Gold IRA Depositories
IRS-Approved Gold IRA Storage
Investors are always hunting for new places where they can invest their money to earn a return. In recent years, one of the most popular places to invest has actually been in one of the oldest assets. This is because in 1997 the U.S. government allowed precious metals to be included in Individual Retirement Accounts (IRAs).
Now, if investors want to include precious metals in their IRA then they will need to store those metals in what is known as a depository.
This article will take a look at that process as well as some IRS-approved gold IRA depositories.
What is a Gold IRA?
Before we can talk about gold IRA depositories (storage), we first need to highlight what a gold IRA (Individual Retirement Account) is.
A gold IRA is a type of Self-Directed IRA (SDIRA) that offers the account holder a lot more flexibility on what kinds of assets they can hold in the account. For the most part, Traditional and Roth IRAs only allow the account holder to invest in stocks, mutual funds, ETFs, or something similar. On the other hand, gold IRAs allow their account holders to invest in:
- Precious metals
- Real estate
- Tax lien certificates
- Limited partnerships
Even though the account holder of an SDIRA can invest in many things besides precious metals, “gold IRA” is the common nickname for these types of accounts.
Take a look at some of the most popular gold IRA investment companies.
How account holders invest in precious metals
One thing to note is that the people who use a gold IRA to invest in precious metals are actually buying the physical product (as opposed to a mutual fund that tracks the spot price of gold). Precious metal products are usually broken down in the form of coins, bars, or bullion.
The four main types of precious metals that are allowed to be included are:
Since an ounce of physical gold currently costs about $1,800, even a small amount of pure gold is incredibly valuable. This begs the question: What do investors do with their gold products once they have purchased them?
This is where depositories come into play.
What is a Gold IRA depository?
If precious metal products have been purchased as part of an IRA then they are legally required to be stored in 3rd party gold IRA depositories.
A depository is defined as a company that owns a highly-secure building to protect investors’ assets. It is essentially a safe house where investors can store their precious metals with bank vault-level security. This gives the investors peace of mind knowing that their investments are safe and also means that they do not have to worry about storing these valuables in their home.
A few of the strategies that depositories implement to ensure the safety of investors’ assets are:
- Constant monitoring
- Disaster-proof structures
- Armed security
- Insurance that guarantees investors’ assets to a large extent
Another interesting thing to note is that you can request that your metals are not mixed with other precious metals in gold IRA depositories. Which means that your gold will be kept in its own vault section, usually a uniquely labelled shelf, separated from everyone else’s. This is called segregated storage.This is much different from a bank, which will mix all of their deposits together and just record everyone’s holding. This is called allocated storage, or sometimes referred to as commingled or non-segregated.
If an investor wants to open a gold IRA then they are legally required to keep their precious metals in an IRS-approved depository. These specific depositories are sanctioned and regulated by strict IRS guidelines. and there are two main reasons why they are beneficial to investors:
IRS-approved gold storage
Although there are quite a few depository companies out there, only a handful are approved by the IRS to be your Gold IRA storage solution. There are two main advantages to working with an IRS-approved depository:
- Following IRS restrictions – Once you take delivery of the gold in your IRA, it is considered a taxable distribution. To avoid this, most investors will ship their gold directly from a third-party to the depository. Using organizations that are approved by the IRS will let the investor know that all necessary tax laws are being followed.
- Security – Using an IRS-approved depository, you will have peace of mind knowing that your assets are stored with an organization that goes through a secure auditing process.
5 IRS-approved Gold IRA depositories
- Brinks Global Services – A household name, known for carrying large amounts of cash in armored vehicles. Brinks Global Services also offers a gold IRA depository storage facility with authorized depositories located in Los Angeles, Salt Lake City, New York City, and London.
- Delaware Depository Service Company – Approved by the IRS and licensed by the CME Group as an exchange-approved depository for the NYMEX and COMEX markets. The Delaware Depository Service Company offers gold IRA storage in Wilmington, Delaware and also have storage available in Orange County, CA, Canada and Switzerland. DDSC maintains $1 billion in “all-risk” insurance coverage from Lloyd’s of London, including a $100,000 per packaged shipping insurance coverage.
- CNT – CNT is a COMEX-approved gold IRA depository based in Bridgewater, Massachusetts. They are known for being the largest seller of raw gold to the federal government.
- International Depository Services (IDS) – International Depository Services (IDS) Group offers two U.S.-based, strategically-located, full service precious metals depositories: IDS Delaware, IDS Texas.
- JP Morgan Chase Bank NA – They have more than 3 decades experience in providing services related to precious metals. JP Morgan Chase became an approved depository relatively recently in 2011. They offer offshore storage in London and Singapore.
If rolling over your current IRA into one backed by precious metals is something that you are considering then your first step should be to call a custodian (a brokerage). They will be able to help you get started and advise you on the proper steps to take to make sure that all legal requirements are met.
We hope that you have found this article valuable when it comes to learning a little more about IRS-approved gold IRA depositories.