Today we’re on the topic of storing your gold. There is a lot of bad information about there being published online, so we do our best here to keep this page updated with the truth about gold storage.
Simply speaking, the true definition of gold storage is a term that is simplified to mean storing your physical gold holdings along with other precious metals including silver, platinum, and palladium. You can store them in the form of gold bars, coins, and rounds.
Over the past 20 years, the price of gold and other precious metals has been dramatically on the rise. Why did this happen? One reason was a real change made by the IRS. Not that long ago, the IRS allowed precious metals like gold to be added to self-directed IRA accounts to invest in for retirement. Because of these retirement accounts, many new investors started purchasing gold and other precious metals and this helped create an additional increase in demand.
Nevertheless, this is a diverse type of investment that’s very different from stocks because physical storage is an absolute requirement. So, when investors purchase precious metals for their IRA account, gold storage through the proper channels becomes a complete necessity.
Why Precious Metals Storage is Required
The much-needed and necessary storage for precious metals like silver and gold is considered an absolute must according to the IRS. Sure, these valuable commodities require protection anyway and it wouldn’t make sense to keep them in your home. But the IRS demands proper storage in a dedicated gold storage facility.
Stocks are very different than owning gold. Your shares are stored electronically on a computer screen. Or if you prefer, you can get printed copies of the stock certificates and stick them in a folder in your drawer.
Precious metals like gold and platinum take up physical space. This means a proper storage location in a co-mingled or segregated vault meets the very specific requirements set forth by the Internal Revenue Service regarding ownership of physical precious metals for a self-directed IRA.
The Do’s of Gold Storage
Follow the Rules and Regulations from the IRS
If you choose to purchase precious metals like silver and gold for your self-directed IRA, you have limited choices as far as gold storage facilities are concerned. According to the rules from the IRS, you are not allowed to store physical precious metals within your home if they’re investments in your self-directed IRA portfolio.
Similar to the traditional or Roth IRA, your investments in precious metals must be deposited into a secure facility and placed under the control of a dedicated vault. This is necessary for tax related and tracking purposes, along with IRA account distribution tracking as well.
Throughout the years, independent storage facilities and vaults have popped up in record numbers as precious metals like gold became really popular investments. The companies handling storage work directly with IRA custodians and gold brokers to receive shipments and provide security for your investments in a locked vault in a storage facility. The bulk of these companies provide added insurance as a measure of additional protection as part of their protection plan.
Gold Bullion Storage
Gold storage exists in two basic types that include co-mingled and segregated.
With segregated storage, your precious metals investments are kept in a separate and dedicated vault that only you have access to. No other investments are stored in your dedicated vault, which provides an additional measure of protection that many investors appreciate.
Co-mingled storage means your investments are stored in a vault with precious metals from other investors. This physical storage option isn’t solely dedicated strictly for you. You have to share the vault with other investors. It’s less expensive than segregated storage and it’s just as safe.
Precious Metals Insurance Is a Good Idea
Are you buying precious metals that you intend to store in a safe at home? It’s a very good idea to properly insure all of your collectible and rare precious metals for the full value.
Many insurance policies cap the amount of insurance they’re willing to provide, so please keep this in mind. Frequently, they may only insure as little as $1000.
If you’re putting your investments in a safety deposit box, your gold and other precious metals aren’t covered by the FDIC. The bank also avoids responsibility for properly insuring safety deposit box contents.
It’s your right and responsibility to buy gold insurance, but the companies and insurance rate certainly vary.
Talk with Your Broker to Learn More about Private Gold Storage Facilities
As you search for a storage company for your precious metals, you should take time to research each company before signing your name on the dotted line. More often than not, brokers in the precious metals business along with IRA custodians can share information about gold storage companies that they most frequently do business with.
Choosing one of their recommendations is usually a good idea because it helps streamline the entire process from shipping to storage. This could also help with liquidity in case you ever need to sell your investments in the future. Why? Because the chain of custody in this situation is well-established. Your broker or IRA custodian will feel confident that the gold will be transferred to them quickly at the time of sale.
The Don’ts of Gold Storage
Don’t Treat Your Gold like Buried Treasure
Believe it or not, some people are foolish enough to bury their precious metals in their backyard. This is a foolish way to attempt to protect your gold investment. Instead, buy a safe for your house or store it in a dedicated facility.
Avoid Telling People That You Have Precious Metals Stored at Home
Are you thinking about storing gold at home? This is certainly your right if you aren’t purchasing these investments for a precious metals IRA. But it’s not necessarily the smartest thing to do.
Receiving a precious metals delivery could potentially tip off thieves, so make sure the company you buy from delivers your gold in discrete packaging. Otherwise, you may increase the chance of having your gold investments stolen from you when least expected.
Instead of storing your gold at home, consider purchasing access to a safety deposit box in a bank. First of all, banks are very difficult to break into. Second, you can use the safety deposit box to properly store other precious items like stock certificates, bonds, birth certificates, and other important items.
Finally, using a safety deposit box is convenient. It may not be as convenient as keeping your precious metals at home, but it’s convenient enough that you can access your investments easily at your local branch.
Have questions about gold and precious metals storage? Talk to one of these three gold custodian companies.
Precious Metals Storage Companies
Reading customer reviews is the smart way to research any gold storage company you want to do business with. Just remember that reviews are only one way to determine the success and validity of a company. It’s also wise to look them up on the Better Business Bureau website to find out their rating and learn of potential complaints. See how the organization responds to complaints and check to see if they’re handled in a timely manner.