Precious Metals Custodians: What They Do
A precious metals custodian is the IRS-qualified trustee that legally holds a self-directed IRA, processes money coming in and going out, pays for metal on your instructions, arranges storage with a depository, and handles the account's tax reporting. It does not choose your metals or give advice. Every IRA that holds physical bullion needs one, and its fees are a recurring cost of ownership.
Who Is Allowed to Be a Custodian
IRS Publication 590-A states that the trustee or custodian of an IRA must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian. That last category refers to nonbank trustees, which must apply to the IRS and show they meet requirements on net worth, fiduciary experience, recordkeeping, and audits. The IRS periodically publishes a list of approved nonbank trustees.
Many self-directed custodians that handle precious metals are either trust companies chartered by a state or IRS-approved nonbank trustees. Asking a custodian which category it falls into, and which regulator oversees it, is a reasonable first question. Read our overview of self-directed IRA basics for how this fits together.
What a Custodian Does Day to Day
- Account setup: collects your application, identity documents, and beneficiary designations.
- Funding: requests transfers from your old provider, accepts rollovers and contributions, and checks them against IRS rules.
- Purchases and sales: pays the dealer when you sign a buy direction, and receives proceeds when you sell.
- Storage coordination: contracts with one or more depositories and records what is held for your account. See depositories explained.
- Reporting: sends statements, files Form 5498 with the IRS each year, and issues Form 1099-R for distributions.
- Distributions: processes cash withdrawals and in-kind shipments of metal, and handles required minimum distributions once required by IRS rules.
What a Custodian Does Not Do
Custodian agreements typically state that the custodian does not recommend products, vet dealers, review prices, or give tax or legal advice. If you overpay for a coin, the custodian will usually still process the purchase as long as the product is eligible. That is why the choice of precious metals company, and your own review of prices, matters as much as the choice of custodian.
How Custodian Fees Are Structured
Custodian costs usually fall into a few buckets: a one-time setup fee, an annual administration or maintenance fee, transaction fees for buying, selling, or wiring money, and storage fees that the custodian collects on behalf of the depository. Some custodians charge flat annual amounts; others scale fees by account value. Flat fees tend to be relatively cheaper for larger accounts, while value-based fees can be relatively cheaper for smaller ones.
As an example of how these items are presented, here is Goldco's published fee statement:
Gold IRA Fees
The required minimum purchase at Goldco to start a gold IRA is $25,000. Goldco’s preferred Custodian charges a flat annual account service fee which includes a one-time IRA account set-up fee of $50. as well as a $30 wire fee. Annual maintenance is $100, and storage is $150 for segregated storage or $100 for non-segregated storage.
Fees for gold storage and custodianship can vary depending on the company you select to handle these services (required by the IRS, as all IRA assets must be managed by a custodian). Depending on the Custodian, storage fees can range from $10 to $60 per month, or as a percentage of assets, from 0.35% to 1% annually.
When reading Goldco's published fee statement above, or any other company's, check which fees are the custodian's, which are the depository's, and which belong to the precious metals company itself. Ask whether any are waived, for how long, and what happens afterward. Our page on precious metals IRA fees explains each fee type in plain terms.
How to Evaluate a Custodian
- Regulatory status. Is it a bank, a state-chartered trust company, or an IRS-approved nonbank trustee? Who examines it?
- Experience with metals. How many precious metals accounts does it administer, and which depositories does it use?
- Fee schedule. Get the full schedule in writing, including transfer-out and account closing fees.
- Statements and online access. How often are statements issued, and how are metals valued on them?
- Speed of processing. How long do purchase directions, sales, and distributions usually take?
- Complaint history. Search the CFPB complaint database and the custodian's Better Business Bureau profile, and read how complaints were resolved.
- Exit terms. How easy is it to move the account to another custodian later, in cash or in kind?
Our guide to verifying a precious metals dealer uses a similar approach for the company selling the metal.
How Dealers and Custodians Work Together
Many people never shop for a custodian separately. Precious metals companies usually have custodians they work with regularly and provide their paperwork. That can simplify setup, but you are still free to ask about alternatives. Goldco says it works with all major self-directed IRA custodians, and its FAQ references Equity Trust statements. Our page on Goldco storage and custodian partners describes that relationship and what to confirm.
Changing Custodians Later
You can generally move a precious metals IRA to a different custodian through a trustee-to-trustee transfer. The metal may move in kind between depositories, or be sold and transferred as cash. Expect a transfer-out or closing fee from the old custodian, and confirm that the new one accepts every product you hold. The process is described in trustee-to-trustee transfers explained.
Frequently Asked Questions
Is the custodian the same company that stores the gold?
Usually not. The custodian administers the account and contracts with a separate depository that physically stores the metal.
Does FDIC insurance cover metals held by a custodian?
No. FDIC deposit insurance covers deposits at insured banks, not physical metals. Stored metal is typically covered by the depository's own insurance.
What if a custodian goes out of business?
IRA assets are held for the account owner, not as the custodian's property, and accounts are typically moved to a successor custodian. Ask a custodian how it handles this.