Visionary picture of an old couple after retirement

The Internal Revenue Service (IRS) dictates that an IRA (individual retirement account) must have a custodian.

An IRA custodian is an entity, most likely a financial institution, that holds your investments and savings and is responsible for ensuring these adhere to government and IRS regulations.

There are several financial institutions to choose from when selecting an IRA custodian. Here are some of the factors you should consider to make the right decision:

Type of IRA

The type of IRA you have also dictates the types of custodians you can choose from.

There are several different types of IRA. However, they can be broken down into two main categories, standard IRAs and self-directed IRAs.

In standard IRAs, the custodians would make the investment decisions for you, while in self-directed IRAs, you would be making the investment decisions.

Some self-directed IRAs also mean that your custodian would invest in other financial instruments apart from bonds, stocks, and mutual funds, giving you more investment options.

Standard IRAs

You can choose from common financial institutions such as banks, mutual fund companies, and insurance companies for standard IRAs.

A new type of custodians has recently emerged. These are called Robo-advisors, which are online platforms running on algorithms to advise you on managing your portfolio.

These are less costly, too, as there is no human interaction. When choosing from these options for custodians, you’ll have to consider each institution’s service charges, past performance, and service quality.

Self-Directed IRAs

The IRS directly approves custodians for self-directed IRAs. Self-directed IRAs also have the option to select administrators and facilitators that serve as intermediaries between the custodian who holds your investments and yourself.

As self-directed IRAs are allowed to invest in more unconventional investment assets, the custodians for a self-directed IRA would have to be quite knowledgeable and well-versed with the IRS regulations.

The right custodian for an IRA can help make your retirement dreams a reality. Orion Metal Exchange provides options to open your IRA account by investing in precious metals.

We are amongst the best gold and silver IRA companies and custodians. Our experts can provide you with more information on how to open your IRA with us.

Contact us to get in touch with our team, who’ll streamline the process for you and provide you with expert advice.