fidelity VS Other Precious Metal Companies

In general, Fidelity holds up well against almost any competitors when it comes to the variety of services, history of satisfied customers, and alternative ways to enter the gold and precious metals industry.

In fact, for anyone who explicitly does not want to own physical gold products but wants to invest in the market, they are a solid option.  Although, our #1 recommended gold IRA company is Goldco.  Check out our Goldco review to learn why.

That said, Fidelity is not the best option generally for gold IRA services- mainly because the lack of physical gold removes several savings options. Part of the appeal of a precious metals IRA is the security of knowing there are tangible assets sitting in storage that won’t change- this is something Fidelity cannot offer.

Paper assets may be preferable for their low commissions and having no need for storage fees, but physical gold is preferable for long-term security.

What is best for each investor comes down to their personal investment goals and risk preferences in their retirement planning.

Frequently Asked Questions

Here are a few more frequently asked questions about Fidelity and gold investments.

Can I buy physical precious metals through Fidelity?

Fidelity does not buy or sell physical precious metals of any kind. All gold investments are in paper form and other types of precious metals trading.

Fidelity does, however, offer several gold investment products that you don’t find in many places. It is an excellent choice for someone who does not feel comfortable (or just doesn’t want to be) holding physical precious metals.

Are there any self-directed gold IRA options?

No- Fidelity does not offer any self-directed gold IRAs. There are plenty of alternative retirement account options to choose from, but for this service specifically, it is best to look elsewhere.

How do Fidelity’s premiums compare to other precious metals companies?

Premiums are lower with Fidelity than other precious metals providers because you are not buying physical gold. Most companies charge high premiums on precious metals transactions above the spot price to cover additional fees.

With Fidelity- that doesn’t happen. The company charges the same premiums on gold and precious metals as they do other investment products because they only offer paper gold and other non-physical holdings.

Is Fidelity a trustworthy precious metals IRA provider?

Fidelity has a long-standing reputation in the precious metals IRA industry going back almost 80 years. It launched in 1946 and has helped tens of millions of people manage their investment options and retirement funds.

The company is respected as an industry leader in alternative investments and has an A+ rating from the Better Business Bureau.

Of all the financial institutes that offer access to the gold market, Fidelity is the largest in terms of global reach and reputation.

What is the difference between paper gold and physical gold?

When a person buys physical precious metals such as gold, they must have an account connected to a storage facility where the bars, coins, or bullion can be sent. It means there is a physical holding of products by the investor.

Paper gold, on the other hand, is when you invest in gold without receiving any tangible assets. Instead, the investor has a document stating they have a claim to a set amount of gold or other precious metals. It is usually a certificate or contract issued by the bank or other trustee confirming and guaranteeing the investor can take the delivery of the gold at any time.

Summary

If you are looking to convert part of your retirement savings into precious metals but don’t want to buy physical gold, Fidelity is an excellent option. It supports various investment types to help diversify a portfolio and protect against inflation without storage costs and high premiums.

Fidelity offers precious metals without the complications that come with holding physical assets- at a reasonable cost and with exceptional customer support.

It is not the best choice for someone looking for self-directed gold IRA options or physical precious metal products.

Gold IRA Quiz