How to compare gold IRA companies

Once you've decided to add gold to your portfolio, you'll need to figure out how exactly you plan to invest.

Gold can make a solid investment option, thanks to its use as a portfolio diversifier, its long-term stability amid fluctuations in other markets and its reputation as a hedge against inflation. If you're buying into gold as an addition to your retirement plan and interested in gold bars and coins, you may decide to invest in the precious metal using a gold IRA. 

But gold IRAs can have strict rules and requirements to meet IRS standards — which is why many investors may decide to work with a gold IRA company through the process. To decide if this is the right path for you, it helps to know what services these companies provide and what to look for when you compare them.

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How to compare gold IRA companies

Adding any new asset to your investment plan takes some research and planning. 

When you work with a gold investment company, you'll want to make sure the company is legitimate and trustworthy. Look for customer reviews online and avoid any unusual websites making any grand promises about your potential returns or using high-pressure sales tactics. Don't hesitate to also consult a trusted expert, like a financial advisor, for individual advice about how you can add gold (or any new asset) to your financial plan. 

Here are a few more things to look for when you're comparing a gold investment company for your gold IRA.

Buying your gold

First thing's first: If you're buying gold for a gold IRA, you should make sure it's IRA-eligible gold. As opposed to gold collectibles, this gold bullion meets IRS requirements for weight and purity. There are specific gold bars and coins that you can fund your gold IRA with to qualify, which you should make sure you can access through the gold investment company you choose.

On top of this, make sure you know the requirements the gold IRA company may have for making your gold purchase. Many companies require a minimum purchase order and may also have an ongoing account minimum. This can be as high as $10,000 to $25,000. If you're not able to meet the minimum without going over the recommended 5% to 10% portfolio max, you may want to look elsewhere.

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Costs and fees

Fees can make a big difference in the cost of your gold investment.

First, look into what it will cost to actually buy your gold. You should expect some type of markup over the current spot price, but some may charge more than others. 

Then, there may be a range of fees to be aware of. One-time account setup, annual or monthly account management and storage fees are all common. Make sure you compare these fees between different companies, since they can affect the overall value you get from your gold investment in the long run. 

You may find some offers for first-year discounts or fee waivers. When you're comparing, it can be useful to only make comparisons using what you'll actually pay once the introductory period ends, for a better understanding of your total price.

Storage

The IRS not only has restrictions on the type of gold you may store in your gold IRA but the agency also requires you to keep your IRA with an approved institution, which includes eligible nonbank custodians.

Keeping your gold with a custodian will often mean you incur additional storage and insurance costs.

Any gold IRA company you choose should be able to help you set up your IRA with an approved custodian, but the options may differ. Some partner with multiple IRA custodians, while others may offer only one custodian option. It may be worth choosing a company with multiple available custodians so you can compare your individual costs with each.

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The bottom line

Buying into a gold IRA can help you set aside the precious metal for your retirement. But if you decide to work with a gold IRA company — a common way to set up and invest in a gold IRA — it can pay to do your own research beforehand. You'll always want to look for customer reviews and reputation of the company, but details about how you buy your gold, fees and storage options can all be important factors, too.

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