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Investing in precious metals may be an effective way for investors to diversify their portfolios while protecting against inflation.
Working with a company such as American Federal Rare Coin and Bullion gives investors access to a variety of products that fit their needs, budgets, and investing timelines.
This company also offers a variety of coins that can be held in an IRA where they can grow tax-free for years or decades to come.
Before we get started, investing your savings is a serious task. When it comes to adding precious metals to your portfolio, how do you know which companies to trust?
That is why we have researched every company in the industry and selected the very few with the highest customer service standards.
This way you can easily compare the best companies in the business, and choose one that fits your needs and investment goals.
Read the list to see if American Federal Rare Coin and Bullion Review passed our strict customer service standards to become one of our top recommendations.
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What Is American Federal?
American Federal is a coin dealer based in Arizona that buys, sells, and appraises gold and other precious metals. Those who are looking to sell their gold can get a free appraisal with no obligation to actually liquidate their holdings.
The company also offers a gold IRA, which can help investors protect and grow their capital throughout their working lives. The company will provide assistance in setting up the IRA as well as ensuring that gold held inside of the account is stored properly.
History of American Federal
American Federal was founded by Nick Grovich in 1985, and he is still the owner and president of the company. The company has grown to become one of the most recognized gold dealers in the state and is one of two in Arizona that is authorized by the Certified Acceptance Corporation (CAC) to use its services.
Over the past four decades, the company has become known for its transparency, product quality, and overall customer service.
What Customers Say About American Federal
According to Trustpilot, the company has a 4.9 rating based on 221 reviews. Of those 221 reviews, 96% gave the company either four or five stars, which are the two highest ratings available.
For the most part, clients were pleased with their ability to quickly get in touch with a customer service representative when they had questions about their accounts or needed advice about the products the company offers.
It is worth noting that any information provided by members of American Federal should not be construed as a formal recommendation to buy or sell anything. Instead, those who have questions about how to manage their portfolios are encouraged to talk to their financial advisers.
Who Runs American Federal?
Nick Grovich is a noted coin and history aficionado who has written several books about the two subjects. He is also a numismatist, which is a fancy way of saying that he knows a lot about coins and coin collecting.
Don Gause has been the vice president of the company since 1986 and is also a numismatist. His primary responsibilities are to stay on top of market trends, price coins and generally advise clients as to how they can adapt to changing economic conditions.
Michele Sapero has been the company's Chief Financial Officer (CFO) since 2011 and has a background in consulting and human resources. Her background allows her to ensure that the company runs efficiently, which means that it can keep costs to a minimum without sacrificing customer service.
Jill Lee is the inventory manager for American Federal, and it is her job to ensure that any coins the company sells are in compliance with IRS and other industry standards. She has been with the company since 2012 and is also responsible for making sure that orders are filled and shipped in an accurate and timely manner.
How to Sign Up for an Account
There are a few steps that prospective clients need to take to create a precious metals IRA. The first step is to find a custodian that will oversee a self-directed IRA and take care of the administrative tasks associated with the account.
These tasks typically include submitting reports to the IRS, state tax authorities, and other parties. A custodian will also submit statements to clients that can be used by those wishing to write off certain expenses on their tax returns.
It's important to note that a custodian does not provide financial or legal advice, and any fees that it charges are simply for account maintenance and compliance services.
Before buying gold coins or bullion, the account will need to be funded. Typically, individuals will withdraw money from an existing IRA and then put it into their new accounts. However, it may be possible to fund an account with money in a bank account or from other sources. In 2023, individuals under the age of 50 can contribute up to $6,500 to an IRA.
After the account has been funded, gold can be purchased and shipped to a holding facility. The folks at American Federal can walk clients through the entire process and may also be able to complete some or all paperwork associated with doing so on a client's behalf.
It's critical to understand that gold that is purchased for an IRA cannot be stored at a client's home or another private residence. At a minimum, it must be held in a safe deposit box at a local bank, and it's generally a good idea to make deposits in the name of the IRA.
Although it may be less expensive to hold gold in a safe deposit box, there is no guarantee that it will be stored or monitored as well as it would in a dedicated gold holding facility.
An Overview of Their Products
American Federal offers a variety of products that are designed to qualify for tax-advantaged status within a gold IRA. To qualify, a gold coin or bar must be 99.5% pure and be mined or refined by a company that is approved by COMEX, NYMEX, or similar companies. Gold bars may also be subject to weight requirements while coins may be subject to packaging and quality requirements.
Most gold coins that are produced by the United States government will meet these specifications. On American Federal's website, customers can purchase an American Eagle coin that is in brilliant uncirculated condition.
The company also offers American Buffalo coins that may or may not qualify for inclusion in an IRA depending on their exact specifications.
Customers can also purchase Canadian Maple Leaf, Australian Kangaroo, and Australian Gold Philharmonic coins that typically qualify for inclusion in a gold IRA. Finally, it may be possible to buy coins from China and other parts of the world.
Gold bullion is also available for those who aren't interested in collectible pieces. As a general rule, the gold used to produce bullion is worth the same as the gold used to make collectible pieces.
The main reason why investors buy collectible pieces is that they may have greater room for price appreciation because of the sentimental value that some may attach to them.
Those who are interested in diversifying their portfolios even further might also be interested in the silver and platinum bars, coins, and bullion offered by American Federal. Although silver is generally less valuable than gold, it does have the potential for significant price appreciation over several years or decades.
Those who wish to include silver or platinum in their IRAs will need to abide by quality, weight, and other standards. For instance, it must be 99.9% pure and be produced by NYMEX, COMEX, or other refiners.
Does American Federal Have a Buyback Policy?
American Federal does buy scrap gold as well as gold sold by other dealers. Those who wish to liquidate items that were purchased through American Federal may be able to do so at the current spot price.
According to the company's website, a product belongs to the customer as soon as a purchase has been made, and the price is locked in at the time the purchase is complete.
Therefore, a buyer can lose money even if an item is sold back to American Federal within hours or days of an initial transaction.
It may also be possible to trade gold coins or bullion that were purchased through American Federal. A trade may be an easy and convenient way to reallocate a portfolio without necessarily triggering a taxable event. Anyone who wishes to sell or trade gold or other precious metals is encouraged to speak with their financial adviser before doing so.
American Federal Fees
Anyone who would like to learn more about American Federal fees is encouraged to contact the company directly as there is little information about this topic on the company's website. However, there are links to contact the firm by email, phone, or through social media channels.
However, the company does mention that shipping is free for orders of more than $5,000 and that there are no minimum purchases required. American Federal does offer CAC grades at no additional fee beyond what the CAC itself charges for this service.
Although the fee structure was not made available online, customers should expect to pay storage and delivery insurance fees. Customers may also be charged a dealer markup beyond the current gold spot price whenever they buy a coin or bullion from American Federal.
Account creation fees will likely be charged by a custodian that typically ranges from $50 to $150. Annual account maintenance fees may either be charged as a flat rate or as a percentage of your account balance.
For example, if a customer was charged a fee equivalent to 1% of an existing balance of $10,000, that customer would pay $100 per year. Custodians may waive some or all of their fees depending on how much a client has in his or her account.
Buying gold from a company such as American Federal may ensure that any products held inside of an IRA will retain their tax-advantaged status. If the IRS has reason to believe that the rules aren't being followed, it could disallow a transaction.
This means that an individual might be liable for capital gains taxes on a given item when it is sold. Furthermore, the funds used to make a purchase may be reclassified as taxable income if it was made using pre-tax dollars.
However, in conjunction with a financial adviser and custodian, American Federal may be able to minimize the risk of making errors that could result in losing thousands of dollars that might be needed in retirement.
Ultimately, while we think American Federal is a decent company, we also think there are much better options for precious metals investors.
Remember to read out list of the Top Gold Companies to see if American Federal Rare Coin and Bullion Review made the cut.
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