When it comes to gold, silver, precious metals, or any other sort of investment, a person should have a thorough understanding of the costs and/or fees involved. If a person wishes to invest in a precious metals IRA, there are numerous charges that must be studied and addressed. Because of the tax-deferred structure of an IRA account, it must be held by an approved gold IRA custodian.
Starting a gold IRA involves additional fees and costs from a gold IRA company aside from acquiring physical gold and other precious metals. Here are some examples of potential costs:
Custodians of gold IRAs may charge a transaction fee for the purchase or sale of metals within the account. This cost is based on the number of transactions. Fees vary, but $40 per transaction is not unusual.
Gold bars, silver, platinum coins, and other precious metals deposited in an IRA must be stored in an authorized depository, such as the Delaware depository service company. To retain and preserve precious metals, these depositories demand annual fees. Fees may vary depending on which depository is used. Typical costs, however, may range from 0.5% to 1% every year, depending on the worth of the precious metals
Unlike traditional assets like shares, bonds, and mutual funds, gold bullion and silver appreciate when the stock market falls, making them excellent long-term investments.
Precious Metals IRA Setup and Administration Fees
The good news is that there are no government-mandated rollover or transfer fees when switching from a standard IRA to a precious metals IRA. That is not to say that there are no account application fees.
Those authorized custodians and administrators of gold IRAs sometimes charge a processing fee to begin the account opening procedure for these self-directed, precious metals IRAs. Every administrator that charges a fee will charge a different amount, however, the average for this category of cost is around $50.
Commissions and Markups on Coins
Purchasing precious metals in a self-directed IRA account involves multiple commissions. Transaction fees are incurred when you buy or sell coins or bars in your account. These standard costs are applied in each transaction. The more you buy and sell, the more of these costs you will have to pay.
There is no way to avoid commission transaction fees, regardless of which administrator you use. They are simply passing on the charges incurred by the bullion or coin dealer with whom they trade on your behalf. These fees will vary from administrator to administrator, but a decent estimate is $40 per transaction.
Essentially, these costs are not to be confused with the markup over spot that coin dealers will charge. You will pay a premium on top of the current price for the precious metals in addition to the value of the gold, silver, platinum, and palladium contained within the coins or bars you purchase.
This varies depending on the type of product, the quantity of demand for the product in question, and the premium charged by the dealer to your account administrator.
Furthermore, the IRS allows investing in gold coins such as the American Gold Eagle, American Buffalo, Canadian Maple Leaf, and Australian Gold Nugget, but not in South African Krugerrand or British Sovereign gold coins.
Annual Maintenance Fees
Your account administrator cannot afford to work in perpetuity on your precious metals IRA for a single application and setup charge. It will also charge you an annual account maintenance fee, which includes items like processing and distribution of periodic statements, account administration, and record-keeping of your various holdings.
These usual account administration fees range from roughly $75 per year to several hundred dollars per year. When you receive your free information kit or account setup documents, look for the yearly cost disclosure. It should be explicitly stated in the appropriate documents.
Some administrators and Gold IRA companies will offer a reduced first-year annual fee or even an annual charge reduction based on the size of your precious metals IRA account.
Be cautious of companies who charge sliding scale fees, where they take what appears to be a little percentage of the value of your account’s metals holdings. These fees increase in proportion to the size of your account and the value of your gold, and they can quickly become expensive without your knowledge.
Storage Fees Charged
Storage and maintenance costs will be charged by the vaulting depository in order to physically inventory and protect your precious metals hoard. Any gold, silver, platinum, and palladium deposited in such accounts must be kept in these IRS-approved depositories in a third-party, off-site location, independent from your account administrator.
To cover these costs, depositories such as Brinks and Delaware Depository charge annual fees. Your administrator merely forwards them to you. The fees themselves will be determined by the final depository you select. These companies often charge between half a percent and one percent every year, which is totally dependent on the dollar value of the precious metals in question. They may also have different fee schedules.
There are other fees that you cannot generally avoid, such as wire transfer fees. The vast majority of IRA custodians will charge these fees for any funds you want them to transmit to you or to a coin/bullion dealer or depository on your behalf. Such wire transfer costs are usually around $25 for each outbound wire transfer they send on your behalf. These fees should also be disclosed and clearly stated in the account opening papers.
Investors should expect to pay an average of $150 in termination costs if they opt to close gold IRAs without rolling the investment into a separate account like a traditional IRA.
The Best Gold IRA Companies
A reputable gold IRA company may be one of the best solutions for anyone wishing to preserve their retirement assets from inflation and market volatility in a market full of unexpected shocks.
Using the Business Consumer Alliance, we evaluated 18 companies based on their consumer ratings. Below are the best physical gold IRA companies we have found:
Augusta Precious Metal
Augusta assigns each client a dedicated representative who will assist them in purchasing gold and silver. These agents are only an email or phone call away, so prospective gold IRA investors can contact them at any time with questions about their accounts.
Additionally, Augusta charges a one-time $50 IRA setup fee as well as two additional yearly fees: a $100 storage fee and a $100 custodian maintenance fee.
American Hartford Gold
American Hartford Gold does not charge any additional fees for establishing a gold IRA or sending a client’s bullion to a depository. Tracking and insurance are also provided by most gold IRA companies, but clients must still pay annual storage and maintenance fees of roughly $180 if the investment is in a depository.
Birch Gold Group
Birch Gold, like most investing services, charges its clients multiple fees for the upkeep of their precious metals retirement accounts. These expenses include a $50 one-time account establishment fee, a $30 wire transfer fee, a $100 annual storage fee, and an $80 maintenance fee.
Goldco Precious Metal
Investors who engage with Goldco typically pay a $50 startup fee for their traditional IRA, a $30 wiring fee, and an $80 yearly maintenance fee. The cost of segregated and non-segregated storage options, which are available to clients, is $150 and $100, respectively.
Now, that you know all there is to know about gold IRAs and how much gold IRA fees may cost you, it’s time to decide which gold IRA company works for you.