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If you're getting increasingly concerned that all of your retirement funds are invested in the stock market, you're not alone. Many individuals have decided to diversify their investment portfolio by putting a portion of their funds into alternative assets, such as precious metals. When your investment portfolio is diversified, it provides you with greater protection against market downturns and crashes.
If you've started looking into opening a Gold IRA, also called a Precious Metals IRA, you may have heard that the coins and bars you hold in your account are required to be stored in an IRA approved depository. If you'd like to learn more about this requirement, as well as some of the top IRA approved depositories available to choose from, continue reading.
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What is an IRA Approved Depository?
Before we get into our list of the various IRA-approved depositories, let's take a small step back and discuss what an IRA-approved depository is. IRA-approved depositories provide individuals with a highly secure storage location for assets. Depositories that are designated as IRA-approved have been specifically selected by the IRS as a secure location where individuals can have their IRA metals stored.
Storing your precious metals in an IRA-approved depository comes with a wide range of benefits. These storage facilities are known for their state-of-the-art security measures, which can help you rest easy knowing that your investment will be ready and waiting for you when you retire. While there are a few differences between the various IRA approved depositories, there are also some common features. These include heavy-duty building material to ensure a secure facility, constant monitoring of the facility, armed guards securing the premises, and a full coverage insurance policy to protect your investment.
Do You Have to Store Your Precious Metals in an IRA-Approved Depository?
Many individuals who start the process of opening a Gold IRA assume that they'll be able to store their precious metals in their home or a safety deposit box at their local bank. However, this is not the case. IRS regulations state that the precious metals for an IRA must be stored in an approved depository.
If you take possession of your precious metals before reaching the IRS-approved retirement age of 59.5, you'll actually face penalties and fees. There are very few exceptions to this rule, so if you see any Gold IRA companies advertising home storage, it should be a big red flag that they may not be the most reputable company to work with.
Gold IRA Approved Depositories
As we shared above, you can choose just any storage facility for your precious metals. They must be held in an IRA-approved facility. Below are several depositories that meet the requirements of the IRS in regards to record-keeping, management, vault security, and other measure. These are all viable options for you to consider when storing your precious metals.
The Delaware Depository is one of the most trusted storage facilities. As you can probably guess by its name, the Delaware Depository is located in Delaware, but there is an additional location that recently opened in Nevada. Both of these depository locations are easy to get to, without being too close to political or financial centers that could jeopardize your holdings.
Licensed by the ICE Futures US and CME Group (NYMEX and COMEX), the Delaware Depository is well-known for the security measures they employ to protect the precious metals of their clients. Some of these security measures includes dual control access regulations and automatic time locks for the vaults, digital recordings.
In addition to these high-tech security measures, a $1 billion full-coverage insurance policy from Lloyd's of London offers additional protection for your precious metals held in the Delaware Depository. This policy offers protection against theft, damage, or loss.
With both non-segregated and segregated storage options, the Delaware Depository offers different options to match each client's budgets and storage preferences.
Brink's Global Services
Chances are you're already familiar with Brink's Global Services. Their armored cars are seen all over transporting valuables. What you may not know, however, is that they Brink's also offers highly secure storage facilities for precious metals. Brink's Global Services' facilities offer technologically advanced security to protect the precious metals of their clients.
You will have the option to choose either co-mingled or segregated storage, based on your budget and preferences. If you choose segregated storage, your precious metals will have their own dedicated personal storage location. Your metals will not be mixed with those of other investors, ensuring that you retain the exact coins and bars that you started with.
Co-mingled, or non-segregated storage, is the other option offered by Brink's. With co-mingled storage, your coins and bars are stored in the same area as those of other investors. While you are guaranteed to receive the same type of coin or bar that you started with, it may not be the exact same item.
Regardless of which storage option you choose, you can rest easy knowing that your investment is secure.
International Depository Services
International Depository Services, or IDS, offers two depository locations that are approved by the IRS to hold precious metals for an IRA. These locations are in Delaware and Texas.
IDS employs a wide range of first-class security measures to protect the investments of their clients. The class 3 gold vaults that will hold your precious metals have been rated as the most secure based on testing conducted by the Underwriters Laboratories (UL). Beyond the highly secure vaults, all IDS locations also feature off-site security specialists that monitory the property along with 24/7 video monitoring.
The company mandates that at least two employees are present whenever precious metals are being handled to reduce the risk of any suspicious behavior. Lloyd's of London has also underwritten a full-coverage insurance policy to protect your valuables against loss, theft, or damage.
JP Morgan Bank
JP Morgan Bank has been a well-known name in the financial industry for over 30 years. The company earned approval as a Gold IRA-approved depository in 2011.
JP Morgan Bank offers precious metals vaults in New York, London, and Singapore. These vaults offer the latest in security and innovation to protect the investment of each customer.
HSBC Bank U.S.A.
HSBC Bank U.S.A., which used to be called Hong Kong and Shanghai Bank, is another of the top names when it comes to storing precious metals for an IRA. The company is also well-known as one of the largest bullion clearance centers in the world. HSBC Bank U.S.A. has the largest commercial precious metals vault in the world. They are also the largest custodian for gold, silver, and other precious metals in the world.
A few of the other benefits of storing your precious metals with HSBC Bank U.S.A. include the company's 24-hour customer service representatives that will be able to help you day or night and their spot as one of the sixth-largest lenders and precious metals exchanges in the world.
ScotiaMocataa Depository is an offshore depository that has been approved for IRA storage. Located in Canada, and part of Scotiabank, this depository offers a viable option for those looking to store their precious metals for an IRA outside of the United States.
All precious metals store in the ScotiaMocatta Depository are protected by a $1 billion all-risk insurance policy underwritten by Lloyd's of London. This full-coverage insurance policy, combined with the security measures and technology utilized by the depository, should leave you feeling confident that your investment is secure.
CNT Depository, based in Bridgewater, Massachusetts, is an approved COMEX depository. The company has over three decades of experience in managing and storing precious metals.
CNT Depository is a Class III facility featuring a 20,000 square-foot vault. They are a trusted name in the industry and service many well-respected clients.
All precious metals held in the highly secure vault are further protected by a full-coverage insurance policy issued by Lloyd's of London.
Holding Precious Metals in a Retirement Account
Diversifying your portfolio by investing a portion of your funds in precious metals can offer protection against stock market volatility and economic downturns. Holding between 5 and 15% of your portfolio, depending on your specific situation, needs, and retirement goals, is a strategy that is recommended by several financial experts.
Physical gold, silver, and other precious metals offer a hedge against inflation as their value is not tied to the value of the dollar. When you're ready to retire and cash in your investment, precious metals are also easy to liquidate. These metals are highly sought after across the globe, so finding a buyer should not be complicated.
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