A gold IRA is an individual retirement account that invests in precious metals like gold and silver. Several conditions must be met for this type of account to make sense for you, some of which may or may not be realistic depending on the type of asset class you believe will provide the best rate of return.
The bottom line with a gold IRA is that you can buy these precious metals at their current market price and enjoy tax-deferred growth. Many people who have held their stocks or bonds in IRAs for years have opted to switch to a gold IRA because they don't want the volatility and risk of holding equities outside the traditional markets.
How Does it Work?
First, you must set up a Self-Directed IRA, a retirement account controlled by the investor, not by an advisor but rather by the account owner.
Once this is established, you can buy physical gold or silver bullion from a bullion dealer at its current price, and the transaction becomes tax deferred. There are no limits on how much gold or silver can be purchased for your gold IRA other than what your Self-Directed IRA custodian allows. Typically, there are no limits on how many accounts you can open. Each bullion purchase must be authorized by two signatures: yours and that of the custodian.
What Are the Benefits of a Gold IRA?
First and foremost is the benefit of tax-deferred growth. The Internal Revenue Service prohibits any form of direct pay-outs from the account holder. All earnings are reinvested, and you can take your withdrawals only after the age of 59 ½ when you've reached your retirement date (thus earning you a possible 10% penalty for early withdrawal).
The ability to defer taxes on precious metals is a big attraction, especially if you believe prices will continue to rise. You can buy at today's price and earn interest at today's rates, so it could be less costly than holding your assets in other IRAs or 401(k) accounts. Another attractive benefit of gold IRAs is that you can buy gold and silver for as little as $1 per ounce.
You don't have to purchase full or fractional ounces, so you can buy it broadly over time or invest a large lump sum. If the value rises significantly after your initial purchase, you can sell the precious metals and pay no capital gains tax because your tax basis will remain the same.
A disadvantage to this type of account is that you can't invest in mutual funds or stocks through your gold IRA account. You must buy gold and silver bullion at today's price and hold it until retirement, allowing it to earn interest over the years.
Does Fidelity Offer a Gold IRA?
Fidelity does not offer a self-directed gold IRA. Fidelity doesn't hold inventory in precious metals when trading precious metals; it only acts as an agent. Fidelity is one of the largest custodial IRA administrators available.
Each year Fidelity manages over $300 billion in assets. They are the primary custodian for many financial advisors and broker-dealers. They also offer many individual retirement accounts (IRAs) and employer-sponsored retirement plans, such as 401(k) plans.
What Services Does Fidelity Offer?
Fidelity is among the most respected financial institutions in America. They offer several private-label investment products, including mutual funds and exchange-traded funds. The company offers various services, including.
The company offers a platform where you can buy and sell investments from more than 75 Fidelity funds, which include more than 6,500 individual securities. You can also establish an account with Fidelity to trade more than 14,000 Fidelity and non-Fidelity mutual funds and exchange-traded funds (ETFs) across 65 different markets.
Customized investing strategies can be established and managed through Fidelity's specially developed Wealth Management Services. This service offers a team of experts with a wide range of investment knowledge and expertise, such as portfolio managers, financial advisors, and chartered financial analysts.
This service specializes in investments, such as private equity, hedge funds, and commodities. Fidelity organizes and structures investment strategies for high-net-worth individuals and families. You can work with a dedicated wealth manager to create a personalized investment plan.
Fidelity has a strong reputation for its mutual funds. It offers over 200 mutual funds with over $350 billion in assets. All of its mutual funds are categorized into one of three groups, depending on your investment strategy: actively managed, index-based, or asset allocation funds. It also provides access to more than 650 no-fee (no-load) funds from other fund families to simplify investing your money.
The company offers a complete set of retirement services, ranging from advisory planning to reminders and education. They also provide high-net-worth clients with the ability to discuss private banking opportunities, wealth transfer strategies, and custodial investment management.
What Gold Products Does Fidelity Offer?
Fidelity offers funds and stock, among other gold-related products. The most popular options include the following.
The company offers several precious metal funds that invest in gold and have silver exposure. They offer Gold Funds, Physical Gold and Silver, and their flagship, Fidelity Precious Metals and Mining Fund (FCPM, .09% expense ratio). Fidelity Precious Metals and Mining Fund is a long-term mutual fund that invests in precious metals.
Fidelity Precious Metals and Mining Fund also has an expense ratio of .09%, higher than most other precious metals funds. Fidelity Brokerage Services offer two different precious metals funds that invest in gold and silver. The funds include Gold Bullion Trust – Shares (GOLDB, .10% expense ratio) and Gold Miners Index Shares (ILMNX, zero next year). The expense ratios are both .10%.
Precious Metals ETFs
Fidelity offers two Precious Metals ETFs with gold, silver, platinum, and palladium exposure. The first is Fidelity Pure Gold Shares (ZPR) which provides exposure to the value of gold. The fund has a 0.25% expense ratio. The other is the Pro Shares Fund Series Trust – Silver Trust (SILV), which seeks to track the performance of silver bullion prices over time. SILV has a 0.25% expense ratio as well.
Fidelity also offers several short-term precious metals products in addition to its gold and silver funds. You can purchase the Fidelity Gold and Silver Shares (FGP, .25% expense ratio) and Fidelity MSCI Index International Gold and Silver Fund (FIFGX, .22% expense ratio).
Fidelity's only mutual fund that invests in gold is the Fidelity Select Gold Portfolio (FSGDX, 27% expense ratio).
The company also offers a precious metals-backed IRA. You can open an account with as little as $1,000 and have immediate access to precious metals bullion. There is a minimum annual holding requirement of $1,500 with a maximum of 200 ounces. There are no fees for holding and converting to precious metals bullion. An annual storage fee of $50 for storing precious physical metals.
Fidelity also offers certificates of ownership for different types of precious metals, such as gold, silver, and platinum. Anytime you trade one type of physical metal for another, you will incur a commission fee. These commissions may be more or less expensive than trading stock online and could cost anywhere from $19 to $55 per transaction.
These are investment companies that pool money from several investors and invest it in stocks, bonds, short-term debt securities, or other securities. Mutual funds are transparent and run by professional money managers. Investors get diversification, professional management, liquidity, and economies of scale.
There are more than 10 million mutual fund shareholders in the United States alone. The average investor is aged between 48 and 64 years old with an annual income of $48,000-$55,000. Mutual fund owners have the potential to earn a 6% increase on average over 15 years of investing in equity mutual funds (stocks).
It's estimated that retail investors account for approximately 50% of all assets invested in the market. They are the backbone of the market and a primary source of business capital.
Fidelity is one of America's largest mutual fund companies, with about $1 trillion in assets. The company has more than 200 mutual funds and billions invested by high-net-worth investors and institutions.
Fund managers manage a mutual fund or are otherwise customized to manage investments based on an individual's needs and risk tolerance. Mutual fund managers run portfolio management, research, trade execution, portfolio research, prepare reports, maintain company operations, and develop new ideas to support your portfolio goals.
Exchange-traded funds are similar in many ways to mutual funds. ETFs trade like individual stocks and provide investors with diversification and broad exposure. The biggest difference between ETFs and traditional mutual funds is that ETFs have lower operating costs, fees, and taxes than traditional mutual funds.
ETFs are traded on exchanges, meaning you can buy or sell them anytime you want without placing a purchase order. There are no additional commissions to pay as an investor.
Fidelity has two exchange-traded funds that invest in precious metals: Fidelity Precious Metals & Mining Fund (FCPM, zero expense ratio) and Fidelity Pure Gold Trust (ZPR), which invests in gold bullion. ZPR has a 0.25% expense ratio, and FCPM has a 0.10% expense ratio.
ETFs are typically designed to reflect the performance of an underlying basket of securities or commodities such as gold, silver, and crude oil and commodities like corn, wheat, and soybeans. The basket is often referred to as a "track," which is why ETFs are referred to as "trackers."
ETFs can be purchased by individuals who want to buy and sell them on an exchange at any time. They are also available for institutional investors, including pension funds, trust companies, insurance companies, and investment managers.
Shares of stocks represent fractional ownership of a company and give shareholders an ownership interest in the company's assets and profits. When you buy a share of stock, you become a partial company owner, which is reflected in your stock certificate. Stocks offer the potential for profit when the stock price rises and the chance for loss when it falls.
Investing in stocks allows investors to diversify their portfolios by investing in many companies rather than just one. Additionally, selling shares of stock allows investors to realize a capital gain or loss by trading at prices different than what they paid at any given time.
Individual retirement accounts (IRAs) were created to allow small investors to keep assets for retirement. To be eligible for a traditional IRA, you must first have earned income and have contributed to a SEP-IRA or an employee savings plan with your employer.
Many people need to fully understand the limitations of IRAs, which makes it difficult to invest. The lack of understanding often causes people to make poor investment decisions, which could result in a loss of investment capital or even retirement funds.
Fidelity offers several IRA products that can help you meet your goals. The company offers IRAs for individuals with a wide range of income levels and investor needs. IRA products allow you to invest in individual stocks, small-cap stocks, large-cap stocks, international stocks, U.S. treasury securities, REITs, U.S. government obligations, and fixed-income securities such as bonds and mortgage-backed securities.
How do I transfer money online between my fidelity and bank accounts?
To transfer money online to your fidelity account, you must link a bank account that you will use as the source of funds to your fidelity account. It is free to link a bank account to your Fidelity.
How can I gift stock out of my brokerage account?
Using the Fidelity Direct Pay service, you can transfer stock electronically from your brokerage account.
How long does it take for an investment to clear?
When an investment is purchased, it takes approximately one day for the transaction to clear through Fidelity. When the buyer receives his or her dividend, the cash received from that dividend is credited to that investor's account in approximately three business days.