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Buying into a gold IRA is one thing, but knowing how to properly store your newly purchased metals is another. As we know, the IRS doesn’t allow IRA and 401k investors to store their gold at home (this couple tried and ended up in deep trouble with the IRS) so it’s important that IRA and 401k owners understand how storage works and make a well-informed decision when it comes to where to put away their gold and silver bullion…
What to look for in a gold IRA storage company?
When choosing a storage company for your gold IRA investments, you should consider the following:
- Compliance with IRS regulations: The IRS has specific regulations concerning which types of precious metals can be included in an IRA and how they should be stored. Ensure that the storage company is familiar with these regulations and complies with them. The metals should be stored in a manner that meets IRS standards.
- Security: The company should have state-of-the-art security measures to protect your investment. This includes 24/7 monitoring, alarm systems, vaults, and guards.
- Insurance: Check if the company has sufficient insurance coverage to protect your assets in the event of theft or damage.
- Type of Storage: Check whether they offer segregated (allocated) storage, pooled (unallocated) storage, or both. Segregated storage means your assets are kept separately from other investors, while in pooled storage, your assets are mixed with others. Each has its own advantages and disadvantages, so consider which type is best for your needs.
- Access and Delivery: Find out how you can access your gold and what procedures are in place if you want to take physical possession of it. Understand the timelines, costs, and processes involved.
- Fees: Understand all the costs involved. This includes setup fees, storage fees, and any additional charges. Fees can vary greatly among companies, so be sure to shop around.
- Reputation and Reviews: Do some research on the company’s reputation. Read customer reviews, check their ratings with business bureaus, and see if they’re involved in any litigation or regulatory issues.
- Customer Service: Good customer service is crucial. The company should be able to answer all your questions promptly and clearly. You should feel comfortable with their level of service and professionalism.
- Audits: Regular third-party audits should be conducted to ensure that the gold is being stored correctly and is accounted for. The results should be available to customers.
- Longevity and Experience: Companies with a long track record in the business and considerable experience in handling gold IRAs are usually more reliable.
- Locations of their vaults. Large companies like Brinks or IDS tend to have vaults in several states. Ask them to give you a full list of vaults that you can choose from. Some investors believe it’s best to choose a vault that is close to one’s primary residence, which makes it easier to retrieve one’s gold. Others believe it’s better to choose a state that is pro-gold like Texas, Idaho or Montana. Collin Plume, CEO of Noble Gold, is a big proponent of storing gold in the state of Texas. In fact, his company was the first to offer Texas-based storage for Gold IRA investors. See a full interview of Mr Plume in this article.
Deciding where to store your gold is an important decision, so please make sure to do your own due diligence, research and perhaps even consult with a financial advisor before choosing a storage company for your gold IRA.
Types of Storage Facilities
When it comes to storing physical gold, there are generally two types of storage options: allocated (or segregated) and unallocated (or pooled). Each has its own set of advantages and drawbacks:
Allocated (Segregated) Storage: In this type of storage, your gold is stored separately from others’ assets in its own unique space, such as a safety deposit box or a specific area within a vault. This means that your gold is individually identified and stored. The bars (or coins) have specific numbers, and the ownership of these specific bars remains with you. This is often considered the most secure type of storage as your investment is not pooled with other assets and can be easily accessed when needed. However, it tends to be more expensive than unallocated storage due to the additional space and management it requires.
Unallocated (Pooled) Storage: With unallocated storage, your gold is part of a pooled inventory along with assets from other investors. You don’t have claim to specific bars or coins; instead, you own a portion of the overall pool of gold. The gold is the legal property of the storage provider, and you are essentially a creditor. While this option is typically less expensive, it can be riskier because if the company experiences financial hardship or bankruptcy, your investment may be at risk. Furthermore, in some cases, access to your gold can take longer because it’s part of a pooled resource.
Regardless of the storage type you choose, make sure that the storage facility is secure, insured, and reputable. For those considering storing gold as part of an IRA, the IRS requires that the metals be held in a qualified custodial storage facility.
Popular Gold IRA Storage Companies
Now, if you are working with a gold IRA company, you likely won’t have to deal directly with the storage partner. Gold IRA companies are one-stop shops that handle the entire gold IRA investment process and generally negotiate special partnerships with both IRA custodians and storage companies. If you are opening a gold IRA by yourself, without working directly with a gold IRA company, then you will likely have to find and negotiate with your own depository. Some of the most popular ones include:
Brink’s Global Services: Brink’s is a global leader in secure logistics and security solutions, including precious metals storage. They offer services in various international locations.
Delaware Depository: A popular choice for IRA custodians, Delaware Depository provides highly secure storage for gold and other precious metals.
HSBC Vault: HSBC, a well-known international bank, also provides vault services for the secure storage of precious metals.
Loomis International: Loomis is a global leader in the handling, storage, and transportation of cash and valuable goods. They offer safe and secure storage facilities for precious metals.
Malca-Amit: Malca-Amit provides luxury logistics solutions that include secure storage, shipping, and handling of precious metals and other valuable assets.
A-M Global Logistics: Based in Las Vegas, Nevada, this company offers a variety of services including secure storage and transportation of precious metals.
CME Group: They offer vaults in New York for gold, silver, platinum and palladium storage.
International Depository Services (IDS) Group: IDS has locations in Delaware and Texas, offering secure storage for precious metals.
Via Mat: They provide international logistics solutions, including secure storage and transportation of valuable goods. They have a location in Texas.
Dillon Gage Metals: In addition to being a precious metals wholesaler, they offer a storage program with locations in the US, Canada, Europe, and Singapore.
CNT Depository: CNT has a high-security private depository in Massachusetts, offering services for individual investors, institutions, and IRA custodians.
These companies provide highly secure, often independently audited storage facilities. It’s important to ensure the storage facility used by your Gold IRA provider is IRS-approved and provides adequate insurance coverage for your investment. You should also confirm whether they offer allocated (segregated) storage, meaning your assets are stored separately from those of other investors.
Fees and prices involved with gold storage
The fees associated with storage within a gold IRA can vary significantly from one depository to another. However, they generally include the following:
Setup Fee: This is a one-time charge to open your gold IRA account. Some companies may waive this fee.
Storage Fee: This is the annual fee charged for the storage and security of your gold. It’s typically charged as a flat rate, but some companies might charge a percentage of your account balance.
Insurance Fee: This fee covers insurance to protect your gold against damage or theft. Some custodians include this in the storage fee, while others may charge it separately.
Management/Administration Fee: This annual fee is for managing your IRA. This might include maintaining records, issuing statements, and handling IRS reporting requirements.
Transaction Fee: You may be charged each time you purchase, sell, or transfer gold within your IRA.
Distribution/Withdrawal Fee: If you decide to take a distribution from your IRA in the form of physical gold, there may be a fee associated with this process.
What about offshore gold storage?
For investors that don’t trust the government, there may be some offshore storage options for your gold IRA. I say “maybe” because this is a grey area. The Internal Revenue Service (IRS) technically requires that precious metals in a Gold IRA be stored at an approved depository. The IRS guidelines state that these depositories must be in the United States. However, some companies are registered in the US and have vaults offshore, in places such as the Cayman Islands and Singapore. Check out our offshore gold storage page for more info.
Amine Rahal is an entrepreneur and investor. He is passionate about alternative investments, Bitcoin, precious metals and startups. He enjoys covering US politics, retirement investing, alternative investing and geopolitics.
