We all know what FDIC is – but does it protect IRAs? In short – only until your cash is invested, as the FDIC does not insure investments. However, at IRA Financial, we ensure that FDIC insurance will apply to cover your deposits until they are invested. Adam explains the ways IRA Financial can help you stay under the insurance threshold, and how we ensure the banks we work with are low-risk for your cash.

If you’re interested in hearing more about your options, we encourage you to contact our amazing tax professionals at IRA Financial. Thanks for watching!

—
Learn more about keeping your SDIRA LLCs in IRS compliance:
—
Discover more videos by IRA Financial:

Subscribe to our channel:
—
About IRA Financial:

IRA Financial Group was founded by Adam Bergman, a former tax and ERISA attorney who worked at some of the largest law firms. During his years of practice, he noticed that many of his clients were not even aware that they can use an IRA or 401(k) plan to make alternative asset investments, such as real estate. He created IRA Financial to help educate retirement account holders about the benefits of self-directed retirement plan solutions.

IRA Financial is a retirement account facilitator, document filing, and do-it yourself document service, not a law firm. IRA Financial Group does not provide legal services. No attorney-client relationship exists between Client and IRA Financial, its management, salespersons or IRA Financial’s in-house legal counsel. IRA Financial Group provides IRA retirement facilitation service and CANNOT provide Client with legal, investment, or financial advice. Prior to making any investment decisions, please consult with the appropriate legal, tax, and investment professionals for advice.

IRA Financial is not engaged in rendering legal, accounting or other professional services. If legal advice or other professional assistance is required, the services of a competent professional person should be sought. (From a Declaration of Principles jointly adopted by a Committee of the American Bar Association & a Committee of Publishers and Associations.). The scope of Professional Services does not include the costs of any custodian related services.

Learn More: …(read more)

LEARN MORE ABOUT: IRA Accounts

TRANSFER IRA TO GOLD: Gold IRA Account

TRANSFER IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

Are Self-Directed IRAs FDIC Insured?

When considering retirement savings options, many individuals turn to Individual Retirement Accounts (IRAs) as a potential investment vehicle. While traditional IRAs and Roth IRAs are relatively well-known and widely discussed, another type of IRA called a self-directed IRA sometimes flies under the radar. Self-directed IRAs offer investors greater control and flexibility over their retirement funds, allowing them to invest in a broader range of assets beyond traditional stocks, bonds, and mutual funds. However, one question often arises concerning the safety of self-directed IRAs: are they FDIC insured?

To answer this question, we first need to understand what the FDIC is. The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that was established in 1933 during the Great Depression. It was created to restore trust in the nation’s banking system and protect depositors from losing their money in the event of a bank failure. The FDIC insures deposits in banks and savings associations up to the maximum limit of $250,000 per depositor, per insured bank. This coverage extends to traditional bank products such as checking and savings accounts, certificates of deposit, and money market accounts.

However, it is essential to note that the FDIC does not cover investments made through self-directed IRAs. This is because self-directed IRAs provide investors with the ability to invest in a wide array of assets, including real estate, precious metals, private company stocks, and more. These alternative investments are not typically held at banks and are therefore not covered by the FDIC.

While self-directed IRAs do not receive FDIC insurance, it is worth mentioning that they are still protected under certain regulations and safeguards. The Internal Revenue Service (IRS) sets specific guidelines for self-directed IRAs, and custodians of these accounts must adhere to those guidelines. Custodians are responsible for administering the accounts, holding the assets, and ensuring compliance with IRS regulations.

Additionally, certain asset types held within self-directed IRAs may have their own protections. For example, if you invest in real estate through a self-directed IRA, the property itself has its own inherent value and legal protections. Precious metals investments may come with different insurance options or be held in secure vaults. However, it is crucial to conduct thorough research and consult professionals before making any investment decisions within a self-directed IRA.

To summarize, self-directed IRAs are not FDIC insured due to the wide range of investment options they offer. While this may concern some individuals seeking the higher level of security provided by FDIC insurance, it is essential to remember that self-directed IRAs offer unique opportunities for diversification and potentially higher returns. Like any investment, there are inherent risks involved, and careful consideration should be given to asset selection and due diligence.

Before establishing a self-directed IRA, it is highly recommended to consult with financial advisors or other professionals who specialize in retirement planning and self-directed accounts. They can guide you through the process, help you understand the risks involved, and provide insights into the specific regulations and protections applicable to self-directed IRAs. By obtaining proper guidance and conducting thorough research, investors can make informed decisions about their retirement savings while maximizing the potential benefits of self-directed IRAs.