Best Custodian Banks for Self-Directed IRAs 2024

Best Custodian Banks for Self-Directed IRAs

Introduction to Self-Directed IRAs

A self-directed IRA (SDIRA) is a type of individual retirement account that allows investors to hold alternative assets beyond stocks, bonds, and mutual funds. With an SDIRA, you have the flexibility to invest in real estate, private equity, precious metals, and more. However, SDIRAs require the use of an IRA custodian to handle transactions, reporting, and storage of assets for the IRA. Choosing the right SDIRA custodian is crucial to take full advantage while staying compliant with IRS rules.

This article will explore the best custodian banks for self-directed IRAs based on features, assets allowed, account costs, and reviews.

Benefits of Using a Self-Directed IRA

Before diving into the top custodian choices, let’s overview some of the key advantages of using a self-directed IRA:

• Invest in Alternative Assets – Expand your investment opportunities beyond Wall Street into real estate, private lending, gold/silver, business equity, and more.
• Tax-Advantaged Growth – Assets in an IRA grow tax-deferred or tax-free to amplify long-term compounding.
• Take Control – Self-direct your savings by handpicking assets rather than relying on stock-picking of mutual funds.
• Diversify Your Portfolio – Alternative assets can balance out market volatility in traditional IRA/401k plans.

Now that the benefits are clear, which custodian banks make the cut for best supporting self-directed IRAs? Let’s find out…

Custodian Bank Choice #1: Kingdom Trust

Kingdom Trust is a privately held independent trust company that leads the industry for self-directed IRA custodians when it comes to asset flexibility and transaction processing.

Key Features of Kingdom Trust

• Top Asset Flexibility – Kingdom Trust allows investing in all major alternative asset classes from real estate to private equity, P2P loans, precious metals, and more.
• Fast Transaction Processing – They excel at prompt review and processing of investment directions, wires, distributions, etc. to keep deals moving.
• Wide Array of Account Types – They provide custodial services for traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, HSA IRAs, and more.
• Specialized Service Teams – Dedicated departments for real estate transactions, loan servicing, private equity, and precious metals streamline the investing process.
• Free Online Account Access – Robust online account portal shows investment details, processing status, quarterly statements, and transaction history.

With such strong custodial support for all types of SDIRA investing, it’s no surprise Kingdom Trust has maintained an excellent reputation.

Custodian Bank Choice #2: Equity Trust Company

Equity Trust Company is another top choice among self-directed IRA specialists with their expertise in alternative asset transactions. The notable features include:

Why Choose Equity Trust?

• Lenient Prohibited Transactions Policies – More flexibility in avoiding rules violations with transactions involving disqualified persons.
• Short Hold Times for Funds – Get your money moved fast with 1-day external and internal transfer turnaround times.
• Hassle-Free Real Estate Investing – No charges for real estate assettransaction fees or holding costs.
• Free Private Consultations – Schedule phone/video meetings with alternatives experts for portfolio guidance.
• Robust Online Account Access – Manage your full account activities from deposits to asset details through their portal.

Equity Trust eases frustrations with their strong account perks for self-directed IRA investors seeking more creativity.

Custodian Bank Choice #3: Directed IRA

Rounding out the top trio is Directed IRA, balancing extra attentive customer support with transaction capabilities for varied alternative assets.

How Directed IRA Excels for Investors

• Specialty Asset Transactions – From bullion to insurance policies to file storage units and more, they handle exotic SDIRA assets.
• White Glove Customer Service – Get dedicated account representatives for individualized guidance rather than impersonal call centers.
• Low Account Minimums – Open an account with as little as $500 to start small if you’re testing self-directed waters.
• Fee Transparency – Website details all account fees and asset-based transaction charges so no hidden surprises.
• Intuitive Account Interface – Manage your account with ease across desktop and mobile, including transaction approvals.

For investors wanting close account management through specialty SDIRA assets, Directed IRA delivers excellent boutique-style service.

Best Custodians for Real Estate IRAs

Real estate remains one of the most popular assets for self-directed IRAs thanks to tax-free appreciation potential. Which custodian banks excel specifically for real estate investing IRAs?

For real estate IRAs, the standout custodian partners are:

• IRA Innovations – Streamlined support for seamless property flipping and purchasing using checkbook control IRA LLCs.
• NuView IRA – Tops for international real estate transactions in locations like Canada. Also allows crypto and gold IRAs.

Both handle the full spectrum of residential and commercial transactions as SDIRA custodians purpose-built for hassle-free real estate investing.

Best Custodians for IRA LLC/Checkbook Control

As mentioned by IRA Innovations above, IRA LLCs with checkbook control provide even greater flexibility for real estate investors to directly make offers, close quickly, and manage properties. Which custodians fully support the IRA LLC structure?

The best SDIRA custodians providing checkbook control IRAs and LLCs include:

• Strata Trust Company – Low-cost leader for solo 401k and checkbook IRA custodial services.
• New Direction IRA – Checkbook control for both IRAs and Solo 401ks. Also allows precious metals investing.

Working with a checkbook control custodian keeps your deals moving briskly compared to custodians only offering standard self-directed IRAs.

Best Custodians for Low Account Minimums

Not everyone has tens of thousands already saved to open a self-directed IRA account. Which top SDIRA custodians allow low minimum contributions to start small?

The most affordable low minimum custodians are:

• Directed IRA – Only $500 minimum to open an account.
• Strata Trust Company – Starts at $1,200 minimum for self-directed IRA account creation.
• Kingdom Trust – Offers a low $2,000 minimum initial IRA account funding requirement.

Custodians reducing buy-in barriers allow new self-directed investors to begin building their small cash savings into a diversified alternative asset portfolio.

Best Custodians for Low Fees

Keep more hard-earned savings working for you by selecting an IRA custodian with lower account administration fees and investment transaction charges.

The fixed-priced and fee-conscious top picks include:

• Mountain West IRA – Ultra-low $129 annual account fee paired with no asset or transaction charges.
• Directed IRA – Transparent admin costs detailed upfront so no hidden nickle-and-diming on trades.
• Strata Trust Company – One low-cost bundle pricing covers all account and transaction expenses.

Paying less in custodial costs means more money invested that can grow your IRA balance exponentially over decades.

Factors to Consider When Choosing an SDIRA Custodian

Beyond the custodian strengths outlined already for assets, service, and affordability, several other factors can sway your selection decision:

Account Insurance – FDIC for cash and SPIC protections for securities bring added coverage.

Funding Speed – How fast can you transfer external or contribute new funds to your account?

Distributions Processing – Quickly access your funds without long custodial review delays.

Specialty Teams – Dedicated real estate, lending, private equity groups streamline complex transactions.

Years in Business – Long-tenured custodians demonstrate stability and trust over newer players.

Reviews Reputation – Strong verified customer feedback scores rate satisfaction managing IRAs.

Keeping these criteria in mind while comparing your top contender picks ensures finding the best home for growing your SDIRA wealth.

Getting Started with a Self-Directed IRA

Convinced now to take more investing power back into your own hands backed by the strong foundation of an SDIRA custodian partner?

Here are the quick steps to opening your first self-directed IRA:

Step 1) Research Custodians

• Compare several from this guide to match servicing strengths to your priority investment assets and needs.

Step 2) Open Your Account

• Fund your newly created account via transfers or annual contributions depending on custodian minimums.

Step 3) Make Alternative Asset Investments

• Now the exciting part! Identify your first 1-2 alternative asset investments like real estate, promissory notes, businesses, etc.

Step 4) Direct Custodian to Execute

• Provide custodian with investment details, Letter of Direction, and any supporting documents to purchase/transfer under your IRA.

And repeat enjoying the added diversification, wealth growth potential, and other benefits unique to self-directed IRAs!

The Takeaway

Self-directed IRAs empower investors to supercharge portfolio performance through exclusive alternative assets offering tax-advantaged compound growth.

Choosing an SDIRA custodian with strengths aligning to your priority investment goals makes fulfilling the promise of these accounts easy. Firms like Kingdom Trust, Equity Trust Company, and Directed IRA provide exceptional service for starter IRAs to complex transactions.

Now that you know the top destination custodians for self-directed IRA investing, where will you choose to start and grow your wealth? The opportunities await!

FAQs

What assets can you invest in with a self-directed IRA?

Self-directed IRAs allow buying alternative assets like real estate, private equity, tax liens, precious metals, livestock, private lending, LLC ownership, and more that rules-restricted IRA brokers don’t accommodate.

Can I use a self-directed IRA for flipping real estate?

Yes, an SDIRA provides tax-advantaged benefits for funding fixer-upper homes you repair and quickly sell for profits while avoiding capital gains taxes. Most custodians allow this type of short-term real estate transaction.

What is the difference between a custodian and trustee for an IRA?

An IRA trustee holds the IRA account assets on behalf of the beneficiary while empowering the investor’s asset directions. A custodian more simply processes transactions, files IRS reports, and stores assets under the IRA while the investor serves as trustee directing deals.

How do I withdraw funds from a self-directed IRA?

Taking distributions from a self-directed IRA involves contacting your custodian to direct the transfer of funds either to your personal bank account or another qualifying retirement plan based on your age and account type. Withdrawals face ordinary income taxes plus penalties if under age 59 1/2.

Can I use a self-directed IRA to invest in a private business?

Yes. Your SDIRA provides financing to invest in and even fully buy out privately held C-corps, S-corps, LLCs, and partnerships. The custodian can fund operations, equipment, or staff to become part owner while profits flow back avoiding company taxes