Review of BitCoinIRA and BitIRA – for moving my IRA to BitCoin
I thought this process was going to be an easy “no-brainer”. But after a call from their support, or perhaps better dubbed sales person, I learned about the hidden fees and “the rules”.
I started by filling out form onBitCoinIRA.com.One of their options was an “investment mix” where you theoretically split up your investment among the six coins they support: 1) BitCoin, 2) Ethereum, 3) Ripple, 4) LiteCoin, 5) BitCoin Cash, and 6) Ether Classic. But later, as you will see below, I learned this wouldn’t work.
This included downloading a PDF, having to sign it, then upload it. It was called a “Account Transfer”. I actually called them first, to ask a question about the beneficiary. The guy I spoke to was very American, very professional, and almost no wait time. I was trying to figure out if I could make my own estate the beneficiary, instead of a specific person or persons. He checked, and said if it was a trust, but I don’t have a formal trust yet. After I got my question answered about the beneficiary, I got the data for my beneficiary (SSN and date of birth) and completed the form.
After all that hassle and sending them the first form, THEN he called back to explain their fees and limits.
- There is a 15% origination fee 9,
- 1% fee when you liquidate/cashout,
- 5% trading fee,
- Custodial fees of $20/month and 0.07% of your balance from the custodian, which is Kingdom Trading.
- And a big kicker, there is a minimum of $10,000 in any one coin. He said this is because they use GenesisTrading.com. This totally blew my investment mix based on the amount of the IRA I would be transferring.
NOTE: When you submit and sign their PDF document, that doesn’t really kick off the process. They send you another form, which I think he called a “Transfer Document”. I’m not sure how it’s different than the one I already signed. But they give you a chance to absorb their fee structure, then tell them if you wish to continue or not.
A follow up question I will ask is about early withdrawals. Sounds like I would always have to keep a minimum of $10,000 with them.
So then, I decided to check out their competition. The first one I had already seen wasBitIra.com,. Minutes after filling out the form on their site, their rep called me. He was also very professional and helpful. They have a similar 15% origination fee, said custodian fee is about $300/year (pegged at entry amount), and they use Preferred Trust. I think there is one other competitor. The kicker there was they wanted a minimum of $20,000; and he checked if they could go lower, and the answer was yes, but I would have to pay the 15% fee instead of having it come out of my IRA.
I’ll keep you posted as I learn more and make my decision. The alternative is to cash out, pay the IRS penalty, and have more freedom with the money. Later the same day, that’s exactly what I did. I figured if I’m going to have pay another company a 15% origination fee, and high trading fees, and not have control over how I allocate my tokens, it’s better to pay the IRS penalty and have the freedom.