Gold IRAs: Pros and Cons

Pros

• Provides a hedge against inflation and economic downturns
• Diversifies an investment portfolio
• Grants the investor more control compared over their assets to a typical retirement account
• Offers certain tax incentives
• Investors have a choice between many varieties of gold coins and bullions, in addition to other precious metals, in which to invest

Cons

• Does not pay dividends or interest
• May come with expensive custodian fees
• Rigid IRS custody guidelines limit the choice of trustees and prohibit self-storage

5 qualities to look for when investing in a gold IRA

1. Fair IRA fee structure

Before you consider going with a gold IRA company or custodian, parse their website to make sure that all the pricing details of the plans on offer are clearly expressed. Check for information on all the fees associated with the plan, including the initial processing fee, storage fees, and the annual maintenance fee. Make sure the plan’s fee schedule is written out in detail, and that the company doesn’t attempt to hide fees in the small print.

Another thing to look for is a flat annual fee, rather than a scaled fee model, particularly if you plan to invest a large number of funds. Companies using a scaled fee model can hike up the annual fee considerably over time.

2. High ratings

Check that a company has a high rating from all the leading authority bureaus, including BCA (Business Consumer Alliance), BBB (Better Business Bureau), and Trustlink. With the many gold IRA options available, a poor star rating or a multitude of negative customer reviews and complaints about a company should be an immediate disqualifier.  You can also check websites like Yelp and Complaints Board for useful customer feedback on gold IRA companies.

3. Alternative investment options

Unlike a traditional IRA, which is usually limited to stocks, bonds, and other common “paper” investments, a gold IRA is a self-directed IRA, which gives you more freedom on the types of investments you can make.

Check if the gold IRA company you are considering offers intriguing alternative investment options like real estate, cryptocurrencies, and others that allow you to diversify your portfolio beyond your initial gold investment.

Check out our roundup of the Best Self-Directed IRAs

4. Proper licensing

A company should have all the necessary licenses, qualifications, and forms of insurance to handle your investment and advertise them on the company website. Companies authorized by and/or a member of third-party organizations such as the Numismatic Guaranty Corporation (NGC), TRUSTe, and the Industry Council for Tangible Assets (ICTA) are more trustworthy than those that lack such qualifications.

5. Prompt, helpful customer service

Make sure company representatives respond to your questions and concerns quickly and informatively. Are they knowledgeable and able to support their claims with data and proof?

Be wary of agents that reply with misdirection, unverifiable information, or hazy responses, which could be warning signs that a company is not trustworthy. Additionally, steer clear of companies with pushy agents using aggressive sales techniques or those that try to convince you to invest in collectibles that are not eligible for use in an IRA.

After making an investment with a gold IRA company, you will be dealing with them for a long period, so any initial warning signs that its representatives won’t be helpful and transparent should convince you to steer clear.

4 things to avoid when choosing a gold IRA

1. Paid reviews

There’s a glut of websites on the web claiming to offer honest, unbiased reviews of gold IRA companies. However, often the opposite is the case. Many websites may be receiving compensation from the IRA company in exchange for glowing reviews on their site. Basically, they are operating a shrouded affiliate marketing program.

There are two clear giveaways that a website is connected with a gold IRA company reviewed on their site. One, a majority of reviews on the page are for one gold IRA company, and leading gold IRA providers are ignored, or go unmentioned. Two, there may be a disclaimer hidden at the bottom or side of the page wherein the site reveals that they are compensated by the gold IRA company reviewed on the website.

2. Ineligible or overpriced gold coins and bullion

Gold coins and bullion must meet IRS requirements in order to be used in an IRA, however dodgy companies may try to push coins that do not meet the proper standards. In order to qualify for IRA investment, a gold coin or bar must meet a fineness (purity) requirement of .995, with the exception of Gold American Eagle Bullion Coins, which have a fineness of .9167. Before you go with a gold IRA company, independently verify that their gold meets IRS standards.

Shady gold IRA companies also might try to advertise gold coins as more valuable than they actually are. Trying to pass off bullion coins as numismatic coins (coins that are rare collector’s items) is one common tactic of untrustworthy companies. Generally, it’s best to avoid any coins described as “rare” or “exclusive” if that’s not what you are looking for.

3. Unlicensed companies

The custodian of your gold IRA must have a proper license to meet IRS storage requirements, which are detailed in IRS Publication 590-A. It is up to you to verify that the custodian you choose is in possession of this license.

4. Offer of home storage

The value of gold is high, and storing a lot of it is best left to organizations with the necessary security to protect your investment. Though home storage is technically allowed through a creative reading of the tax code, it’s a risky proposition and not the wisest choice. Therefore, companies endorsing this option should be met with skepticism. 

Our picks for best gold IRA

Goldco

• Annual account maintenance fee: $175 annually for investments under $100,000, $225 annually for investments of $100,000 or more. 
• Storage fee: Depends on the custodian.
• Minimum investment: $25,000
• Precious metals: gold, silver

Goldco is one of the best, most well-respected companies specializing in gold IRAs. The firm has been accredited with the BBB since 2012 and has earned an “A” rating from the organization, as well as from the BCA and Trustlink.

With its client-driven focus, customers can expect professional, attentive customer service and personalized services from Goldco, while the company’s top-of-the-line storage facility assures that your precious metals are secure, yet accessible when necessary.

In addition to gold, customers can also sell high-grade silver coins and has a sister company, CoinIRA, that specializes in digital currencies. Due to its reasonable fees, excellent customer service, and the option to diversify your investments, Goldco is our pick for the best gold IRA company.

American Hartford Gold Group

• Annual account maintenance fee: No information given on the website
• Storage fee: Varies depending on the value stored
• Minimum investment: None
• Precious metals: gold, silver, platinum, palladium

American Hartford Gold Group distinguishes itself by not placing a minimum investment for gold IRAs, unlike most companies in the industry. Furthermore, the Los Angeles-based company doesn’t charge setup or transfer fees and offers a buyback plan where customers may sell their precious metals without taking a hit through heavy additional fees.

The company is well-respected, earning an “A+” rating from the Better Business Bureau, and an “A” rating from the Business Consumer Alliance.

Birch Gold Group

• Annual account maintenance fee: $90 setup fee, varying annual fees
• Storage fee: $75-$100 depending on the choice of custodian
• Minimum investment: $5,000 for a non-IRA investment, $10,000 for a gold IRA account
• Precious metals: gold, silver, platinum, palladium

Birch Gold Group separates itself from the pack through its honesty and frankness in dealing with customers. The Burbank, California-based firm is upfront with potential investors about the risks and advantages of investing in precious metals and works with them to settle on the right investment for the customer, rather than use pushy sales tactics. This philosophy has earned Birch Gold an “A+” rating with the Better Business Bureau, along with glowing customer reviews on the site.

Customers will pay a $90 setup fee, $75 or $100 a year for custodian fees (depending on whether they choose Stata Trust or the Delaware Depository as their storage option), as well as an annual maintenance fee, although the website is unclear about the exact amount. 

Oxford Gold Group

• Annual account maintenance fee: $175 annual maintenance fee for accounts below $100,000
• Storage fee: $175-$225 depending on custodian used. Rebate offered by Oxford Gold Group may cover storage fees for 1 to 5 years
• Minimum investment: $7,500 per IRA purchase
• Precious metals: gold, silver, platinum, palladium

The founders of Los Angeles, California-based Oxford Gold Group boast over 20 years of experience in precious metals, and it shows: the owner-operated company offers some of the best customer service in the industry. The company’s knowledgeable, attentive agents ease the decision-making process and assist customers through every step of setting up a self-directed IRA in gold–in bar or coin form–or any of the other precious metals the company has for sale.

Storage is handled by one of several trusted vault companies, and the associated fees may be waived through a rebate offered by Oxford Gold for up to 5 years, depending on the size of the IRA. Overall, Oxford Gold is a terrific choice for an IRA in gold or other precious metals.   

Gold Alliance Capital

• Annual account maintenance fee: Flat fee of $175 a year covers storage, insurance, and online account access
• Storage fee: Included in annual fee
• Minimum investment: No minimum investment
• Precious metals: gold, silver, platinum, palladium

A young firm founded in 2017, Gold Alliance Capital is a great choice for a self-directed IRA in gold or other precious metals on offer. The company does not require a minimum investment and stores your precious metals for no additional charge in an IRS-approved storage facility in Delaware.

Despite being a young company, Gold Alliance Capital has a great track record, boasting an “A+” rating from the Better Business Bureau, as well as a 5-star user rating on the website.  

Regal Assets

• Annual account maintenance fee: $100
• Storage fee: $150
• Minimum investment: $5,000 for the lowest investment package
• Precious metals: gold, silver, platinum, palladium

Regal Assets is one of the most trusted firms in the business, boasting an “A+” rating from the Better Business Bureau, and an “AAA” rating from the Business Consumer Alliance. The company’s reputation is well-earned: Regal Assets offers a wide variety of investment portfolios catered to customers with different levels of capital and charges a flat rate of $250 that covers everything, including maintenance and storage.

You can expect great customer service from Regal Assets, and representatives are knowledgeable about the different packages and precious metals on offer, helping people to make the investment decision that’s right for them. Storage is handled by Brinks, one of the best names in the industry.  

Patriot Gold Group

• Annual account maintenance fee: No annual fee. Customers pay a one-time $225 setup fee, although it is waived for investments over $30,000
• Storage fee: Vary depending on the choice of custodian and storage facility
• Minimum investment: $15,000
• Precious metals: gold bullion and coins, silver, platinum, palladium

Patriot Gold Group is an attractive option for those interested in gold or precious metals IRA due to their lack of annual maintenance fees and the perks awarded to those purchasing high-level investments, including the No Fee For Life option for accounts topping $250K.

Patriot Gold Customers must choose their own custodian and pay the associated storage fees, which comes with additional responsibility compared to other Gold IRA companies that handle storage. However, Patriot Gold often works with STRATA Trust and can assist customers with making a storage arrangement with the company.   

Advantage Gold IRA

• Annual account maintenance fee: $75 for accounts under $100,000, $125 for accounts above $100,000
• Storage fee: $100
• Minimum investment: None
• Precious metals: gold, silver, platinum, palladium

Advantage Gold has a lot to offer those interested in a gold IRA investment. The company has a variety of precious metals for sale, in bullion and coin form, and boasts exceptional customer service, proof of which can be seen in glowing customer reviews on the Better Business Bureau and Trustlink websites.

Unlike many precious metals dealers, Advantage Gold has a flat storage fee of $100, regardless of the size of the investment, and annual custodian fees are fair and affordable. Storage is typically handled by Brink’s or the Delaware Depository in Wilmington, DE.  

Orion Metal Exchange

• Annual account maintenance fee: No set-up or transfer fee.
• Storage fee: $75-$100
• Minimum investment: $5,000
• Precious metals: gold, silver

With over 50 years in the business, Orion Metal Exchange is one of the most reputed precious metals dealers around. They have a wealth of silver and gold coins available for purchase, and while not all the coins are acceptable for an IRA account, customer service representatives will help you choose the metals that are right for your purposes. As a plus, Orion’s website tracks up-to-date gold prices.

In terms of costs, Orion’s fees compare favorably with other companies in the industry. They don’t charge a setup or transfer fee, and insurance is included in the affordable storage fee. Those making a high-level investment may even have their storage fees waived for up to 3 years. 

APMEX (American Precious Metals Exchange)

• Annual account maintenance fee: One-time setup fee of $50. Annual fee of $75 for a gold IRA
• Storage fee: $15 a month for investments of $33,000 or less, Storage fee for higher investments is calculated based on the total value ($23 a month for an investment of  $50,000)
• Minimum investment: $2000
• Precious metals: gold, silver, platinum, palladium

APMEX’s biggest draw is the sheer variety of metals available. With over 10,000 items for sale, APMEX offers something for everyone, including those hoping to put their retirement funds into a gold IRA, as well as for enthusiasts of rare, collectible coins. The firm’s online store makes buying coins, metals, and other products a no-hassle proposition, and purchase can be done using a major credit card, bank transfer, or bitcoin.

Founded in 1999, the Oklahoma City, OK-based firm has plenty of experience dealing with precious metals, which is seen in their clear, upfront pricing, and top-notch customer service. APMEX uses its subsidiary Citadel Global Depository Services as a storage facility, which is protected by Brinks Security.

What is a gold IRA?

A gold IRA is an Individual Retirement Account (IRA) where the investor holds physical gold bars or coins rather than stocks, bonds, or other types of “paper” investments. In addition to gold, precious metals such as silver, platinum, and palladium can also be used in an IRA. To be eligible for use in an IRA, gold and other precious metals must meet rigid “fineness” (purity) requirements.

Since gold and other precious metals used in IRAs like silver, platinum, and palladium necessitate storing, the Internal Revenue Service requires gold IRA holders to entrust a custodian, such as a bank or a brokerage firm, to manage their physical assets securely. While certain parts of the law can be read to allow for home storage, investors typically store their precious metals in a bank, credit union, or specialized storage facility due to the risks associated with keeping valuable metals at home. Gold IRA custodians must comply with strict IRS guidelines on asset security, accounting, and reporting.

Why are gold IRAs so popular?

Investors have become more attracted to Gold IRAs in the past decade due to the higher level of control involved in physical assets, as opposed to paper investments. The value of gold is independent of the stock market, which is prone to unpredictable fluctuations and unforeseen crashes. Demand for gold IRAs since the Great Recession of 2007-2009 has spurned a significant increase in firms that offer gold and other precious metals as an investment.

Financial advisors often recommend that investors put a portion of their assets into a gold or precious metal IRA as a means of diversifying their retirement portfolio to complement stocks and mutual funds, rather than putting their entire retirement savings into one. Since the value of gold usually moves counter to the value of paper assets, a gold IRA offers a way to hedge against inflation and stock market downturns.