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Let’s face it:
With our national debt soaring to unsustainable levels and shutdowns looming around every corner, many people are scared that the U.S. government will destroy their retirement savings with bad financial policies and political in-fighting.
And with inflation on the rise, who knows what things will cost in the future?
At our current pace, prices will double every ten years, effectively cutting the value of your investment portfolio in half.
With so much uncertainty, many are turning to precious metals to protect their retirement savings.
Unlike stocks, bonds, and mutual funds that take a beating during times of rising inflation, gold prices tend to outpace it – making it an excellent hedge to protect the value of your portfolio.
But people still have a lot of questions when it comes to buying this metal, particularly with an individual retirement account.
One of the most common is, how much do you need to open a gold IRA? What is the minimum deposit requirement?
And that’s exactly what we’ll answer today.
Specifically, we’ll look at the highest, the lowest, and the average among the top gold IRA companies.
We’ll also address how gold IRA fees can affect your annual returns depending on your account size and look at some essential questions to ask yourself when entering this territory.
What Is a Gold IRA?
A gold IRA differs from a traditional IRA because, with this account, you can hold IRS-approved physical gold, silver, platinum, and palladium metals.
However, you can’t open this retirement account with a traditional IRA custodian, like a broker.
Instead, you have to work with a self-directed custodian who specializes in handling all the required IRS paperwork and the actual storage of your precious metals.
For this reason, gold IRAs tend to have higher fees than traditional IRA accounts that only contain paper assets, like stocks, bonds, and mutual funds.
Precious Metal Dealer vs Gold IRA Firm
When buying physical metals, you have two options – a precious metals dealer or a gold IRA company.
What is the difference though? Let’s discuss it.
Precious Metal Dealers
While generally they are safe to buy from, gold dealers are transactionally based.
They focus on making the sale rather than developing a long-term relationship with you. As a result, most sell strictly online and provide minimal customer service.
And when opening an IRA account, they provide almost no assistance other than referring you to some custodians.
So this is entirely your responsibility, you have to handle funding it, including any rollovers, and select an IRS-approved depository.
You will also need to be sure that any precious metals you buy meet purity standards set by the Internal Revenue Service.
(Which you can see in the graph below, by the way.)
With their no-frills approach, precious metal dealers may be a good choice for experienced investors that already have an individual retirement account and are looking for convenience and competitive pricing.
Gold IRA Firms
On the other hand, gold IRA companies focus on providing excellent customer service rather than just making a sale.
For example, they offer extensive educational guides and videos to help customers understand the pros and cons of investing in physical gold before they they actually go this route.
And when you’re ready to get started, they’re with you every step of the way.
These firms provide assistance with opening your account, funding and rollovers, selecting a depository, and ensuring that the all the precious metals you buy meet IRS eligibility.
Minimum Investments Requirements
Now, back to the main question at hand:
What is the minimum investment for Gold IRAs?
Regarding these retirement accounts, it’s worth noting that it’s not the IRS, but the company that sets its own limits, ranging from $0 to $50,000.
However, having a lower minimum deposit amount isn’t necessarily a benefit.
Due to the higher fees associated with gold IRAs, investing in small amounts of precious metals may end up costing you money.
(A bit further on, we’ll address how these fees can affect your annual returns.)
Who Offers the Lowest Initial Contribution Amount?
When it comes to the lowest minimum investment, American Hartford Group Gold is the clear winner.
Headquartered in Los Angeles, California, AHGG doesn’t have a minimum initial contribution amount, which you can also find on their FAQ page.
You can also set up a monthly investment plan for as little as $100 with no additional fees or service charges.
The straightforward website design, competitive pricing, and a 100% customer satisfaction guarantee makes American Hartford Group Gold a good choice for new investors.
(However, keep in mind that they mostly focus on gold and silver metals only, with very limited platinum and palladium options.)
Who Has the Highest Gold IRA Minimum Investment?
This would be Augusta Precious Metals, which is the country’s largest and most reputable gold IRA company.
Based out of Casper, Wyoming, they have won numerous awards for their excellent customer service.
APM’s minimum investment is $50,000 with lifetime support.
(However, a higher minimum order amount can be a benefit for you, as you’ll soon see later in the post.)
As part of their commitment to excellence, every new customer receives a one-on-one web conference call with a specialist.
They will take the time to explain the pros and cons of a gold retirement account, answer all your questions, and help you decide whether this option makes sense for you based on your financial condition.
Augusta is an excellent choice for investors who aren’t sure if a gold IRA makes sense for them and want straightforward answers without any pressure to buy.
What is the Average Minimum Investment for a Gold IRA?
When looking at the overall market, most gold IRA companies require a minimum investment of either $10,000 or $25,000.
Let’s look at some of the better-known firms.
Goldco’s minimum order amount is $25,000.
This firm is known for its excellent customer service. In addition, it has an A+ rating from the Better Business Bureau and over 1500 5-star customer reviews.
Overall, a very strong competitor to Augusta.
Birch Gold Group
Birch Gold’s minimum investment is $10,000.
This company has been in business since 2003 and has helped over 13,000 customers, maintaining an A+ rating with the Better Business Bureau.
They are known for their excellent selection of gold and silver products.
While their setup costs can be around $300, the Birch Group will waive these fees if your deposit is more than $50,000.
Patriot Gold Group
Patriot Gold Group has a minimum investment requirement is $25,000.
If you happen to make an initial investment of $100,000, you qualify for their No Fee for Life IRA (meaning you wouldn’t have to pay yearly fees for rollovers, storage, and insurance).
PGG has been in business for more than 30 years. However, they only offer gold and silver bullion and have limited products available for purchase.
Noble Gold Investments
Noble Gold requires a minimum of $20,000 for both cash purchases and gold IRA account.
(However, they can go a bit lower in some cases.)
You might consider them if you’re interested in great coin selection.
This company is known for having some of the lowest prices in the industry and offers a buy-back program to all its customers.
Advantage Gold’s minimum investment is $25,000.
They’ll waive your first-year IRA fees for initial investments of $50,000 or more.
They have a lot of positive reviews on their website; however, it’s difficult to find any third-party reviews.
Gold IRA Fees & Costs
Here’s the thing:
When opening this type of retirement account, you will typically incur a set-up fee ranging from $50 to $300, depending on the firm.
In addition, you will also have annual custodian and storage fees. Though the actual costs depend on each company’s policies, the average yearly number will run between $200 to $400.
Some of those may waive these fees depending on your initial contribution amount.
How Do Gold IRA Fees Affect My Returns?
Let’s examine how gold IRA fees affect your returns based on your account size.
First, according to statista.com, gold has had an average annual return of 7.8% from January 1971 through December 2022.
And as we saw above, annual fees can run between $200 to $400.
So for this example, we’ll use the lower amount – $200 a year.
On a $2000 account, these fees represent 10% of your account per year. So you would lose money each year by holding a small amount of gold in your IRA.
On a $5000 account, they represent 4%, cutting your gold returns in half.
A $10,000 account will run you 2% per year, manageable but still higher than most stock index funds or ETFs.
However, once you reach $25,000, they only represent 0.8% of your account.
And at $50,000 (as seen with Augusta), your fees would only account for 0.4% of your account value, making a larger investment better for your overall returns.
Clearly, the annual fees can dramatically affect your gold returns, especially on smaller accounts.
For this reason, if you plan to buy small quantities precious metals, it is best to do it outside of an individual retirement account, using dealers like JM Bullion, Hard Assets Alliance, or APMEX.
Now, we’d like to hear from YOU:
What do you think about these minimum investment amounts for gold IRAs? Given all this information, who would you invest with?
Let us know your thoughts in the comments below!