How to Vet Gold IRA and Gold Investment Companies
If you are trusting your hard earned investment or retirement funds with a bullion dealer, you want to make sure that firm is a trusted and reliable source. The investment firm should provide a physical office address (no PO box), email contact and phone number with office hours.
Questions to Consider Before Opening a Gold IRA:
- How long have the gold investment companies been in business?
- What is the gold investment company’s track record?
- Are there independent ratings/complaints?
- Are there alerts from consumer or government regulatory agencies about the firm?
- Are they based in a country that allows for legal action if necessary?
- Is withdrawal or sale easy?
5 Tips to Ensure a Your Gold IRA is a Smart Move:
- Avoid penalties and fees by not breaking IRS guidelines
- Do not purchase gold with less than 99.5% purity
- Hold your Gold IRA to maturity
- Make sure coins are minted at an authorized facility
- Use a custodian and storage facility you can trust
Fees for Buying and Selling Precious Metals:
As with any financial product purchase, you should know about any commissions, transaction fees or purchase premiums involved. These fees will vary from firm to firm and if are not stated on their website, you may have to ask their representative.
For the most part, lower premiums will be charged on larger bars compared to coins. Similarly, fees for selling your precious metals holdings would be lower compared to coins, etc.
There can be other costs when buying precious metals from investment companies, including ongoing management, storage, delivery, insurance, administration fees and even currency exchange. These fees vary from product and dealer and are often figured as a percentage of your precious metals account holdings.
Consult with your tax adviser, but any gains from your Gold IRAs could be taxed with capital gains or income tax like your other investments.
Storage fees differ on Gold IRAs as well and are based on the products you invest in. Vault or segregated storage will be more expensive and a preferred method by serious investors. Costs for pool allocated precious metals will be lower.
Some Internet Investment Gold providers are regulated but many are not and, in particular, are not regulated as investment services. This is often the case in new markets and means that investors need to take extra care in deciding which providers to use.
In many jurisdictions, customers of regulated investment services are protected by investor compensation schemes in case the investment firm fails to return the investor’s assets.10 Claims typically would arise if there is fraud or other administrative malpractice or when an investment firm is unable to fulfil its obligations as a result of operational errors.
However, even unregulated Internet Investment Gold providers may conform to voluntary standards, industry codes or sound practices. Gold providers that adhere to regulatory or voluntary
standards can provide additional safety in terms of both corporate governance and internal controls. Banks and payment service providers, for example, tend to implement ‘the four-eyes principal’ for activities that are considered sensitive. This means two people have to approve an action before it is taken, which can decrease the risk of operational errors or fraud.
Are the expenses other than that?
Ongoing fees are common with Internet Investment Gold products, comparable to management fees for investment funds. These fees, which are often charged every month, usually cover the costs of storage, insurance, and administration. They are usually computed as a percentage of the value of your gold holdings.
Storage costs vary depending on the product you choose. Pool-allocated gold products, in which bars or coins are assigned to a group of investors, typically have the lowest storage costs. Because they require more space and effort, segregated storage or safety deposit boxes in professional vaults are more expensive. Nonetheless, many investors favor this type of storage.
Other fees may apply to Internet Investment Gold products. Physical delivery is usually charged by providers, and currency exchange may also be charged.
Gains from Internet Investment Gold products are generally taxed in the same way that other investments are, so they may be subject to capital gains tax or income tax, for example.
Significantly, investment gold is exempt from VAT in many jurisdictions, with some exceptions. Before engaging in any transactions, you should check local taxation laws and consult with your tax advisor.
Gold is a one-of-a-kind investment asset, and Internet Investment Gold allows you to take advantage of many of its special features. However, Internet Investment Gold provides opportunities as well as risks, like any investment. As such, if any guaranteed or excessive returns or risks-free capital preservation are pledged, you should seek impartial information on the potential performance and be skeptical. You should also make sure that this investment type and amount is appropriate for your specific goals and risk tolerance.