The Ultimate Guide for Finding the Right Self Directed IRA Custodian

If you’ve ever wanted to start a retirement account that gives you flexibility and greater oversight, a self-directed individual retirement account (IRA) is the way to go. 

A self-directed IRA not only allows you to choose your investments, but it gives you the ability to invest in a wider range of assets, such as real estate. 

However, to do this, you’ll need to find a self-directed IRA custodian. And not just any IRA custodian – ideally, you’ll be choosing someone who you can trust to make sure your money is safe.

This article will provide you with a detailed guide on how to find the most suitable IRA custodian.

What is a Self-Directed IRA Custodian?

Self-directed IRA custodians are banks, financial institutions, or trust companies who will maintain your account on your behalf. With self-directed IRAs, most of the responsibilities involved with investing goes to the investor, so this is where you’ll have more flexibility. At the same time, since the custodians will not be evaluating your investment choices, there is a greater risk of choosing fraudulent investment options.

Choosing A Custodian

The fact that self-directed IRAs can be risky is why choosing the right custodian becomes important. There are a handful of companies and institutions that offer this service, but if they’re not as aware of your investment wishes, they may not be the best fit for you. 

Here are the factors to consider when choosing the ideal self-directed IRA custodian.

1. Make Sure They’re Approved

The IRS has a list of approved nonbank trustees and custodians that they regularly update. Choosing an approved custodian can give you peace of mind because you’ll know that they’re following government regulations when holding on to your account. 

2. Are They Experienced in Your Area?

While some custodians are more general in providing their services, others specialize according to the area of investment. For example, if you are investing in real estate, having a real estate custodian to assist you in understanding your accounts and assets will be beneficial.

You will rely on the expertise of your custodian if you are new to investing or if your investment area is highly niche. They will be the ones to ensure that your documents and investments are IRS-approved. 

3. How Are They Charging You?

Before you choose a custodian, find out the fee structure that they’ll be using. Different custodians bill differently, with some charging based on services and others based on flat fees. 

Make sure you know the sort of payment they’ll expect, and how much it will cost you every year. If you need to, ask a lot of questions to clarify this and ensure that you’re not paying more than you should. 

Self-Directed IRA Carries Risks

Holding a self-directed IRA does involve more awareness on your part because it is riskier. This is why you’ll have to be the one doing the leg work and conducting the due diligence on investment options. It’s also why choosing a trustworthy self-directed IRA custodian can give you one less thing to worry about.

If you are interested in starting a self-directed IRA, contact a Quest Trust Company IRA specialist.

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