August 25, 2021

Best Crypto IRA

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Crypto IRAs offer a potentially tax-free or tax-deferred option for cryptocurrency investing so you can retire in comfort. But which one is right for you?

If you're saving for retirement, it can be hard to ignore the allure of crypto.

But if you buy through an exchange, how do you earn big returns without paying taxes?

That's where crypto IRAs come in, some of which may be tax-free or tax-deferred (more on this later.)

In this in-depth review, see how the most popular crypto IRAs stack up to each other. We'll compare security, fees, ease of use, and other important factors.

What is a Crypto IRA?

Crypto IRAs, also called Bitcoin IRAs, are self-directed IRAs that allow you to invest in cryptocurrency. This is what the IRS calls an "alternative investment", which is less conventional or holds more risk than stocks and bonds.

Because of its volatility and lack of regulation, many custodians don't offer crypto, but there are a growing number that do. However, many crypto IRAs offer a very limited range of currencies to trade compared to normal exchanges.

Fees
Crypto IRAS may have higher fees than traditional IRAs. The most common fees associated with crypto IRAs are establishment fees, monthly account fees, holding fees, and the fees incurred for buying coins and transferring funds.

Establishment and monthly maintenance fees are unusual for most traditional IRAs.

Regulations
Crypto IRAs are subject to some of the same regulations as regular IRAs, including contribution limits. Contributions are limited to $6,000 per year, or $7,000 if you're over 50.

Those using crypto IRAs must also maintain standard market hours. Unfortunately, this means potentially missing out on significant changes that happen when the market is closed.

Investments may or may not be subject to capital gains taxes.

Best Cryptocurrency IRAs

When choosing your crypto IRA, you'll want to consider fees, security, and investment minimums, among other factors. Here are the 6 best crypto IRAs to grow your nest egg.

1. iTrustCapital: Best For Hands-On Trading

Founded in 2018, iTrustCapital is a crypto IRA popular for its low rates compared to other crypto IRA custodians, which may charge as much as 15% per transaction when trading crypto.

They have a trading platform that allows you to invest in crypto and precious metals to fund your retirement.

iTrustCapital also has a conveniently transparent fee structure. In addition to a $29.95 monthly account fee, they charge a 1% fee on crypto trades and $50 over spot for gold. Fees do not scale based on the size of assets.

The monthly fee covers the following services:

  • IRA setup
  • Facilitation of transfers to your IRA
  • Preparation of IRS and tax reports
  • Institutional custody partners with unlimited storage
  • Platform support and maintenance
  • 24/7 trading with orders settled in 5 minutes

Minimum Investment: $2,500 minimum to begin, plus $1,000 in a subsequent deposit

Trade Minimum: $30

What cryptocurrencies do they offer?

  • Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple, Stellar, Polkadot, Chainlink, Cardano, Uniswap, Sushi, Compound, Yearn Finance, Polygon, EOS

Security Features:

  • Insurance:
    • $50 million insurance policy from Munich Re
    • Total insurance up to $370 million including policy with Coinbase Custody and Curv

  • Custody: Digital assets are secured by Coinbase Custody

Are there any downsides?
iTrustCapital does not have any financial advisors on staff, and users with smaller accounts may find the monthly fee and minimum contribution costly.

2. Bitcoin IRA: Best for Convenient Rollovers

Founded in 2016 and first to offer crypto IRAs, Bitcoin IRA offers more than just Bitcoin. It allows users to invest in a range of cryptocurrencies to fund their retirement accounts.

Opening an account is easy and takes just a few minutes, and their trading platform is accessible to new or experienced traders.

Trading is available through the web or their mobile app, and can begin within 3-5 days of account funding. They offer 24/7 trading so you won't miss out on shifts outside of market hours.

In addition to their Bitcoin IRAs, they also offer a Bitcoin 401(k). Users can earn interest up to 6% by lending their assets, and supplement their crypto accounts with investments in gold. Users have access to live customer service representatives and a range of educational resources.

Minimum Investment: $3,000, or $100 a month through their Saver IRA via linked bank account

What cryptocurrencies do they offer?

  • Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, Ethereum Classic, Zcash, Stellar Lumens

Security Features:

  • Insurance: Digital assets are insured by BitGo Trust for up to $100 million
  • Cold Storage: Coins are stored safely offline
  • Encryption: 256-bit SSL Encryption

Are there any downsides?
Their fees are less than transparent. Third-party sources suggest that the initial investment will incur a 10% - 15% fee depending on the size, and accounts will be subject to a $240 annual custodial fee, $75 asset conversion fee, 5% purchase fee, and 1% sell fee.

3. BitIRA: Best Security

Established in 2017, BitIRA is a crypto IRA with the security of your coins in mind.

They offer dollar-for-dollar insurance on users' accounts and coins are stored offline in grade-5 guarded nuclear bunkers with round-the-clock protection, making it a top pick for security-focused investors.

Their customer service caters to those who are new to crypto trading, so even beginners can take advantage of the potential rewards of a crypto IRA.

They offer traditional, Roth, SEP, and SIMPLE IRA accounts.

Minimum investment: $5,000

What cryptocurrencies do they offer?

  • Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Bitcoin Sv, Zcash, Stellar Lumens

Security Features:

  • Insurance: Dollar-for-dollar insurance policy
    • $1 million consumer protection insurance policy against internal fraud or theft
    • $1 million cybersecurity policy
  • Cold Storage: Coins are stored safely in a guarded vault
  • Encryption: Multi-encryption encoding on transactions
  • Multi-factor Authentication
  • Custodial Partnerships: Equity Trust Company and Preferred Trust Company.

Are there any downsides?
The starting contribution is quite high. Users are forced to open accounts through a digital currency specialist.

Their fees are unlisted, but they are reported to include a $50 setup fee, $195 annual maintenance fee, and 0.05% storage fee per month, which may eat into potential profits.

4. Coin IRA: Best Customer Service

A subsidiary of Goldco, which deals in precious metals, Coin IRA is a customer service-oriented crypto IRA founded in 2017. Investors make buy and sell orders via an account professional.

Working with multiple exchanges to facilitate crypto trading, they've also partnered with a number of crypto wallets and custodians to ensure the safety of user coins.

Their website provides a range of educational information about the rules of owning a crypto IRA in their Ultimate Guide to Cryptocurrency Investing, as well as the latest crypto prices.

Their handholding approach ensures that customers should have no trouble opening and managing their accounts.

Account Minimum: $20,000, or $3,500 if funds are transferred from a non-IRA account

What cryptocurrencies do they offer?

  • Bitcoin, Ethereum, Ethereum Classic, Chainlink, Dash, Litecoin, Stellar Lumens, Zcash

Security Features:

  • Cold Storage
  • Hard Wallets

Are there any downsides?
The account minimum is quite high at $20,000, putting it out of reach of some investors. Their fees are unlisted but have been reported to include a $50 setup fee, $195 annual maintenance fee, and .05% monthly storage fee.

5. Broad Financial: Best for Experienced Investors

Broad Financial offers crypto IRAs with checkbook control, a feature for experienced investors who want to take the most control over their investments. Besides cryptocurrency, their IRAs support precious metals, real estate, and private stock.

When you sign up for an account, they create a business entity, an IRA LLC, with its own checkbook, which can then be used to make purchases toward the IRA account.

Since you are in control of your purchases, you can buy a much wider range of cryptocurrencies than those supported by most crypto IRAs.

They offer flat fees rather than percentages of holdings, meaning those who invest more won't suffer for it, but those with smaller accounts will spend a higher rate proportionally.

They offer IRAs and Solo 401(k)s for the self-employed.

Account Minimum: $0

What cryptocurrencies do they offer?
Since you have checkbook control, that is up to you.

Security Features:
Security is up to the account holder.

Are there any downsides?
The setup fee for their IRA with checkbook control is significant, at $1,295, in addition to an $80 quarterly maintenance fee and a $300 annual fee.

Storage of your coins is up to you, meaning they aren't covered by insurance, and you'll need to acquire your own hot or cold wallet.

6. BlockMint: Best for Hands-Off Investing

For those new to the world of crypto, BlockMint, backed by Lear Capital, provides a useful service in a crypto IRA: they'll choose a portfolio of cryptocurrencies to invest in.

Their advisors will try to help you make the best investing decisions, even if you don't know a single cryptocurrency besides Bitcoin.

They're accessible online or by phone, meaning even the tech-illiterate can invest in crypto, and they'll assist with any IRA or 401(k) rollovers to your new crypto IRA.

Account Minimum: $10,000

What cryptocurrencies do they offer?

  • Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash, Ethereum Classic

Security Features:

  • Cold Storage

Are there any downsides?
In exchange for offering a hands-off approach, BlockMint charges quite high transaction fees at 15% per trade. They also charge a 2.5% purchase and 1% sell fee, $195 annual maintenance fee, and 0.05% monthly storage fee, paid to Equity Trust, the account custodian.

How Does a Crypto IRA Work?

Crypto IRAs let you buy and sell cryptocurrencies like Bitcoin, Ethereum, and Ripple in the same way that you would buy stocks, bonds, and mutual funds to build a retirement account using a traditional brokerage.

For legal U.S. residents, opening an IRA requires a Social Security number and personal information. There are no rules about when you can open an IRA, but there are limits to how much you can contribute annually to your accounts set by the IRS.

Balances held in existing IRAs, Roth IRAs, 401(k)s, and other retirement accounts may be able to be rolled over into a crypto IRA at your discretion.

Your taxation will depend on the type of account you choose. Pre-tax dollars are used to fund Traditional IRAs, meaning that taxes are deferred until the time at which you choose to make your withdrawals, while contributions to Roth IRAs are made with post-tax dollars and withdrawals are tax-free.

Looking to earn returns on your crypto that you can use sooner than retirement? These crypto savings accounts offer impressive rates and helpful features.

Are Crypto IRAs Safe?

While crypto IRA providers will naturally do their best to keep your coins, cash, and personal information safe, there are still risks with investing in crypto.

The cryptocurrency market is new, and it's volatile. Some investors have seen incredible returns by investing in Bitcoin and other coins before they gained widespread adoption.

But there are plenty who made bad investments as well. Given how quickly the crypto market changes, it's impossible to predict what any asset will be worth in a month, let alone 10 or 30 years.

The only potential antidote to this risk is research. Make informed decisions as best as you can, and if you consider the risk too great, it might be worth going with a more tried and true investment option.

Beware of Scams: As crypto IRAs grow in popularity, you'll have to watch out for scams. Avoid any investment opportunities calling themselves "IRS-approved" or "IRA-approved". And be extremely wary of anyone offering you investment advice or guaranteed returns. No one knows what the future holds for crypto, and there are no guarantees.

Bottom Line

When it comes to choosing a crypto IRA, there are a lot of things to consider. Fees are high on the list. Those with smaller accounts may opt for percentage-based rates and low minimums, while those able to make more significant initial investments might prefer flat rates.

In the world of crypto, security is an important factor as well, and a number of the custodians listed above provide excellent security for your peace of mind.

For those interested in trading a wide range of currencies, seek out a platform with an extensive list or checkbook control, as many providers' offerings are limited to the most popular coins.

Regardless of your preferences, with a wealth of excellent options out there, you're sure to find a crypto IRA that's right for you.

Jeremy Harshman is a protector of art and writing at CreditDonkey, a crypto comparison and reviews website. Write to Jeremy Harshman at jeremy.harshman@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Read Next:

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