Is Fidelity the Right Choice for Your Gold IRA Investment Strategy?

Fidelity is a prominent investment and trading platform worldwide, offering diverse assets for investment across various sectors. Its services cater not only to US citizens but to people globally.

While acquiring a gold IRA with Fidelity is possible, their offerings have some significant limitations and disadvantages. Therefore, it is essential to understand the following information and consider some viable alternatives.

Buying Precious Metals for Investment

The Fidelity website includes a section that covers the acquisition of precious metals such as gold, silver, palladium, and platinum. Investors can purchase these metals as part of their portfolio diversification. Nonetheless, there are some constraints to consider.

According to the website, historical trends indicate that gold and silver perform well during economic downturns and tend to increase in value during high inflation. Given the persistent concerns of both these factors in the US in recent years, this has made them an attractive investment option for many investors.

To purchase precious metals through Fidelity, you must fulfill the minimum order requirement of $2,500, with no maximum investment limit. The purchase is limited to whole ounces or coins, and fractional products are not available.

The purchase window for precious metals is restricted to specific hours, from 8 AM to 3 PM Eastern Time. The online market is only available during these hours due to the fluctuation of precious metals prices, which change every minute while the exchanges are open. After the exchanges close, the metal prices cannot be monitored.

Available Products

Fidelity's website segregates its products by the type of precious metal, providing options for gold, silver, palladium, and platinum.

Gold products offered by Fidelity include:

• American Buffalo coins
• American Eagle coins
• Austrian Philharmonic coins
• Australian Kangaroo coins
• South African Krugerrand coins
• Canadian Maple Leaf coins
• Gold bars

Fidelity provides gold bars of varying purity, ranging from 99.5% to 99.99%, contingent upon the type and manufacturer. These bars come in several sizes, such as 1 kilogram, 400 ounces, 1 ounce, 5 ounces, 10 ounces, or 100 ounces.

Fidelity's silver product offerings comprise:

• American Eagle coins
• Australian Kookaburra coins
• Canadian Maple Leaf coins
• Silver bars

Fidelity's silver bars are all 99.9% pure and available in several sizes, including 1 ounce, 10 ounces, 100 ounces, or 1,000 ounces. Comparatively, Fidelity's silver coin selection is more restricted than its gold coin selection. Other alternative companies offer a wider variety of silver inventory.

Fidelity's platinum product options consist of the following:

• American Eagle coins
• Canadian Maple Leaf coins
• One ounce bars
• 10-ounce bars
• 50-ounce bars

Fidelity's platinum bars, regardless of the manufacturer or refinery, are all 99.95% pure.

Fidelity offers only one palladium coin, the Canadian Maple Leaf, in a one-ounce size. It is possible that the US Mint does not produce palladium coins, or they might be challenging to locate. Fidelity's palladium bars come in three sizes: one ounce, 10 ounces, and 100 ounces, and all of them are 99.95% pure, qualifying for keeping in an IRA.

IRA Eligible Products

Fidelity imposes limitations on its IRAs, even though many of the coins and products offered meet the IRS's purity requirements. Fidelity's retirement services only allow a few products to be kept in a Fidelity IRA. Specifically, you can invest in silver, gold, platinum American Eagles, and a Gold American Buffalo. In addition, only bullion bars are available for investment in a Fidelity IRA, and coins from other mints that meet IRS standards are not eligible.

However, our recommended alternative companies allow a broader range of products to be invested in your IRA. It is important to note that all items in their inventory must comply with federal regulations, and not every product may be eligible for an IRA. Thus, verifying eligibility or seeking assistance from a company representative before making investments is crucial.

According to Fidelity, several economic factors may influence the value of your precious metals. The price may increase significantly due to fluctuations in the stock market, actual and anticipated inflation, or industrial demand. Moreover, Fidelity highlights that interest in collecting precious metals can drive up prices. However, it is essential to note that numismatic collectibles cannot legally be held in a retirement account. Bullion is considered less speculative and less likely to be affected by collectors. However, there is still a possibility that this factor may influence the price.

Other Fidelity Investments

According to Fidelity, alternative ways exist to invest in the precious metals industry without directly purchasing precious metals. As a large investment company, Fidelity offers many investment options.

For instance, one can invest in a gold ETF, which invests in companies producing or refining gold. Mutual funds also provide diversification through investing in a variety of companies. Additionally, such investments may offer dividends.

However, mutual funds are not immune to market fluctuations and may decline along with the economy. Furthermore, the fund's success relies on the support of other investors.

Fidelity Investment Fees

Fidelity's website provides a breakdown of fees for using their online marketplace to purchase or sell precious metals. It's important to note that the fees mentioned are for non-IRA investments. For IRAs, the minimum purchase is $1,000, and for non-IRAs, it's $2,500.

Fidelity charges a percentage-based fee for buying and selling, which varies based on the purchase amount. For purchases up to $10,000, the fee is 2.9% of the gross. For purchases between $10,000 and $50,000, the fee drops to 2.5%. Between $50,000 and $100,000, the fee is 1.98%. And for purchases above $100,000, the fee is reduced to 0.99%. The prices listed are transparent and clearly stated on Fidelity's website.

For selling up to $50,000 worth of precious metals, Fidelity charges a transaction fee of 2%. If you're selling between $50,000 and $250,000 worth of metals, the transaction fee is 1%. Once the transaction exceeds $250,000, the fee drops to 0.75%.

However, if you're concerned about the potential for fees to add up quickly, alternative companies use flat fees. These companies charge a set fee for transactions and wire transfers rather than taking a percentage of your purchase. Some custodians and storage facilities charge flat fees for their services, which can help you budget more effectively for the costs associated with maintaining your precious metals account.

Our Best Alternatives

Although Fidelity offers a limited range of bullion, their approach has several disadvantages. Regardless of the transaction size, they apply percentage-based fees for buying and selling. Moreover, they only permit American Eagle coins in an IRA, even if other coins meet the requirements. Lastly, due to volatile market prices, they limit trading to EST business hours.

Our top alternative companies offer a more streamlined approach to investing in precious metals. Unlike Fidelity, they specialize in precious metals, providing high-quality products and assistance with IRA setup paperwork.

Moreover, these companies have garnered excellent reviews and recognition. They have received awards and sponsorships from celebrities, and many customers have left positive feedback. In the rare instance of a complaint, the company takes prompt action to address and resolve the issue for the customer.

Goldco

Goldco's reputation as a top industry leader in the precious metals industry is well deserved. While they weren't the first gold IRA company to enter the market, they have certainly set the standard. Because they focus solely on gold and silver IRAs, their process is streamlined and efficient, taking only about fifteen minutes to complete tasks that would otherwise take hours.

Goldco prides itself on providing outstanding customer service and guidance to those who wish to diversify their portfolios with precious metals. Their team of experts is always ready to assist customers, ensuring they have a smooth experience from start to finish. For those who are new to the world of gold and silver IRAs, Goldco offers extensive educational resources to help customers make informed decisions. Their commitment to excellence has made them a trusted name in the industry.

Augusta Precious Metals

Despite its high investment minimums, Augusta Precious Metals is a reputable industry leader with a loyal following. They provide individualized attention to each customer, ensuring they understand their investment choices' risks and benefits. Augusta aims to ensure that every customer feels confident in their investment decisions.

The company also offers ongoing customer support, including market insights. This means they can alert you when your retirement holdings are at risk. Additionally, Augusta provides free webinars to educate potential customers before they make any purchases.

American Hartford Gold

American Hartford Gold has gained popularity through television advertising and positive word-of-mouth reviews. The company has received high ratings from most of its past customers, who often recommend AHG to their family and friends.

One of the advantages of working with AHG is that there are no minimum investment requirements or additional fees to get started. Therefore, individuals can use their IRA services regardless of the amount they have to invest. If Fidelity's $1,000 minimum investment threshold appeared more achievable than other companies like Goldco or Augusta, AHG could be an excellent option.

Also Read :Investing in Your Future: A Head-to-Head Comparison of Gold IRA and Roth IRA

Final Thoughts

Fidelity is a well-known global investment firm with a wide range of retirement and marketplace assets that can be purchased with cash. Although Fidelity offers IRA precious metal investments, they have strict limitations. For instance, only American Eagle coins are allowed in a Fidelity IRA, and other coins are not eligible.

Moreover, Fidelity charges transaction fees as a percentage of your overall purchase when buying precious metals on the marketplace, and the same applies when selling those metals. On the other hand, companies like Goldco and American Hartford Gold utilize a flat fee structure that does not burden you with extra transaction fees.

While Fidelity offers gold IRA services, we suggest alternatives like Goldco. Goldco specializes in precious metals IRAs, allowing them to cater to your needs. Their approach involves assigning one account representative to each client, who will take the time to understand their goals and provide personalized recommendations based on their unique priorities.