Opening a gold IRA can be a great way to diversify your retirement savings and hedge against risk. However, like any investment account, gold IRAs come with fees that you’ll need to pay. It’s important to understand what fees to expect so you can budget accordingly and choose the right gold IRA company for your needs. In this comprehensive guide, we’ll break down the common fees associated with gold IRAs and help you know what to look out for.
Overview of Gold IRA Fees
The main fees charged by gold IRA companies include:
- Account setup fees – This one-time fee covers opening your account.
- Annual fees – Also called maintenance or administration fees, this yearly charge covers account maintenance.
- Storage fees – For holding your physical gold.
- Transaction fees – For executing trades. This includes buying/selling fees.
- Rollover fees – For transferring or rolling over funds from another account.
- Shipping & insurance – For delivery of physical gold bullion.
- Custodian fees – Annual fee paid to the custodian guarding your assets.
The amount you pay for each fee can vary widely among gold IRA companies. We’ll break down what to expect for each category next.
Account Setup Fees
When you open a new gold IRA, most companies will charge an initial account setup fee. This covers opening your account and getting it ready to fund and invest.
Account setup fees often range from $50 – $300. Some companies offer promotional pricing with discounted or waived setup fees to attract new customers.
What goes into the account setup process that warrants the fee? Opening a gold IRA is more complex than a typical IRA. It requires establishing a self-directed account, assigning a custodian, and coordinating gold delivery if investing in physical metal. This process takes time and resources for the gold IRA company.
However, the setup process is largely automated these days. Some companies absorb the setup costs themselves and don’t charge an upfront fee.
When comparing gold IRA providers, look closely at their account setup fee. Paying a high setup fee right off the bat can take a bite out of your initial investment. Companies that waive this charge can be more beginner-friendly options.
Annual Fees
One of the most common ongoing fees with gold IRAs is the annual fee. This fee is typically charged as a percentage of your total account value. Annual fees are also called administration fees, maintenance fees, account fees, or management fees.
Annual fees with gold IRAs often range between 0.80% – 2.0%, but can be higher or lower. Here are a few factors that influence the annual fee amount:
- Account value – Companies will charge a lower % fee for higher account balances.
- Level of service – More service, guidance, and hand-holding warrant a higher fee.
- Physical vs ETF gold – Owning physical gold is costlier for the company than using a gold-backed ETF in your IRA.
- Basic vs full-service – Some companies offer barebones accounts with lower annual fees and more DIY management.
Pay attention to the annual fee percentage and any minimums or maximums that apply. Companies targeting larger investors may charge under 0.5%, while more full-service providers catering to beginners could charge over 1.5%.
You can likely negotiate or reduce the annual fee once your account value grows. Review your fee and ask about discounts regularly.
Gold Storage Fees
If you want physical gold in your IRA, one of the main fees you’ll pay is for secure vault storage. This protects your gold bullion investment.
Gold storage fees are typically charged annually as a percentage of your gold’s value. Fees often range from 0.5% – 2% based on these factors:
- Type of gold – Coins have higher fees than bars since they take up more space.
- Vault location – Internationally diversified vaults have higher costs.
- Insurance – Full insurance coverage costs more than basic storage.
- Account value – Companies offer discounts for storing higher gold values.
- Number of items – Storing many low-value coins has higher fees than a few bars.
Evaluate both the % fee and any minimum dollar amounts. Some companies charge a flat $100/year minimum storage fee, for example. Get all details on physical gold storage costs before investing.
Paying for secure, insured vault storage is well worth the cost to protect your gold IRA. Be wary of companies that don’t charge for storage, as that likely means minimal security.
READ ALSO: How to Buy Physical Gold With a Gold IRA
Transaction Fees
Whenever you buy or sell assets in your gold IRA, you’ll incur transaction fees. These trading commissions and spreads apply to:
- Buying gold coins, bars, or gold-based ETFs or mutual funds
- Selling your existing gold holdings
- Executive IRA-to-IRA transfers or rollovers
Transaction fees vary based on:
- Type of transaction – Buys typically cost more than sales.
- Dollar amount – Fees are a % of the transaction value.
- Asset type – Coins have higher commissions than bars.
- Frequency of trading – Active traders get discounted rates.
- Channel – Online trades are cheaper than calling in.
- Price spreads – The difference between buy/sell prices.
Pay attention to any minimums per transaction as well. Trading fees on small gold purchases can eat into your investment if you’re not careful. Choosing lower commission gold coins like American Gold Eagles can save on fees.
Compare transaction fee schedules across various gold IRA companies. Look for discounted fees when conducting a high-dollar IRA rollover. Frequent traders should seek accounts with tiered commission rates.
Rollover Fees
To fund your gold IRA, you’ll likely need to move funds from an existing IRA or qualified retirement plan via a rollover. This process requires meticulous paperwork and compliance to avoid taxes or penalties.
Many gold IRA companies charge a fee specifically for processing rollovers. Common rollover fees range from $50 – $150 per transaction. Some companies don’t charge rollover fees at all.
Avoid companies charging excessively high rollover fees, as this is sometimes an area hidden fees lurk. However, recognize that properly executing rollovers requires administrative work and compliance checks. Make sure your provider can do rollovers correctly to avoid any costly hiccups.
You may be able to negotiate the rollover fee, especially if you’re transferring significant account balances. Larger rollovers will have bigger fee impacts, so compare rates across companies.
Shipping & Insurance
If you opt to take physical possession of your gold IRA holdings, you’ll need to pay metal shipping and insurance fees. These costs cover securely:
- Transporting metals from the vault to your home.
- Insuring all shipments.
- Returning your gold to the vault if needed.
Shipping fees vary based on:
- Delivery destination – Distance from vault to your house.
- Order size – Bulkier/heavier packages cost more.
- Speed – Faster shipping methods cost extra.
- Insurance limits – Higher coverage has higher fees.
- Carrier & mode – UPS, FedEx, Brinks, US Mail, etc.
For example, insured delivery of a $5,000 batch of coins across the country could cost around $150 roundtrip. Local armored car deliveries are cheaper. Receive firm shipping quotes before taking distributions.
Secure transport with full insurance coverage is essential when taking physical delivery. Don’t skimp and use carriers like USPS to save money. Paying top dollar for shipping and insurance gives real peace of mind.
Custodian Fees
All gold IRA accounts require an IRS-approved custodian to hold assets and ensure IRS compliance. This third-party custodian will charge an annual custodial fee.
Custodian fees often range from $75 – $300 per year. The custodian does important work behind the scenes to:
- Provide IRS reporting.
- Interface with depositories.
- Settle transactions.
- Facilitate audits.
- File paperwork.
Larger custodians that custody more assets can afford to charge at the lower end of the range. Make sure your custodian fee seems reasonable for the level of service provided.
Some gold IRA companies act as both the brokerage and custodian. Others partner with third-party custodians like Equity Institutional. Feel free to ask who the custodian will be and their related qualifications and fee.
Additional Gold IRA Fees to Watch For
Aside from the main fees we’ve covered already, a few other peripheral fees could come into play with some gold IRA providers. Keep an eye out for:
- Account termination fees – Charges for closing an account.
- Inactivity fees – Penalties for having idle accounts.
- Wire transfer fees – For sending IRA funds electronically.
- Overnight shipping fees – For expedited document mailing.
- Return item fees – Assessed for bounced checks or failed delivery attempts.
- Re-registration fees – For transferring gold ownership from one IRA account to another.
- Cycle fees – Strange hidden fees on a quarterly or annual basis.
Most reputable gold IRA companies won’t nickel and dime you with obscure fees like these. But it pays to scan the fine print for any surprises. Ask providers to explain all account-related fees in full.
READ ALSO: 10 Best Gold and Silver Coins for Investment
Tips for Minimizing Gold IRA Fees
While fees are unavoidable with gold IRAs, you can take steps to reduce costs:
- Shop around – Compare fee structures across several highly-rated companies.
- Ask for discounts – See if you qualify for lower fees due to age, account value, etc.
- Rollover large balances – Larger accounts can qualify for discounted rates.
- Choose gold ETFs – Opt for Paper Gold over physical metal to save on storage.
- Buy larger bars – The bigger the bar, the lower the storage fees per ounce.
- Take delivery sparingly – Limit shipments to avoid excessive shipping costs over time.
- Stay active – Idle account fees can be avoided by regular trading.
- Pay setup fees over time – See if you can finance the initial setup fee across a few years.
- Meet minimums – Some fees only apply if you fall below certain thresholds.
- Pay annually – Opt to pay storage fees annually instead of more frequently.
With some smart planning and fee negotiations, you can reduce the bite gold IRA fees take out of your investment returns.
What is a Good IRA Management Fee?
When evaluating annual IRA management fees, a “good” rate is highly subjective. It depends on your account size, preferred services, investing strategy, and more.
That said, here are some general benchmarks for reasonable gold IRA management fees:
- Under $20,000 account – Look for a maximum 1.25% fee.
- $20,000 – $50,000 account – Maximum 1.00% is decent.
- $50,000 – $100,000 account – Shoot for 0.75% or less.
- $100,000+ account – Target around 0.50% annual fee as the ceiling.
- $500,000+ account – Big accounts should be able to negotiate under 0.25%.
Compare any quoted annual fees to these rough guides. If you’re being charged 1%+ on a sizable six-figure account, you may want to keep shopping around.
Also, consider the level of service – higher-touch guidance and account management warrant a higher fee. But anything over 1.25% annually requires some serious extra value.
You can always call and try to negotiate a lower management fee after the first year if you feel you’re overpaying. As your balance grows, push for reduced rates. Don’t be afraid to move your IRA if you find significantly lower fees elsewhere.
Traditional & Roth IRA Fees Compared
Both traditional and Roth IRAs can hold precious metals, allowing you to open either type of gold IRA account. But are the fees any different between traditional vs Roth accounts?
In most cases, gold IRA providers charge the same fees for traditional and Roth accounts. This includes setup, administration, storage and other account-related fees. The costs are based on factors like:
- Account value
- Physical gold vs ETF holdings
- Level of service
- Account activity
Not the tax structure of the account.
However, here are a couple of important differences between traditional vs Roth IRA fees to note:
Contribution limits
- For 2023, you can contribute up to $6,500 to a Roth IRA per year ($7,500 if over 50). Traditional IRAs limits depend on your income and workplace plan eligibility.
- Higher Roth contribution limits mean more assets in the account, potentially qualifying you for lower % fee tiers.
Required minimum distributions (RMDs)
- Traditional IRAs have mandated RMDs starting at age 72 to avoid penalties. Roths have no RMDs.
- RMDs force you to liquidate IRA assets each year. This can mean realizing more transaction fees and distribution taxes annually.
Aside from these points, either traditional or Roth IRAs can be smart options for gold investing. The account fees charged by gold IRA providers will generally be identical for both structures.
Focus more on picking the right company, maximizing account value, and minimizing fees through negotiations. The traditional vs Roth decision can be made separately based on your current vs future tax situations.
IRA Management Fees Comparison
Gold IRA management fees can vary widely from one provider to another. Comparing fees across several top-rated companies can help you identify the most cost-effective option.
Here’s an overview of average annual management fees charged by some leading gold IRA providers:
- Augusta Precious Metals – $150 annually
- Birch Gold Group – $225 – $275 annually
- Noble Gold – $225 annually
- Oxford Gold Group – $275 – $325 annually
- Advantage Gold – 0.65% of account value
- Goldco – $80 – $100 for <$25k, 0.17% – 0.23% above
- Lear Capital – $215 annually
- Patriot Gold Group – $75 – $275 annually
As you can see, annual fees can range from a flat rate as low as $75 per year to over 1% of total assets. The fee structure also differs – some companies charge flat rate fees based on account size, while others use a % of assets.
In addition to the annual fee, look at each company’s upfront setup fees, storage costs, and transaction commissions. Taking everything into account provides an apples-to-apples comparison.
Aim to keep total gold IRA fees under 1% annually unless you are receiving premium white-glove service and guidance. Shop around and use fee data like this to find the best rate.
To Recap: Choosing a Low-Fee Gold IRA Provider
Opening a gold IRA provides powerful diversification for your nest egg. But it also introduces new account fees you’ll want to minimize.
By understanding the typical gold IRA fees – like setup, annual, storage, and transaction fees – you can budget accordingly. Use the fee data provided in this guide to compare rates across several leading gold IRA companies.
Favor providers with:
- Low (or no) account setup fees
- Competitive annual management fees given your account size
- Reasonable gold storage fees if investing in physical metals
- Discounted fees for higher account balances
- Low trading commissions and spreads
Take time to thoroughly evaluate and compare gold IRA fee structures. And don’t be shy about negotiating fees with any provider after your account is open. Keeping costs low ensures more of your investment goes toward building future wealth. With the right gold IRA provider, you can grow your nest egg efficiently with minimal fees.
Frequently Asked Questions
What are typical IRA fees?
Typical IRA fees include:
- Account setup fees ($0 – $300)
- Annual maintenance fees ($50 – $300)
- Administration fees (0% – 1% of assets)
- Investment transaction fees ($5 – $50 per trade)
- Rollover fees ($0 – $150 per transfer)
Total IRA fees average from 1% – 2% annually for most providers. IRAs with low activity may have minimum fees around $50 per year. Larger accounts can often negotiate fees under 1% through volume discounts.
What is the average IRA management fee?
The average IRA management fee is around 1% of total assets under management annually. However, fees can range from 0.25% up to over 2% with some providers.
Larger IRAs over $100k should expect to pay 0.5% – 0.75% on average. Accounts under $50k will see average fees of around 1% – 1.5%.
The more assets you have, the lower your percentage fee should be through negotiated volume discounts.
Are IRA fees tax deductible?
No, you cannot claim a tax deduction for any IRA fees paid. IRA fees are operating expenses that come out of your account directly.
However, since IRA contributions are made with pre-tax dollars, paying fees in a traditional IRA lowers your future taxable balance at withdrawal. This provides a modest tax benefit for IRA fees paid over the years.
Can you reimburse yourself for IRA fees?
You cannot directly reimburse yourself from your IRA for fees paid to the account provider. IRA fees must be paid from the account itself.
However, you can effectively reimburse yourself by contributing more to the IRA that year to make up for the fees paid. Just be sure to stay within your annual contribution limits when doing so.
What IRA fees can be avoided?
You can avoid, reduce, or eliminate certain IRA fees by:
- Selecting an IRA provider with no setup fees
- Negotiating lower asset-based management fees
- Choosing an IRA with no idle account/inactivity fees
- Minimizing transactions to reduce trading commissions
- Rolling overbalances directly to avoid custodian-to-custodian transfer fees
- Consolidating multiple IRAs to reduce total fees paid
- Using no-fee ETFs and mutual funds in your IRA
- Paying annual fees instead of quarterly to reduce total costs
With some proactive planning and fee negotiations, you can avoid unnecessary IRA fees creeping into your retirement accounts.
Do all IRA providers charge fees?
Nearly all IRA providers charge some fees, as they have administrative costs associated with maintaining IRAs. However, some online discount brokers offer IRAs with no annual fees.
Robo advisors like Betterment and Wealthfront also offer zero-fee IRAs if you use their investment recommendations. Credit unions and community banks sometimes have annual fee-free IRAs as well.
You can find $0 annual fee IRA options, but they likely charge fees for transactions, rollovers, and other actions. It pays to run all the numbers to calculate total costs. An IRA with a modest annual fee but lower transaction costs could be cheaper long-term.
Can you have an IRA with no fees?
It is possible to have an IRA with zero fees, but you’ll need to research no-fee providers carefully. Some possibilities for opening a fee-free IRA include:
- Online discount brokers like E*Trade, TD Ameritrade, or Charles Schwab.
- Robo advisors like Betterment and Wealthfront.
- Your employer’s workplace retirement plan if it allows IRAs.
- Your local credit union or community bank.
- Sticking to no-transaction-fee funds.
Even with a “no fee” IRA, you may still pay indirect mutual fund expense ratios. And you’ll miss out on human advisor guidance. But with the right provider, an IRA with no admin or transaction fees is doable.
What is the cheapest IRA provider?
Some of the cheapest IRA providers include:
- Fidelity – $0 account fees, over 3,400 no-fee mutual funds.
- Vanguard – No account service fees, extensive selection of low-cost index funds.
- Schwab – $0 account fees, commission-free ETFs, and no-fee proprietary funds.
- Betterment – No account fees, 0.25% annual advisory fee, minimum $0 portfolio.
- Wealthfront – No account fees, 0.25% advisory fee, minimum $500 portfolio.
- TD Ameritrade – $0 account fees, commission-free ETFs, no inactivity fees.
The cheapest IRA overall will depend on your investment strategy and activity. Aim for $0 account fees, access to no-fee funds, and low management expenses.
How much should an IRA cost?
A reasonable IRA should cost between 0.50% – 1.50% of assets annually in total fees, depending on the account size and services provided.
Good guidelines based on account size:
- Under $10,000 – Around $50-$75 per year
- $10k – $50k – Up to 1.00% annually
- $50k – $100k – Approx. 0.75% annually
- $100k+ – No more than 0.50% annually
Services like dedicated advisors, tax planning, and rebalancing warrant slightly higher fees. But overall, keep IRAs affordable by minimizing fees through no-fee providers.
Can an IRA have fees over 1%?
Yes, some IRA providers charge total fees well over 1% annually. Small IRAs under $10k could see fees approaching 2% – 3% in some cases.
However, a good rule of thumb is to keep IRA fees under 1% whenever possible. Paying over 1% annually eats significantly into long-term investment gains.
If your IRA fees exceed 1% annually, consider these steps to reduce costs:
- Transfer to a low-cost provider such as Vanguard, Fidelity, or Charles Schwab that offer lower expense ratios.
- Consolidate multiple IRAs into a single account to simplify and reduce total fees.
- Shift to index funds and ETFs over more expensive actively managed mutual funds.
- Negotiate lower asset-based advisory fees as your account balance grows. Larger accounts can often qualify for fee breaks.
- Adjust your investment strategy to require less active trading and advisor guidance, which incurs higher transaction fees and service charges.
- Opt for online advisory management instead of a dedicated human advisor to eliminate large advisory fees. Robo advisor services tend to cost less.
The key is shopping around for lower-cost providers, minimizing unnecessary services, and negotiating fees whenever possible. With some diligent comparisons and proactive cost adjustments, IRA fees exceeding 1% annually can likely be reduced through prudent account management.
In another related article, How to Choose the Best Gold IRA Company for Your Needs
