Purchasing Bullion for a Precious Metals IRA




Precious Metals IRA Bullion

The stability in price of gold and other valuable metals have made investments in precious metal IRAs a safe and popular option. One can invest in both physical and non-physical metals within the investment account. There are trust companies that allow physical gold to be included in such self-directed accounts. You can invest in gold coins and rounds, gold bars and gold ingots as well as other precious metal products like silver coins, platinum ingots and palladium bars.

The first thing to do is open an account with a trust company that will act as your custodian. Physical metals can be held as part of this account. However, purchasing bullion for a precious metals IRA is only done by the trustee. The trustee will purchase the fine metals on your behalf as you are not permitted to buy the metal products yourself. For the same reason, you cannot add such metal bars or coins that you already own.

Nonetheless, you are allowed to choose a dealer that the custodian will purchase the metal from. Just as with buying physical gold yourself, you will have to do some research on your part. You will need to make a recce of the relevant market to see who is offering the best prices. You must carefully consider the terms of purchase and the nature of fees involved. Once you have decided on the dealer, you communicate this to the trustee service who will manage your investment account. The company will then purchase the metal products with the money you have deposited into the fund.

One must remember that not all types of gold and silver bullion for a precious metals IRA are allowed. Gold, silver, palladium and platinum were made permissible for retirement accounts after the Tax Payer Relief Act of 1997 broadened investment options for IRAs. However, there are still restrictions regarding the nature of gold and other products which you may hold. All gold bars, coins and rounds need to be .95 fine to be eligible for account possession. Silver products need to be .995 fine. And for platinum and palladium, .9995 fineness is required. If you want to invest coins, gold coins like the U.S. Buffalo and the U.S. Gold Eagle are allowed. However, the South African Krugerrand is not permitted due to its greater percentage of alloy. Since the trustee will manage the purchase of the metals, you generally do not need to worry about the permissibility factor. However, the kind of products to be bought – bullion coins, bars, ingots or rounds should ideally be decided by you. You may also ask for recommendations from both the trustee and the dealer.

Once the purchase is done, the metals will be added to your account. The products are then stored with a trusted depository service. When you withdraw your IRA, the custodian sells the products and you are handed an appropriate cash amount. The trustee company provides these services for a fee. The companies typically charge a management fee, annual storage and insurance fees, plus a one-time setup fee. Make sure you discuss the fees beforehand when searching for a reliable trust company.