Gold IRA Fees Explained

Gold IRA fees explained by type

When you open a gold IRA, you’ll be subject to both one-time and recurring fees.

One-time fees are assessed at the time you open your account, and include payments to custodians, dealers and depositories. After that, there are several annual fees required to keep your account up and running each year.

One-time setup and rollover fees

• Setup fee: Find a custodian to set up your gold IRA. Most gold IRA companies charge a setup fee that ranges from $50 to $300. Sometimes, this fee can be waived.
• Transfer fee: To fund your IRA, you can deposit funds directly or via wire transfer, or you can rollover money from a 401(k) or another retirement account. Expect to pay a nominal transfer or rollover fee for the transaction, usually between $25 to $50. Check your account paperwork for specific deposit and transfer fees.
• Precious metal premium: Your gold dealer needs to realize a profit for its work, and they’ll have to cover minting, shipping and distribution. As a result, your gold dealer will charge a premium, typically between 3% and 15% of the purchase price.

Recurring annual charges

In addition to the one-time charges associated with setting up a gold IRA, there are ongoing annual fees as well. These fees include:

• Transaction fees: Transaction fees can apply any time you purchase additional gold for your IRA, often charged on a “per transaction” basis. These fees can vary based on your custodian, and should be clearly outlined in your account paperwork.
• Annual account fees: Account fees cover things like bookkeeping and administration of your account, and typically range between $50 and $150 annually.
• Wire/transfer fees: It’s common for IRA custodians to charge a wiring fee for funds you have wired or transferred in or out of your account. A typical charge is $25 per transfer.
• Storage fees: You’ll pay an annual storage fee for each year your gold (or other precious metal) is held in a depository. Fees vary based on the depository, but you can expect fees to be based on the amount of gold held for you.

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Gold IRA spreads and metal markups

Every precious metals dealer makes money — usually through spreads and markups.

Gold has a market, or “spot,” price, but rarely trades at that price. Markups and fees get factored into the trade.

A spread is the difference between what a gold dealer pays for gold and what they charge you for it. The spread covers the costs of doing business, like shipping, inventory, insurance and other overhead fees. The dealer should factor the spread into every buy and sell decision you make.

What spreads and premiums mean in practice

When purchasing gold, silver and other precious metals, consider both the amount the dealer charges you over market price (the premium) as well as the amount at which they would buy back your gold, which should include the dealer’s cost for doing business (the spread).

In other words, the answer to “how much above market value am I buying gold for?” is the premium. Whereas, the answer to “how much would I net if I buy and then sell to a gold dealer?” is the spread.

Typical dealer premiums by product

Markup fees can vary based on the type of gold product being purchased.

The table below displays different dealer premiums for some of the most common gold products you can purchase to fund your gold IRA.

There are several ways to research current and historic gold IRA statistics, as well as verify spot prices for gold products using real-time market data. Kitco is a reliable source, as is Bullion Price Hub and JM Bullion.

When markups become predatory

Premiums and markups are to be expected with any gold transaction: they are a legitimate part of purchasing precious metals. But that doesn’t mean you shouldn’t keep an eye out for predatory pricing.

Premiums that are dramatically higher than others for similar products are the main sign of predatory pricing on gold products, but also watch out for vague buyback terms or spreads, false or outrageous claims about a coin’s value or an out-of-reach break-even price.

In general, you should expect a markup range of about 3% to 8% for a gold bullion coin. Anything higher than that should be carefully scrutinized. Pay close attention to exactly how much of the purchase price goes toward the gold itself rather than fees and premiums.

» RELATED: Gold IRA scams to avoid

Gold IRA storage options and related fees

Since gold IRAs are based on physical gold bars or coins, you’ll need a place to store the metal. The IRS places strict requirements on how gold is handled. It must be stored in an IRS-approved depository in order to avoid immediate taxation on the gold.

Gold IRA storage options

Most depositories provide you with two options for storing gold assets: commingled or segregated.

Commingled storage means your gold is stored along with other gold. Instead of a specific asset, you’ll own a share of the stockpiled gold. This is usually a slightly cheaper storage option.

Segregated storage allows you to store your specific gold assets in a separate vault. It’s a more expensive option, but it facilitates greater tracking of your gold.

Storage fee structures

When it comes to storage fees, your depository might assess fees as flat rates, or they may charge you a small percentage of your account value.

Gold IRA one-time and recurring fees

When one-time and annual fees are taken into account, opening a gold IRA may not make sense — especially if you don’t plan to keep a lot in your account.

For example, estimated one-time fees of $700 to $1,500 on an account with $10,000 equals 7% to 15% of the account’s value, while those same fees are only 3% to 7.5% on an account valued at $100,000.

One-time fees

A set-up fee of about $50 to $300 will be assessed when you first open your gold IRA. Additional fees include nominal wire fees and rollover/transfer fees.

Annual fees

You can also expect ongoing fees associated with your gold IRA, including administration, storage and insurance fees. Each time you move assets into or out of your gold IRA, you’ll pay transfer and/or deposit fees. Other small fees, such as statement fees, might also apply.

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