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Fidelity was founded in 1943 with Edward Johnson as the first president of what was then called the Fidelity Fund. Johnson's goal with Fidelity was to, "Take intelligent risks rather than follow the crowd."
Since Johnson's tenure, Fidelity has grown into a massive financial services firm with over 50,000 employees working with clients in nine different countries across the globe.
To the everyday person, Fidelity is best known for the financial services it provides to individual investors such as the trading platform, and their stocks, bonds, ETF offerings, and many more products.
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Investing with Fidelity
With the world and financial markets in chaos, more and more individual investors are seeking the safe haven of physical precious metals and especially gold.
Smart investors are looking to protect their retirement and lower the volatility in their portfolios by adding physical gold, and really smart investors are looking to limit their tax liability by adding physical gold to an IRA.
Because of this many investors are wondering if they can set up a Gold IRA with Fidelity.
Well, it is easy to invest in gold with Fidelity if you want a gold stock, mutual fund, or ETF, but not if you want to create a Gold IRA.
Fidelity does not offer the special type of self-directed IRA that is allowed to hold physical precious metals but don't worry, keep reading, at the end of this article we'll give you a few of our top recommendations that specialize in helping investors like you set up IRAs that can hold physical gold.
What is a Gold IRA?
Unlike traditional IRAs, a gold IRA is a special type of individual retirement account that the IRS allows to hold physical gold, as well as other metals like silver, platinum, and palladium.
These accounts can hold physical bullion in the form of bars and coins.
Like normal IRAs, they can be created with pre-taxed funds or created like a Roth IRA with income that has already been taxed.
A gold IRA is a simple and effective way to hedge against inflation and the constant devaluation of the U.S. dollar, which politicians seem to think is their tool to fix all the problems they create.
A gold IRA is backed by a real hold in your hand tangible assets, physical gold. A dollar is backed by the broken promises of the government that printed it.
What are the Benefits of a Gold IRA?
Investing in a gold IRA gives you the benefit of portfolio diversification while also minimizing your tax liability. The IRS allows you to transfer or roll over old 401k or IRAs into a precious metals IRA without getting any tax penalties.
A gold IRA is one of the best defenses from an evil and invisible thief known as inflation. Rampant inflation has been unleashed all over the world and most investors have been caught off guard.
This inflation is wicked for many reasons because it destroys the value of the savings that investors have spent a lifetime accumulating.
When you save for a rainy day, then that rainy day comes and you find out that you only have half of your savings because the other half was stolen, it can be devastating.
It doesn't have to be this way.
With a bit of planning, you can reduce your risk of inflation and devaluation by getting your money out of the dollar and into real tangible assets with a gold IRA.
Gold is an effective hedge against the continued devaluation of the dollar because it has real-world value, it cannot be endlessly printed, only mined in small quantities.
The United States Constitution makes it clear in Article 1, section 10 when it says No State shall, "coin money; emit bills of credit; make any thing but gold and silver coin a tender in payment of debts."
The Founding Fathers knew that Independence from England was critical because it meant protection against their central banking system.
The U.S. dollar has lost 99% of its value since its creation.
The only way to protect yourself and your retirement from this destruction is:
ETFs vs. Physical Gold
There are two options when it comes to acquiring precious metals, physical or paper. Although, there is no substitute for ownership of physical gold. Paper gold is an I.O.U., physical gold is a real asset you can hold in your hand.
An ETF (exchange-traded fund) is paper that controls an asset. It is another entity's liability to you. The most well-known of these ETFs has the ticker symbol "GLD". This paper gold is "backed" by gold, but it does not have all the benefits of physical gold.
When you purchase shares of GLD you are buying stock in gold. The ETF generally tracks the price of gold, but you'll never be able to message GLD and ask them to send you your shares of GLD in physical gold, unlike a gold IRA.
People that like to day trade, and firms that engage in high-frequency trading like ETFs because it allows them to "invest" in physical assets without taking physical possession of the assets, in addition to an ETF not having any storage costs.
Day traders and high-frequency trading algorithms look to shave fractions of profits off the price movement in gold. This approach is not ideal for long-term investors.
What Is a Self-Directed IRA?
A self-directed IRA is unique from other IRAs because it gives the investor a lot more control over their financial future. Similar to 401k or regular IRAs, you still enjoy the tax protections in a self-directed IRA.
A self-directed IRA boils down to two main differences from traditional IRAs - a greater degree of control over your retirement savings, and more options to invest in.
Many investors choose self-directed IRAs because it allows them to hold assets that are not just paper assets like stocks and bonds. A SDIRA allows you to invest in physical precious metals, which adds a level of stability and diversity to your portfolio that is not possible with traditional IRAs.
How Does a Gold IRA Work?
A Gold IRA is basically like any other retirement savings account but it has additional benefits that other do not, which is it allows you to hold physical gold bars and gold coins.
You are also allowed to hold physical precious metals like silver, palladium, and platinum, that meet IRS regulations.
Other than what is stated above, Gold IRAs have the same features as other retirement accounts in that you can invest your retirement savings in a tax-protected manner (either pre-income tax or post-income taxed), and then you have to take distributions when you reach a certain age.
You are allowed to set up a Gold IRA in three ways:
Conventional Gold IRA
This works the same as conventional IRAs in that your savings are not taxed when you place the money in the account.
Your initial investment, contributions, and any gains are not taxed until you are required to take distributions upon retirement, where you have to pay taxes in a much lower tax bracket.
Roth Gold IRA
This type of retirement account works the same as a regular IRA in that the savings you put in has already been taxed as income.
The benefit of Roth Gold IRAs is that whatever gains your precious metals investments make, and your subsequent required distributions during retirement, are tax-free.
SEP Gold IRA
A simplified employee pension individual retirement account (SEP-IRA) is very similar to a traditional IRA but it's meant for business owners. Your retirement contributions are not taxed.
And they grow in the account without being taxed. Once you have to take distributions during retirement, your distributions are taxed as income, but you will be in a much lower tax bracket.
Which Precious Metals Are Eligible for Gold IRAs?
It's important to know that not all gold is eligible to be kept in a tax-protected Gold IRA. The IRS states that investment-grade precious metals eligible for IRAs must meet specific fineness standards.
Per the IRS: gold must be .9950 minimum purity, silver must be .9990 minimum purity and platinum and palladium must be .9995 minimum purity, and must be manufactured by an approved and accredited refiner.
Failure to comply with these standards will land you with significant tax penalties.
Here are some examples of IRA eligible precious metals:
This is not an exhaustive list, there are many products available. There are also specific bars and bullion made by national government mints or approved refiners that are eligible too. Talk to a company that specializes in Gold IRAs to learn more.
How To Fund Your Gold IRA
Once you have established your self-directed IRA, funding your account is fairly simple. There are three main ways investors fund their accounts:
To fund your new IRA with an existing IRA you need to complete an IRA to IRA transfer by filling out a Transfer Request Form with your custodian. This method keeps you safe from IRS penalties and ensures your money remains tax-deferred.
A direct rollover is a popular way to convert your old 401(k) or similar qualified retirement plan into funds for your Gold IRA while ensuring your money remains tax-deferred.
Indirect 401(k) rollovers are not recommended because it's easy to incur tax penalties.
Direct Cash Funding
It is simple to fund your Gold IRA with cash. All you need to do is contact the custodian of your self-directed IRA and send them either a wire payment or a check.
Your tax treatment for direct cash funding will depend on the type of Gold IRA you created, whether it's pre-tax (traditional IRA) or post-tax (Roth IRA).
Depository Storage Facility for Your IRA
Your precious metals have to be stored in a third-party storage facility. These depositories are state-of-the-art, high-security buildings that are 100% insured against any and all loss.
Per IRS regulations, all precious metals held in a Gold IRA must be kept in the custody of a deposit storage facility that is approved by the IRS until you take distributions during retirement or a liquidation event that incurs tax penalties.
These depositories give you extra protection and inspect, audit, and weigh your metals upon delivery, then securely store them.
Withdrawal Rules for IRAs
If you are familiar with the withdrawal rules for regular IRAs, then you will be familiar with the withdrawal rules for Gold IRAs because they are nearly identical. The only difference is that you can get the physical metals, instead of a cash payout, if you choose.
If you withdraw money before you reach the age of 59 1/2, you'll be hit with a 10% tax penalty by the IRS. Then the IRS will add this money as income to your income tax, and tax you on that higher income tax number. Avoid early withdrawals unless absolutely necessary.
You are not required to start taking distributions until you reach the age of 70 1/2, so if you can leave your metals alone, that gives you 11 years to capture untaxed price appreciation.
We hope you found this review helpful. While Fidelity is a good company to invest in, they do not offer Gold IRAs.
Precious Metals IRAs offer investors a safe way to protect their retirement portfolios from the dangers of the stock market and the reckless spending and money printing ways of the government.
While Fidelity can not help you with a Gold IRA, there are several good companies out there that specialize in these unique accounts, but you must be careful who you choose to work with as there are many unsavory firms in the precious metals business.
Fortunately, we have researched nearly every company and only a couple of them meet our stringent requirements to receive our recommendation to our readers.
You can get a Free Gold Investors Guide from our top gold and precious metals company recommendation by clicking the link above or you can read our article of the top companies we reviewed this year:
Or, if you like what you have read about Fidelity, you can go to their website below: