Before You Open an Ira Account, Ask These Questions

IRAs (Individual Retirement Accounts) are great ways to invest for you retirement due to the tax advantages you receive when investing your money into an IRA account rather than with a non-retirement account.  Roth IRA accounts can be opened at many different financial institutions, making it convenient for investors.  However not every financial institution is created equal.  Also each individual investor has their own personal needs.  Therefore it pays to do some upfront research before investing.  Before you open a Roth IRA account or make any other type of investment, you should make an assessment of your investment needs and investing style first.

Things To Look For Before Opening an IRA Account

Many brokerages and financial institutions offer IRAs.  This includes brokerages such as Edwards Jones and Merrill Lynch, banks, online discount brokerages like TradeKing, E-Trade and Scottrade, and mutual fund companies such as T. Rowe Price, Fidelity and Vanguard, as well as certified financial planners.  What you will want to do is identify the financial institution for opening your IRA account that meets your individual investment needs the best.

If you would like to be able to have face-to-face interactions you may want to open your account with a full service brokerage that has a local office.  That way you can discuss face-to-face your individual investment needs.  On the other hand if you are a person who prefers an investment approach that is more hands-on, you may want to open your account with a mutual fund firm.  This allows you to invest in a wide array of mutual funds as well as other types of investments.  You may also want to consider opening an account with one of the online brokerages.  This will allow you to make low cost individual stock trades.  Or if you would like a combination of features, a company such as Scottrade is one you might want to consider.  They offer discount online brokerage and have individual local branches as well where you are able to meet with brokers face-to-face for discussing your investment goals and needs.

Before you open an IRA account, here are some questions you should ask first:

• Do you have minimum contributions?
• Do you have minimum initial investment amounts for opening an IRA account?
• What kinds of fees do you charge and what are the amounts?
• Do you offer automatic contribution options?
• Are any of your fees waived if you receive electronic statements or maintain a minimum account balance
• Which types of investment options do you offer?  Mutual funds, bonds, stocks, CDs, ETFs, Other?

Most of the answers to these questions you can probably obtain online, with the exception of an IRA account opened with a financial planner.  They may not have the information available online.  If you can’t find the information online, call the financial institution.  Before you open an IRA account, ask them to send you an information packet.  Make sure to review fees and all other details before you open an IRA account to ensure you understand their free structure and any other expenses you might have to pay.

In most cases, you should go with the broker or company that you feel the most comfortable with.  If later you aren’t happy with the financial institution that your IRA account is with, you will be able to transfer your IRA to another financial institution.  Brokers will be happy assisting you with the paperwork.