Glossary of Terms
It's always wise to understand the key terminology when setting up an IRA. For self-directed IRAs that hold precious metals of any kind, these are the important terms to understand:
- Account holder: The person who opened the IRA and whose funds are in the IRA.
- Trustee: The entity that administers the account for the benefit of the account holder. Trustees can be banks, other financial institutions, or stand-alone organizations that exclusively administer gold IRAs. They must first be IRA-Approved to be an IRA Trustee.
- Custodian: The company that has possession of the physical metals in an IRA, usually a Wall Street-approved depository.
- Broker: The dealer who sells you the precious metals for your IRA. Dealers can be banks, financial institutions, numismatic professionals, or independent operators. It is always wise to compare prices before you select a Broker/Dealer.
- IRA Approved Products: The IRS approves different IRA products that can be included in Precious Metal IRA Accounts. Not all well-known Precious Metal Products are approved. In fact, Gold South African Krugerrands, the first Gold Bullion Coins ever made, are NOT approved for inclusion in Precious Metal IRAs. The products must meet certain purity restrictions as the IRS dictates.
Precious metals IRA: These accounts are commonly called "GOLD IRAs," but they can hold Gold, Silver, Platinum or Palladium. They are a special kind of self-directed IRA that are administered by a trustee for the benefit of the account holder. What makes them unique is that they can hold physical gold, silver, palladium, and platinum.