Choosing a Depository for Your Precious Metals IRA Investments

Estimated reading time: 2 minutes

The IRS requires all physical metals invested with a self-directed IRA (SDIRA) be securely stored in an approved metals depository or vault for safe keeping. Taking physical possession of precious metals held by your IRA is not allowed by the IRS until you take a distribution.

It Should Be Your Choice

Being able to choose your own dealer and precious metals depository is very important. Some self-directed administrators limit your options. Make sure to do your due diligence on any dealer, depository, and IRA administrator you are considering to ensure they meet your investment needs.

Entrust clients have the ability to choose not only the precious metals dealer and the type of metals they want to invest in, but also the storage facility where their metals will be secured. Investors purchasing precious metals through their IRAs also have the option to store the metals not just domestically, but also offshore.

Types of Depositories

There are two ways metals can be stored at depositories, allocated or segregated.

Allocated storage, also known as non-segregated or co-mingled storage, involves co-mingling the metals with assets owned by other investors. Accountholders are assured of receiving metals of the same types, weights, and years/hallmarks as their original deposits, though may not receive the exact metals they deposited. This type of storage is more convenient for the depository and generally incurs lower costs.

On the other hand, segregated storage refers to keeping metals separated from those owned by other investors. While this option generally comes with higher costs, accountholders are guaranteed to receive the exact metals they originally deposited.

Fees vary by depository and it is important to do your due diligence to compare. From a budget standpoint, investors should remember that the annual depository fees need to be paid from your self-directed IRA funds. These charges cannot be paid personally.

Choosing the Precious Metals Investment

Once you choose your precious metal dealer and depository, the next step is deciding your precious metal investment. Entrust (or your current administrator/custodian) will then send the funds to the dealer to purchase the metals in the name of your IRA with the depository shipping instructions.

Your dealer will then ship the precious metals to the depository for safekeeping. Your Precious Metal IRA account value is updated regularly, and if you are an Entrust client, you can access this information anytime, online.

If you want to sell your precious metals, the process is very similar. You identify a dealer to purchase your precious metal(s), instruct Entrust (administrator) to sell them and request their shipment from the depository to that dealer. The profits are then returned to your self-directed IRA.

We Make It Easy

As the nation's leading administrator of self-directed retirement plans, Entrust is equipped to handle the unique requirements involved with holding precious metals in your IRA—from arranging for storage with the depository of your choice and providing valuations for IRS reporting, to recordkeeping and administration.

Talk to us today to discuss your options for a Precious Metals IRA.