A Self-Directed Individual Retirement Account (SDIRA) gives you the freedom to invest in a slew of alternative assets. The main advantage of investing in alternative assets lies in the fact that it enables your funds to grow faster.
Precious metals are popular assets to invest in using your SDIRA. When you invest in precious metals using your SDIRA, you can also call your account as Precious Metals IRA.
Why You Need an IRA Custodian?
You need an IRA custodian to maintain your account. Although, you will instruct your custodian on matters related to your investments, yet the custodian plays an important role.
So, it makes sense for you to acquaint yourself with the role of your custodian.
Custodian handles all the paperwork that is associated with your transactions. Also, the custodian processes all the transactions of your account. Usually, IRA custodians are familiar with precious metals so they can act quickly on your transactions.
At the same time, the custodian maintains a relationship with the depository in which your physical metals are placed. The custodian also helps organize the storage of your metals. And ensure that the necessary documentation is filed as per the norms.
The administrative responsibilities related to your account also fall under the care of the custodian. The responsibilities can include everything from IRS reporting to withdrawing your assets (if you instruct so) and distributing them. In addition to familiarity with the required documentation, custodians also have the necessary mechanism to safeguard your transaction details.
Who Can Be a Custodian?
Usually, certain banks, trusts, and other such financial institutions serve as custodians for retirement accounts. For the institutions to act as custodians, the IRS approval is mandatory.
One of the main benefits of a precious metals IRA is the greater diversification of your retirement portfolio. It enables your funds to grow even at turbulent economic times. Read on the infographic to know more.
