Allocated vs Unallocated Precious Metals

What each term actually means

The London Bullion Market Association defines the two terms directly. An allocated account holds metal that is physically segregated at the vault with a detailed list of bar weights and assays. The client has full title to that metal, and the dealer holds it on the client's behalf as custodian (source: LBMA Precious Metals Glossary, entry on Unallocated and Allocated Accounts, checked July 2026).

An unallocated account, by the same LBMA definition, represents a general entitlement to a quantity of metal without specific bars assigned to the client. The LBMA explicitly compares it to a bank currency account: you hold a claim on the balance, not on any specific note or coin. This is the standard wholesale London settlement form for over-the-counter bullion trading.

International Depository Services Group publishes the same distinction in retail language. On its allocated and segregated storage page, IDS writes that metal held as allocated is owned by the investor. The metal is then stored under a safekeeping or custody arrangement. IDS writes that unallocated metal is the property of a bank and may not be safe if the bank becomes insolvent. IDS states in the same paragraph that it does not offer unallocated storage.

Two overlapping distinctions can confuse Texas readers on the sales call. Allocated vs unallocated is the legal ownership question: do you own specific bars, or a share of a pool. Segregated vs commingled is the physical arrangement question inside the allocated category: are your bars physically separated in a private position, or held in a shared vault position with other allocated clients' identical bars. Both distinctions matter, and they do not mean the same thing.

Why unallocated is a paper claim on a bullion bank

The mechanics behind unallocated storage explain the risk. When a client deposits or buys metal on an unallocated basis with a London bullion bank, the metal enters the bank's own inventory pool. The bank records a liability to the client for the ounces owed and typically funds itself by lending or leasing that metal into the wholesale market.

The result: the client is an unsecured creditor of the bank on the amount owed. If the bank fails, the client stands in line behind secured creditors and depositors covered by the relevant scheme. The 2013 gold price drawdown and periodic stress episodes since have kept this counterparty question on the table for any reader thinking about long-hold retirement metal.

Allocated title works in the opposite direction. Under a bailment or custody agreement, the metal never sits on the depository's balance sheet; it remains the property of the client (or the client's IRA custodian on the client's behalf). A depository insolvency does not turn allocated metal into a general creditor claim, because it was never the depository's asset in the first place.

This gap is why every serious retail educational source, from the LBMA glossary to IDS Group's own storage page, presents allocated as the retirement-appropriate form and unallocated as a wholesale trading account. Fifty years of inflation cycles and periodic bank stress episodes have made this the settled position on physical metal held for long-hold retirement purposes.

Why allocated fits IRC 408(m) and unallocated typically does not

Internal Revenue Code section 408(m) sets the rules for what a self-directed IRA can hold in precious metals. The statute requires the physical metal to be held by a bank as defined in section 408(n) or by an IRS-approved non-bank trustee (source: 26 U.S.C. section 408 via Cornell Legal Information Institute, checked July 2026). The metal must be IRA-eligible bullion under the fineness rules in 408(m)(3).

IRS Publication 590-A does not use the words allocated or unallocated. The statute focuses on qualifying custody, not on the internal accounting model. In practice, reputable United States IRA depositories interpret the requirement as an identifiable physical position under the client's IRA on the vault's books, with a receipt trail and an insurance policy attached to that specific position.

An unallocated arrangement fails that interpretation for two reasons. The client does not hold title to specific bars, so there is no identifiable physical position for the IRA custodian's audit trail. The metal sits on a bullion bank's balance sheet as an inventory-and-liability pair, so the client's position is a contract claim rather than a custody position.

The practical outcome: on every Texas gold IRA paperwork stack I have reviewed for this cluster, the depository election is allocated by default, and the sub-election is either segregated or commingled inside that allocated category. Unallocated does not appear as an option at Delaware Depository, Brinks Global Services USA, IDS Group, CNT Depository, Texas Precious Metals Depository, or the state-run Texas Bullion Depository.

What every Texas-relevant IRA depository actually offers

Not every reader realizes how narrow the actual menu is at IRA-approved United States depositories. The table below reflects the storage title categories each Texas-relevant depository offers for retirement metal, based on public materials as of July 2026.

Reading the table: unallocated is a wholesale London market product, not a United States retirement product. Every reputable IRA depository serving Texas readers offers allocated title. The remaining question, on which allocated sub-election to make (segregated or commingled), is a separate physical-arrangement decision covered on the sibling segregated vs commingled storage page.

Annual allocated storage line by depository

Since unallocated is not on the menu, the practical decision at intake is which allocated-title depository to use, and whether to layer a segregated sub-election on top. The chart below plots the published depository storage line at a 100,000-dollar Texas gold IRA balance for each of the six depositories most commonly named on Texas paperwork.

Two patterns stand out. The dollar range at 100,000 dollars runs from 100 to 500 dollars per year on the vault line alone, before the custodian account fee or the dealer coin premium. That is a five-times spread across allocated-title options at the same balance, driven by whether the depository publishes a flat pass-through or a percentage-of-balance tiered rate.

The second pattern is that the two Texas-soil options (Texas Precious Metals Depository and the state-run Texas Bullion Depository) sit at the top of the range because both use a percentage-of-balance schedule. The dollar figure at the Texas Bullion Depository is a retail non-IRA reference from the state schedule effective April 1, 2026; the IRA-specific fee is negotiated per account between the dealer, the custodian, and the depository contractor LSTA.

How to confirm allocated title on your Texas gold IRA paperwork

The confirmation happens at three points on the account-opening flow: the depository intake form, the dealer's buy instruction, and the IRA custodian's first receipt. Missing any one of the three creates a paperwork gap you may not notice for years.

1. Ask the depository intake form for the legal category in writing. Delaware Depository, IDS Group, and the Texas Bullion Depository name allocated title or a bailment / custody structure directly on their storage pages. Ask your IRA custodian to send you the intake form section that states the legal category before you sign anything.
2. Read the storage election line on the buy instruction. The dealer prepares a buy instruction that names the coins or bars, the price, the depository, and the storage election. The election line should read "allocated" or a sub-election like "fully segregated" or "commingled" that sits inside the allocated category. If the line says "unallocated," pause and ask for a correction in writing before wiring funds.
3. Match the first depository receipt to your IRA account name. Once the dealer ships and the depository confirms receipt, the receipt should name your IRA custodian for the benefit of your account and identify the specific bars or coin quantity. Ask the custodian to send you a copy of that receipt in writing so your records match the vault records.
4. Confirm the insurance policy covers allocated metal at replacement value. Lloyds-underwritten all-risk policies at Delaware Depository, IDS Group, Texas Precious Metals Depository, and the Texas Bullion Depository cover allocated metal at replacement value. Ask for the specific policy limit, the underwriter name, and the named exclusions in writing through your custodian before the first buy.
5. Reconfirm the legal category on the annual statement. Each year, your IRA custodian sends a Form 5498 recording the fair market value of the account and confirms the depository on file. Cross-check that document against the depository's own year-end statement so both records agree on the storage category and the physical position.

Estimate your annual carrying cost

Use the calculator below to enter your planned rollover balance and see the estimated annual carrying cost of your Texas gold IRA. Enter the allocated storage line from the quote you are actually being offered, plus the custodian account fee and any additional recurring lines. Verify every number in writing before you sign paperwork.

Worked example: an Austin resident using the Texas Bullion Depository

When either category is a bad fit

Frequently asked questions

Written by Harry's Coins Editorial. Reviewed July 2026 against live and archived sources cited above.