A gold IRA or precious metal IRA is an individual retirement account in which physical gold or other approved precious metals are stored for the benefit of the IRA account holder. It works in the same way as a regular IRA, except that it holds physical investment coins or bars instead of paper assets. In a gold IRA, you can hold real physical gold. It must comply with IRS standards and be held by the IRA trustee, not the IRA owner.
It must also be kept in an IRS-approved depository. Gold IRA rules require that you store eligible precious metals with a national depositary, bank, or IRS-approved trustee. Your custodian bank can refer you to an approved institution and process the gold transfer as part of setting up your Gold IRA. If you want to avoid the complications of investing in physical gold, you can find out how to buy a gold ETF.
Precious metals such as silver and gold, platinum and palladium are regarded as hedges against inflation and stock market volatility. Gold IRAs allow you to hold these precious metals in an individual retirement account. A gold IRA or a custom precious metal IRA cannot store every type of physical gold or precious metals. Gold American Eagle Bullion Coins, however, are the only gold coins that are an exception to the purity guidelines. You can invest in gold stocks, such as stocks of gold mining companies or gold licensing companies, which help finance mines.
A gold IRA must be kept separate from a traditional retirement account, although the rules surrounding things like contribution limits and distributions remain the same. As long as there is gold on this earth, it is not too late to open your own IRA for self-directed precious metals. These funds buy up a basket of gold-related investments, such as stocks in various gold mining companies. Some investors think this is safer, an opinion that gold IRA companies sometimes misleadingly hold.
If you have a Gold IRA, you’ll incur costs for managing and maintaining the account and storing and insuring your gold. The company offers investment options for gold and silver and uses Delaware Depository, a popular choice among gold IRA providers, to store customer assets such as gold coins and gold bars. Some gold IRA companies describe their offerings as diverse because you can hold more than one type of precious metal in them. The IRS does not allow popular gold coins such as the South African Krugerrand or British sovereign coins to be stored in a gold IRA.