Gold investing options with the lowest fees

Allocating a portion of your portfolio to gold can have many benefits, especially in today's environment. Gold has a historical reputation built on its store of value over time, ability to hedge inflation and performance during periods of economic uncertainty.

If you're considering a gold investment today, you'll benefit from choosing the right type for your individual goals. And like any investment, you don't want high fee costs bringing down the value of your assets.

Fees are part of investing and will generally factor into any gold investment you make. But choosing a low-fee gold investment option can help you maximize the value of your gold over time. Before you buy in, do your research to find the right gold investment for your financial goals.

Learn more about whether investing in gold is the right choice for you with a free information kit.

What to know about gold investing fees

Many common gold investing options charge fees for buying in — which is why you should evaluate your entire existing portfolio, investment timeline and goals before you decide to diversify with gold.

"Alternative investments often come with higher fees than traditional assets, which can eat into your returns," says Danny Michael, CFP, founder of Satori Wealth Management. "So make sure you understand all the costs involved before investing." 

Investors concerned about fees should also remember the recommended allocations. Experts say it's ideal to invest no more than 5% to 10% of your overall portfolio in assets like gold, which act as alternatives to traditional stock investing.

"If you're new to alternative investments, it can be wise to start small while you learn the ropes," Michael says. "As you become more comfortable and knowledgeable, you can gradually increase your allocation or consider seeking advice from a financial advisor or investment professional."

Gold investing options with the lowest fees

Here are a few things to consider as you get started with different types of gold investments:

Gold IRA

A gold IRA is a type of self-directed IRA you can use to invest in gold for retirement. A common option for investing with a gold IRA is working with a gold investment company for buying and storage. Gold IRA fees can vary depending on the gold investment company you choose. As an example, you may pay a one-time setup fee, annual maintenance fee and storage fee. However, some companies don't charge each of these fees, and they can vary depending on the value of your investment.

A recent post from Goldco, for example, estimates its average annual cost for gold IRAs is about $180, or a 0.72% annual fee based on the typical minimum $25,000 investment — though that rate goes down the more money you invest. If you fund your gold IRA with $50,000, for example, that leaves your annual fee at just 0.36%, which is lower than the current average expense ratio for equity mutual funds. 

It always helps to compare different companies before making a decision so you can find a low-fee option that works for your budget. Find out more about how you could benefit from a gold IRA with a free investors kit. 

Physical gold bars or coins

With some preparation and research, investing directly in gold bars and coins can be a good way to minimize your costs.

Many dealers charge a premium on the spot price of the gold bars or coins you buy. To minimize the amount you pay, make sure you know the current spot price of gold before you shop.

Physical gold can also come with fees for transportation, storage and insurance, though there are various ways to reduce these fees. When you buy from a seller in person, you may not have to pay for transportation costs, for example. And many physical gold investors may be well-served by a small fireproof safe at home as a storage option instead of paying for storage at a bank or credit union.

Like any big purchase, take time to compare all the options available to you before you buy so you can get the best value for your money.

Low-cost gold ETFs

Investing in gold through gold exchange-traded funds (ETFs) and stocks through a brokerage can be both the easiest and most cost-effective option. 

With a gold ETF, you can buy into either a fund that holds physical gold and tracks gold's value directly or a fund made up of equity in companies related to gold, such as gold mining companies.

According to ETF.com, the average expense ratio for gold ETFs (including both commodity and equity assets) is 0.61% today. However, there are options among the 35 current gold ETFs available with expense ratios as low as 0.10% to 0.15%. 

The bottom line

Investing in gold can be a good option for anyone looking for a hedge against inflation or who wants to diversify their portfolio amid market volatility. But you'll want to know the fees involved before you buy in. While you may pay a premium no matter how you decide to invest in gold, you can score the lowest fees by knowing exactly how a dealer or gold investment company's fee structure works, minimizing the costs you may accrue and considering low-fee options like ETFs. 

Start learning more about the best options for gold investing today with a free investment guide.