How Much Does It Cost to Start a Gold IRA?

Gold IRA startup costs overview

A gold IRA is an investment account that’s backed by gold rather than intangible assets like stocks or bonds. While a gold IRA functions similarly to a traditional IRA, you’ll face much steeper startup costs when you set up an IRA backed by precious metals (i.e., gold, silver or platinum) since you’ll have to purchase the gold and pay to have it stored.

In the first year after you open a gold IRA, you’ll pay one-time setup and administrative fees, along with potential rollover fees and wire transfer charges. These typically cost between $200 and $700. After that, ongoing yearly fees like administrative and storage fees may apply.

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Gold IRA setup fees and minimums

The first step in setting up a gold IRA is to find a custodian to open the account. Expect to pay a one-time setup fee of $50 to $300 for this service. Next, you’ll purchase the gold to fund your account, which may also require a one-time fee. Finally, you’ll pay the first storage fee to the depository of your choice.

Typical minimum investment requirements

These fees often vary based on the amount of money you’re depositing into your gold IRA. Minimum investment requirements help ensure fees remain a reasonable percentage of total assets.

Gold IRAs do typically require a higher minimum investment than a traditional IRA not backed by precious metals. For example, American Hartford and Birch Financial both require a minimum investment of $10,000. Noble Gold requires less at $5,000, while others may require as much as $20,000 to $50,000.

Rollover and transfer fees

Once your gold IRA is set up and ready to go, there are a few different ways to deposit money into it. If you opt for a wire transfer or a rollover (direct or indirect), there will likely be small administrative fees for this, typically around $25 per transfer at the time of publishing.

Your account paperwork should clearly list any fees associated with transfers and deposits, which are different from the one-time fees you’ll pay when you open your gold IRA.

Below is a summary of approximate one-time fees associated with opening a gold IRA:

• Set-up fee: $50 to $300
• Dealer markup/spread: 3% to 15% of purchase price
• Rollover/transfer fee: $25 to $50

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Gold IRA annual fees and storage

In addition to the one-time fees you’ll have to pay to open your gold IRA, you should expect to face recurring fees every year you keep your account open. In this section, we’ll outline gold IRA yearly fees and include a brief explanation of the purpose of each fee.

Annual gold IRA fees

Here’s a closer look at recurring gold IRA fees you may encounter each year. Understanding these charges can help you estimate the true long-term cost of maintaining your account.

• Administration fees: Fees that cover account oversight, reporting and compliance work
• Storage fees: You’ll pay for the space required to store the gold that backs your IRA
• Insurance fees: These fees protect your gold in the event of theft or loss
• Wire transfer/deposit fees: You might be charged a fee each time you transfer money into your account
• Statement fees: Fees that account for the printing and issuance of account statements

Segregated vs. commingled storage costs

There are two different storage options for gold IRAs: segregated or commingled. You can choose to store your gold by itself in the exact amount of your IRA, or you can store it alongside lots of other gold and own only a claim to that stockpile of gold.

Commingled gold often means you’ll pay less in annual storage costs ($100 to $250 annually vs. $150 to $300 for segregated gold storage fees), but it’s a less individualized experience.

Gold IRA buying premiums and spreads

When dealing in gold and other precious metals, you’ll often hear the term “spot price.” The spot price is the current market price of a metal before markups and fees.

A typical spread is about 3% to 10% and typically covers shipping, dealer profit and distribution.

When you hire a gold dealer to purchase gold for your IRA, the dealer will charge what’s called a “spread.” This is the dealer’s markup for doing the work of purchasing the gold.

Dealer premiums over spot price

The premium is the amount you pay above the value of the gold itself  (i.e., the spot price) and includes the dealer’s market (i.e., the spread).

Different types of gold assets have different premiums. Gold bars often have lower per-ounce premiums than gold coins. Rare or specialized gold carries the highest dealer premiums, often between 15% and 35% or higher.

Sellback spreads below spot

When you’re ready to sell some or all of your gold assets, you’ll usually face a negative spread.

Sellback spreads typically run 1% to 2% below spot price when liquidating holdings, since the dealer who purchases from you has to account for risk and fees — and earn a profit as well.

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FAQ

Bottom line: Is starting a gold IRA worth it?

A gold IRA can diversify your retirement portfolio and hedge against market volatility, but comes with higher fees and investment minimums than traditional IRAs. If you value relative stability and can afford the costs, a gold IRA may be worth it. But investing in gold isn’t for everyone. Consider your financial goals and all the costs to start and maintain a gold IRA before deciding.