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Gold IRA Custodians: The Complete Guide to Self Directed Gold IRA Custodians

gold-IRA-custodians-guide

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Written by retirement account experts Pat Collins and John Halloran.

Table of Contents

With the recent increase in demand for precious metals, many people are searching for the best gold IRA custodians. Below is a comprehensive list of everything you need to know before choosing your gold IRA custodian. Let’s dive in.

1. What is a Gold IRA Custodian? 

A gold IRA custodian offers Self-Directed IRAs that permit its clients to hold alternative assets, including physical precious metals in the custody of an IRS-approved nonbank trustee. In addition to physical gold, Self-Directed IRA custodians also permit silver, platinum and palladium coins and or bars that meet minimum purity requirements.

2. History of Gold IRA Custodians

Individual Retirement Arrangements were introduced in 1974, with the Employee Retirement Income Security Act (ERISA). IRA’s were designed to serve two primary functions: 

  1. To create a tax-deferred retirement account for individuals not covered by their companies’ retirement plans. 
  1. Offer a vehicle for individuals to preserve the deferred tax status of qualified plans upon the termination of employment. 

Initially, IRA’s were solely offered through big banks and financial institutions, and were instantly popular. In the first year alone (1975), IRA contributions topped $1.4 billion. By 1981, contributions had ballooned to $4.8 billion.  

And Wall Street was more than content with the massive influx of new capital. They now had a consistent, predictable, flow of new money to allocate to stocks, bonds and mutual funds. 

But what most investors didn’t know was that their investment options were being severely limited by the same banks that held their IRA’s. Few investors at the time were aware that per the IRS the only two investments one can’t hold in an IRA are life insurance and collectibles. 

Early in the 1990s, savvy investors began to realize their IRAs were much more nimble than previously thought. Trust companies began to emerge, specifically set up to allow alternative investments in IRAs. Investors were no longer tied to the big banks and their limited investment options. With the advent of the new trust companies, the Self-Directed IRA was born. 

A Self-Directed IRA is just that, self directed. You and you alone are responsible for choosing your investments. 

But it wasn’t until 1997 with the passing of the Tax Payer Relief Act that select precious metals were approved for inclusion into retirement accounts. And at that moment, gold IRA custodians were born. 

And the timing couldn’t have been better, as gold increased from $300 to $1900 from 2000 to 2010, creating a windfall for IRA investors holding precious metals.

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3. How Do Gold IRA Custodians Work?

Most gold IRA custodians are non-bank trust companies for the reasons mentioned above. A gold IRA custodian must therefore maintain what’s called an omnibus account with a traditional bank, allowing it to execute financial transactions. This relationship also provides that each gold IRA custodian client receives FDIC insurance protection of up to $250,000 of cash held in their IRA. Below are the typical roles and responsibilities of a gold IRA custodian:

  • Assist in establishing and funding your gold IRA
  • Execute your buy, sell, distribution, transfer and rollover instructions as directed
  • Ensuring assets are correctly titled and inventoried
  • Issue quarterly statements
  • Inform you of Required Minimum Distribution obligations
  • Fulfill IRS reporting requirements

4. What Gold IRA Custodians Do Not Do.

Gold IRA custodians do not offer investment, nor tax advice. Gold IRA custodians do not provide insurance against financial loss for your investments (other than FDIC insurance of cash up to $250,000). A gold IRA custodian will not investigate or validate the legitimacy of your investment choices. And they are not responsible for an investment’s performance.

5. How are Gold IRA Custodians Governed?

In order to become a gold IRA custodian one must apply to the IRS usingRevenue Procedure 2021-4. Next, they must prove they can meet the requirements of Treasury Regulation Sections 1.408-2(e)(2) through 1.408-2(e)(8). A prospective custodian must submit a written application to the IRS demonstrating its abilities to comply with the following items:

  • Provide the state and date of incorporation to prove how long in business
  • Prove continuity assuring the uninterrupted performance of fiduciaries
  • Provide established physical location of business
  • Demonstrate fiduciary experience or expertise with retirement plans
  • Must show a high degree of solvency, financial responsibility
  • Demonstrate proficiency in accounting for a large number of individuals
  • Must prove competence associated with handling of retirement funds
  • Must provide document for rules of conduct used in administering retirement plans
  • All employees performing fiduciary duties must be bonded for at least $250,000
  • Applicants net worth at least $250,000 based on recent audited financial statements

6. What Types of Accounts do Gold IRA Custodians Offer?

Gold IRA custodians typically offer Self-Directed Traditional, Roth, SEP and Simple IRA plans. 

Traditional IRAs are by far the most common and can be used by anyone who earns income. Account owners are able to contribute up to $6,000 pre-tax dollars annually, or if over 50 years of age, $7,000. Earnings can grow tax-deferred until the owner reaches 72 at which point they’ll be obligated to take Required Minimum Distributions (RMDs).

Roth IRAs are very advantageous for eligible individuals because they allow post-tax contributions of up to $6,000 annually, or $7,000 if over 50 years of age. Eligibility to contribute to a Roth depends on one having earned income and that their gross adjusted income doesn’t exceed limits set by the IRS. Tax free distributions can be taken at any time after 59.5. Taking a distribution prior to 59.5 years of age will result in a 10% early withdrawal penalty. You are not obligated to take RMDs with a Roth IRA.

SEP IRAs are Simplified Employee Pension plans that allow self employed individuals, partners, or owners of companies, to provide a simple, low-cost retirement plan for employees. Employers can make tax deductible contributions of up to 25% of an employee’s pay or up to $58,000 in 2021. Just like with a Traditional IRA, SEP IRA holders must begin to take RMDs at 72 years of age.

SIMPLE IRAs are for small businesses with less than 100 employees and self employed individuals. Employees under 50 years of age can contribute $13,500 per year, or if over 50, $16,500. Employers can match up to 3% of the employees pay. Again, account owners must take RMDs upon reaching 72 years of age.

7. What Fees Do Gold IRA Custodians Charge?

Gold IRA custodians will have one of two fee structures:

  • An annual fixed rate regardless of the account value. 
  • A sliding scale fee based on the value of your account. 

Gold IRA custodians with fixed fee schedules are the most cost effective. So unless you have a very good reason to choose a firm with a sliding scale, you should avoid such custodians. 

In the table below, you’ll find a comprehensive list of the Self Directed gold IRA custodians, and their fees for precious metals accounts. We’ve also included direct links to their fee schedules.

Custodian Flat Fee
Storage
Annual Storage
Costs
Set-Up Fee Annual Fee Minimum
Balance
Fee Schedule
AccuPlan Yes $144 $50 $195 $325 Fee Schedule
Advanta IRA No .001 x Value Per Year $125 Minimum $50 $100 No Fee Schedule
CNB Custody No $1 per $1,000 $100 Minimum $25 No No Fee Schedule
Entrust Group No .80 – $3.50 per $1,000 $95 Minimum $50 $150 No Fee Schedule
Equity Trust Yes $100 $50 $80 No Fee Schedule
Forge Trust No $1 per $1,000 $100 Minimum $50 $150 $500 Fee Schedule
GoldStar Trust No $1 per $1,000 $100 Minimum $50 $75 – $275 $150 Fee Schedule
Horizon Trust Yes $100 $50 $195 No Fee Schedule
iPlan Group No $1 per $1,000 $50 $225 – $1,000 No Fee Schedule
IRA FinancialTrust Company No .80 per $1,000 $95 Minimum $0 $300 $500 Fee Schedule
IRA Innovations No .80 per $1,000 $95 Minimum $60 $295 $500 Fee Schedule
Madison Trust  No $1 per $1,000 $100 Minimum $50 $360 $500 Fee Schedule
Midland Trust No .80 per $1,000 $95 Minimum $50 $125 $250 Fee Schedule
Millenium Trust Company No .70 – .80 per $1,000 $60 Minimum $50 $100 No Fee Schedule
Mountain West IRA No $1 per $1,000 $125 Minimum $50 $130 – $300 $500 Fee Schedule
New DirectionTrust Company No .80 per $1,000. $95 Minimum $75 $130 – $180 No Fee Schedule
Next GenerationTrust Company No .80 per $1,000 $95 Minimum $50 $100 No Fee Schedule
Preferred TrustCompany No Varies* $50 $100 No Fee Schedule
Provident Trust No Varies* $50 $395 No Fee Schedule
Strata Trust Yes $100 – $150 $50 $95 No Fee Schedule
uDirect IRA Services No $8 – $18 per month $50 $275 $325 Fee Schedule
Vantage IRA No $1 per $1,000 $125 Minimum $50 $275 No Fee Schedule

 

8. Where Do Gold IRA Custodians Store My Precious Metals?

Per the Internal Revenue Code Section 408, the precious metals owned by your IRA must be held by a bank or an IRS approved non-bank trustee. Gold IRA custodians can elect to use any number of 3rd party approved depositories. But most will have a handful that they prefer to work with. Below is a list of the most common depositories gold IRA custodians use for your precious metals safekeeping.

Delaware Depository

(302) 765-3889

ddsops@delawaredepository.com

Brinks Global Services

(877) 527-4657

us.salesinfo@brinksinc.com

International Depository Services

 (888) 322-6150

info@IDS-Delaware.com

First State Depository

(302) 765-2760

http://www.fsdepository.com

CNT Depository

(508) 807-4815

Loomis

(877) 877-0560

Idaho Armored Vaults

(208) 468-3600

info@goldsilvervault.com

9. Beware Of “Best Gold IRA Custodian” Review Sites

If you’re new to the world of Self Directed gold IRA custodians, you may find yourself researching the “best” companies out there. Because after all, wouldn’t you like to work with the best, most reputable firm? Of course you would. But this is where you can get into hot water, if you don’t know what to watch out for.

Savvy affiliate marketers have discovered that they can create fake “review” websites where they “independently” evaluate gold IRA companies and then sell your information to the highest bidder. 

What is a gold company affiliate marketer? A website that creates fraudulent “reviews” of gold dealers and receives a flat fee or percentage of the gross IRA account value for referring a customer to them. 

These gold IRA companies are almost always in Southern California, have tons of complaints, and charge the highest buy/sell spreads in the industry. 

To find out if a gold IRA company gives a chunk of your retirement account to affiliates, call 800-300-0715 today and ask for our complete list of “FAKE REVIEW DEALERS”.

 

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