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Gold IRA Custodians: What You Need To Know

By Preserve Gold Research

Investing in a gold IRA may be a smart idea if you want to hedge against inflation or diversify your investment portfolio. However, you may have heard that you cannot manage a gold IRA yourself under IRS guidelines. If you can’t control your IRA, who can?

Gold IRA custodians are IRS-approved entities that manage your account for you. They take care of the technical requirements of opening and overseeing your gold IRA while you maintain control over the types of precious metals inside.

The gold IRA custodian you choose can affect your experience investing in this type of retirement account. You must do your due diligence to find a reputable custodian that meets IRS requirements, provides excellent customer service, and charges fees that stay within your budget.

Read on to learn more about the role of a gold IRA custodian and how to choose the right one for your needs.

What Are Gold IRA Custodians?

Investor Talking To A Gold Custodian

Gold IRA custodians play a significant role in the process of opening and managing gold IRAs. They’re responsible for buying and selling investments, initiating account rollovers, assessing the precious metals for compliance, and ensuring adherence to IRS guidelines. The IRS requires you to work with a custodian throughout the duration of your account.

You have full control over which custodian you choose to manage your IRA so long as they have been approved by the IRS. Knowing how to pick a reliable custodian can instill trust during your account opening and long-term investment process.

What Do Gold IRA Custodians Do?

Gold IRA custodians wear several hats within the precious metals IRA investing process. They manage your IRA, ensure your compliance with IRS regulations for retirement accounts, and handle the administrative duties involved in your account management.

These are a few examples of what a gold IRA custodian can and cannot do:

Duty Does an IRA custodian handle this?
Buy and sell investments on your behalf Yes
Initiate account rollover and transfers Yes
Keep and submit records to the IRS Yes
Assess the eligibility of an IRA for gold Yes
Give notices about required minimum distributions and related matters Yes
Facilitate storage of the precious metals in your IRA Yes
Issue quarterly statements about your IRA Yes
Give investment advice No
Keep an inventory of assets No
Offer tax advice No
Provide insurance coverage for assets No
Take responsibility for the investment’s performance No

Your gold custodian can help you purchase gold, silver, and other precious metals to hold in your IRA. They may work with a gold distributor from whom you can purchase the precious metals. Your custodian can also help you facilitate the storage of your precious metals in a depository; they will not store the metals themself.

Do I Need a Custodian To Purchase Gold?

Under IRS regulations, you must have a custodian to open and maintain a gold IRA. The IRS controls these retirement accounts and has strict standards to verify their legitimacy.

Following the rules for your gold IRA allows you to enjoy the tax benefits that come with these accounts. That’s why the IRS requires you to work with a custodian who understands IRS guidelines inside and out and is responsible for helping you meet them. If you have a preferred gold company that offers a gold IRA, they have likely partnered with a custodian to do so.

If you want to purchase physical gold to invest in outside of an IRA, you don’t need a custodian. You also don’t need a custodian to purchase gold-backed ETFs or stocks.

Exploring the Difference Between a Gold IRA Custodian and Gold IRA Company

Gold Bar On Top Of Dollar Bills

Don’t confuse the terms “gold IRA custodian” and “gold IRA company” when setting up your new account.

Gold IRA companies facilitate the process of setting up a new gold IRA and help you choose the gold to include in it. They often partner with custodians to manage the account.

When you search online for gold IRAs, you’ll likely find more gold IRA companies than custodians. Always verify that a company you work with has a reputable, IRS-approved gold IRA custodian to manage your account.

How To Select a Good Custodian: Best Practices

A gold IRA custodian can be a financial institution, a life insurance company, a trust company, or any other organization that has received IRS approval to fulfill this role. You have countless options when it comes to choosing a custodian for self-directed IRA management. When evaluating your options, review these criteria:

  • IRS compliance and reporting: Compliance with IRS guidelines is of the utmost importance for your IRA. Ensure that a custodian is well-versed in IRS guidelines and committed to ensuring compliance.
  • Transaction transparency and recordkeeping: Verify that a custodian keeps records of all transactions within its IRAs and can make them available upon your request.
  • Custodial fees and charges: Review a custodian’s fees and other costs. Every custodian has a slightly different fee structure, ranging from a little over $100 per year to over $1,000.
  • Reputation and reviews: Read online reviews for a custodian before working with them. Take the time to understand the average customer experience and any common complaints about the company.
  • Customer service: Don’t hesitate to contact the custodian by phone and speak with a representative. Evaluate their communication style and helpfulness.

If you’re interested in working with a non-bank custodian, you can start by reviewing the IRS’s list of approved custodians.

Storage Options for Your Gold IRA Assets

Gold Bars Being Put Into A Storage Box

Gold IRA custodians can also help you facilitate the storage of the precious metals in your IRA. You cannot store these assets yourself; instead, you must send them directly to a reputable depository.

You can choose between segregated vs. commingled storage options. Segregated storage houses your metals in their own locker or storage unit; commingled storage generally consists of a vault that holds the metals for multiple customers. You will pay more for segregated storage but may gain greater peace of mind in turn.

IRS-approved storage depositories insure their assets and use multiple security measures to protect them. Your custodian can steer you toward trustworthy precious metals storage options.

How Are Gold IRA Custodians Governed?

The IRS requires gold IRA custodians to apply through Revenue Procedure 2021-4 and meet the guidelines in Treasury Regulation Sections 1.408-2(e)(2) through 1.408-2(e)(8). Generally, custodians must meet these guidelines:

  • Provide documentation proving how long they have been in business
  • Have an established physical location
  • Have fiduciary experience
  • Provide documentation for rules of conduct followed while managing retirement plans
  • Showcase a high degree of financial responsibility
  • Prove competency in handling retirement funds

How Much Do Gold IRA Custodians Usually Charge?

Gold IRA custodians charge a few different types of fees for their services, including:

  • Setup fees: One-time costs to facilitate your account setup, usually between $50 and $100
  • Annual maintenance fees: Yearly costs for managing your account, ranging from $100 to $500+
  • Storage fees: Often based on the value of your IRA, such as $1 per $1,000 in storage

The fee structure can vary significantly between gold IRA custodians.

All in all, you can expect to pay a few hundred dollars yearly to your custodian. This cost gives you peace of mind that your IRA meets all regulatory guidelines and that the precious metals within your IRA remain safe. Be sure to ask your preferred gold company about any specials or promotions they may be running to help pay for these.

Preserve Gold can help you open a gold IRA and choose the precious metals to invest in. Contact us today at 877-444-0923 to get started.

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