Silver IRAs are growing in popularity apace with the rising interest in and demand for silver. Even though these retirement accounts are an excellent way to pour retirement dollars into tangible silver coins and bars, they have costs to participate. As with any investment, the amounts of fees can determine whether it is a success or not. There are many different criteria by which you can judge the Silver IRA administrator you select, but an important one to think seriously about is the types of fees and charges that they collect. These types of IRAs can have even four or more different charges associated with them. The difference between one administrator’s fees and the next can vary widely. They also have different means of assessing fees and types of storage for you to consider the cost. These storage vault custodians who work hand and glove with your administrator have their own fees that will be passed on as well. This is why you need to carefully think about the particular commissions and fees when you are choosing your administrator and storage vault company.
Silver IRA Startup or Transfer Fees
The vast majority of the Silver IRA administrators charge fees for setting up the account and processing the paperwork. Even when you are transferring over an already existing traditional IRA account to a Silver IRA one, these fees typically apply. The purpose of the charges is to have your account ready to receive physical silver assets and other investments. Regal Assets is a leader in low cost Silver IRAs with extremely competitive fees, so they are a good company to use as a benchmark for these charges. While Regal advertises $100 for startup or transfer fees, they generally pick up these costs for new clients. Comparable administrators have fees in this category that run anywhere from $75 to $250 or more. These fees are difficult to avoid with new IRAs, except for in the case of Regal Assets.
Silver IRA Annual Account Maintenance Fees
A major area of expense with Silver IRAs is the annual account maintenance fee. Every one of these administrators charges this category of fee regardless of which company you select. With this fee, it can be a slippery slope if they charge percentage fees based on the size of your actual Silver IRA account. In the case of companies like Regal, it charges a flat $100 annual maintenance fee. Other companies are often charging scaling maintenance or management fees that can really add up if the account is a larger one and as its value increases. Consider the two ways of charging these fees and the difference they can make:
• Flat Rate Fees – treat every account holder the same and so are by nature more fair to the customer. With these fees, every account owner knows in advance what you will pay for the annual maintenance fees, setup and storage fees. These types of charges especially work to the advantage of those with larger accounts.
• Scaled Fees – heavily favor the Silver IRA custodians. By assessing flat percentages on every account holder’s assets which they maintain, the amount which they actually charge in maintenance fees can amount to hundreds and hundreds of dollars when the account values are larger. The simple way of looking at this is that you are penalized for having a higher asset value with the custodian, as they do not have more work associated with the statements on one account than another.
Silver IRA Annual Storage Fees
Annual storage fees are the other major component of charges that Silver IRA accounts incur. The administrators of the IRA account will typically pass this along from the third party vault storage firms. The idea is that you should obtain segregated storage for these fees that you pay, but the practice is that you often do not receive it from the vault custodian. Instead, many times they will put your tangible assets into common storage with the other account holders. Some companies may also attempt to charge sliding scale percentage fees that depend on the value in your Silver IRA. Regal Assets charges $150 for segregated storage which they guarantee will actually be segregated. Many of their competitors start these storage fees at $225 or higher. For this steeper price, you would expect to receive segregated storage from a major vault custodian like Delaware Depository or Brinks Company, but you often get non-segregated instead. It does make a difference to many investors whether they receive non-segregated or segregated storage for their physical silver.
• Non- Segregated or Allocated Storage – Non-segregated storage goes by many names, including co-mingled storage. Whatever you call it, this storage lumps together the silver holdings of many different clients into a main vault where they are kept in common. Some investors have concerns that if the vault custodian were to go bankrupt, their silver assets might be compromised or at least involved in distributions and court proceedings.
• Segregated Storage – Segregated storage is preferable in any case. Your silver coins and bars are individually maintained in their own special space, be it a locked mini vault or a safe deposit box. What helps investors to sleep at night with this storage is knowing that their own physical silver is kept completely separate from other individuals’ silver IRA possessions. When you have this form of storage, your administrator will be able to provide you with the serial numbers from your own silver bars. There are vault companies that make segregated storage their emphasis.
Other Kinds of Silver IRA Fees
It is common to have to pay Silver IRA fees for shipping and insurance costs on any silver bars and coins you buy in the account. It makes sense that every order which has to be shipped will come with these types of fees, since silver by nature is valuable and must be protected until it makes its journey from the place of purchase to the custodian vault. It is always preferable to get flat rate fees for shipping and insurance versus the scaling fees which go higher as the purchase amount is greater. You should ask your potential administrator about these charges before getting surprised by them after the fact.
Remember that these fees may not seem like much individually, but when you start adding them up they can be quite high. Because of this you should really take some time to inquire of the various custodians to know what their full charges are before you go with them. The combined transfer or startup fees, first year’s maintenance fees, and first year storage charges can easily run to $500 or more. Regal sets itself apart from the competition by charging $250 flat for these fees (as they are paying your transfer fees). You should not be deceived into fees that are unfair for your Silver IRA.