Precious Metals Depositories Explained
A precious metals depository is a high-security vault that physically stores bullion on behalf of IRA custodians and other owners. The custodian chooses which depositories it works with, the depository receives and records your metal, insures it, undergoes regular audits, and releases it only on the custodian's instructions. You cannot keep IRA metal at home, so the depository is where it lives for as long as the account owns it.
Why IRA Metal Has to Be in a Depository
The bullion exception in Internal Revenue Code section 408(m)(3) requires that eligible metal be in the physical possession of the IRA's trustee. Custodians meet that requirement by contracting with professional storage facilities. If you take the metal yourself, it can be treated as distributed, which is explained on our page about home storage risks. The full statute is available from Cornell's Legal Information Institute.
Who "Approves" a Depository
There is no single government list of approved IRA depositories. Instead, each custodian decides which facilities it will use, based on security, insurance, audit practices, and reporting systems. Some depositories are also accredited by futures exchanges to store metal for delivery against contracts, which involves its own standards. When a company says a depository is "approved," ask: approved by whom, and for what?
Many custodians offer more than one location, sometimes in different states or countries. A location closer to you may matter if you ever plan to take metal in kind, because shipping costs and timing can differ.
How Your Metal Is Logged
When a dealer ships metal for your account, the depository typically:
- Receives the sealed, insured shipment and checks it against the custodian's expected delivery.
- Counts and inspects each item, and records product type, weight, quantity, and serial numbers for bars.
- Assigns the holding to your account, either in a segregated space under your name or in a pooled inventory of identical products.
- Confirms receipt to the custodian, which then shows the metal on your statement.
The difference between segregated and pooled storage determines whether you get back the exact items you bought. See segregated vs non-segregated storage.
Insurance on Stored Metal
Depositories typically carry insurance covering the metal in their custody against theft, loss, and damage, often through specialty insurers. This is not the same as FDIC insurance, which covers bank deposits only, as the FDIC explains. Useful questions include:
- Who is the insurer, and what is the total coverage limit?
- Is coverage based on full replacement value at current prices?
- Are there exclusions, and how would a claim be paid to an IRA?
- Does coverage include metal while in transit to and from the vault?
For metals you own outside an IRA, the options differ; our page on insuring precious metals covers them.
Audits and Verification
Reputable depositories have their holdings counted and reconciled regularly, often by independent auditing firms, and reconcile their records with each custodian. Some publish summaries or allow customers to request audit confirmation. Ask how often counts take place, whether they are full physical counts or samples, and whether the results are shared. Strong audit practices are one of the main differences between professional vaults and informal storage arrangements.
Visiting and Viewing Your Metal
Policies vary. Some depositories allow account owners to schedule a viewing with identification and advance notice, particularly for segregated holdings. Others do not allow visits for security reasons and rely on statements and audits instead. If being able to see your metal matters to you, ask about this before choosing a location.
Getting Metal Out
Metal leaves the depository in one of three ways, all on the custodian's instruction:
- Sale: the depository releases metal to the buying dealer, and cash goes back into the IRA.
- In-kind distribution: metal is shipped to you, insured, and the custodian reports its value as a distribution. See in-kind distributions.
- Transfer: metal moves to a depository used by a new custodian.
Shipping costs and timelines apply in each case. Our page on shipping and delivery of precious metals explains how insured shipments work.
Storage Costs
Depository fees are usually charged annually and passed through the custodian. They may be flat or based on account value, and segregated storage generally costs more than pooled storage. Your custodian or precious metals company should give you the exact figures in writing. Goldco states that metals for its customers' IRAs go to an independent insured depository; our page on Goldco storage and custodian partners explains what it publishes about storage.
Frequently Asked Questions
Can I choose the depository?
Usually you choose from the facilities your custodian works with. Ask for the list when opening the account.
Is my metal at risk if the depository has financial trouble?
Metal held for customers is generally not the depository's own property. Ask how holdings are titled and protected, and read the storage agreement.
Can I move metal to another vault later?
Yes, typically by instructing the custodian. Shipping and handling fees apply.