Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

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MrRE
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Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

Hi all :happy

If you can, please recommend a bank or credit union

that you found really knows

how to handle Roth IRAs properly.


I find that my credit union doesn't understand the more complicated Roth rules.

And they give me misinformation on their website and help line.


So I want to switch to one more reliable and trustworthy in that sense.


Any such bank or credit union recommendations for Roth IRAs would be greatly appreciated.


Thank you :happy
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whodidntante
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by whodidntante »

I recommend that you keep your Roth IRA at a discount broker instead of a bank. You will have greater access to appropriate investments, less upsell pressure, lower fees, and access to competent customer service. Use Fidelity, or Schwab if you don't like Fidelity.
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retired@50
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by retired@50 »

whodidntante wrote: Sun Jan 09, 2022 11:48 am I recommend that you keep your Roth IRA at a discount broker instead of a bank. You will have greater access to appropriate investments, less upsell pressure, lower fees, and access to competent customer service. Use Fidelity, or Schwab if you don't like Fidelity.
+1

Regards,
This is one person's opinion. Nothing more.
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Nate79
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Nate79 »

A bank or credit union would be my last choice for a Roth unless you were specifically buying some special high yield CDs for your fixed income asset allocation. I would choose Schwab or Fidelity and invest at my asset allocation. Do you have an asset allocation target?
Katietsu
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Katietsu »

MrRE wrote: Sun Jan 09, 2022 11:41 am Hi all :happy

I find that my credit union doesn't understand the more complicated Roth rules.



Thank you :happy
What complicated rules do you need them to understand. Actual question. A bank is not responsible for giving tax advice. As long as the accept your contribution, correctly distribute your funds upon request and produce an accurate 2099-R, they are fulfilling their duties. A bank should not be giving individual specific tax advice at all.
Topic Author
MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

Nate79 wrote: Sun Jan 09, 2022 12:00 pm A bank or credit union would be my last choice for a Roth unless you were specifically buying some special high yield CDs for your fixed income asset allocation. I would choose Schwab or Fidelity and invest at my asset allocation. Do you have an asset allocation target?
Thanks. I'm already retired.

I just want to park the money for now and get some interest (like 0.5%),

and avoid complexity and fees.


I don't want to invest in the market at all for now.


All I want is a bank or CU that explains and manages the Roth IRA processes properly.


I am getting so much misinformation from my credit union and bank that I want to switch.

Even their web pages are wrong and people have pointed their errors out in comments a year ago and they still haven't updated their errors.


So any recommendations for trustworthy banks or credit unions for a Roth IRA would be appreciated.


I need one that has and gives accurate information on the Roth IRA processes.

Also one that is able to do non-typical processes like

a 60 day indirect-rollover-conversion from a 401k.


Thanks :happy
Topic Author
MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

Katietsu wrote: Sun Jan 09, 2022 12:50 pm
MrRE wrote: Sun Jan 09, 2022 11:41 am Hi all :happy

I find that my credit union doesn't understand the more complicated Roth rules.



Thank you :happy
What complicated rules do you need them to understand. Actual question. A bank is not responsible for giving tax advice. As long as the accept your contribution, correctly distribute your funds upon request and produce an accurate 2099-R, they are fulfilling their duties. A bank should not be giving individual specific tax advice at all.
Thanks. I totally agree with all of your points.

If I may, I prefer to keep this forum topic very specific and simple.

That's why I just requested some bank and CU recommendations.

After I get some, I'll look at the web sites and call their help lines to see if they are better.

Any recommendations would be greatly appreciated. Thanks :happy
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Vulcan
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Vulcan »

MrRE wrote: Sun Jan 09, 2022 12:54 pm Thanks. I'm already retired.
If you don't have any earned income, unless your spouse still works, you con't contribute new funds to an IRA.

That is one rule no bank will probably be going out of their way to explain to you.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
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retiredjg
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by retiredjg »

MrRE wrote: Sun Jan 09, 2022 12:54 pm I need one that has and gives accurate information on the Roth IRA processes.

Also one that is able to do non-typical processes like

a 60 day indirect-rollover-conversion from a 401k.
Like Katietsu, I'm a little bewildered about your question. The bank or CU just accepts the money and sends you forms at appropriate times. They don't give tax advice. They don't determine if you are eligible to contribute. They don't determine your taxes when you withdraw money.

There is nothing special about a 60 day rollover. They accept a check from you and some documentation from your 401k indicating that the amount on the check is eligible for rollover....and they put the money in your Roth IRA. Any custodian that offers a Roth IRA should be able to do that.

If you feel you are not getting reliable information from your CU, why not go to a different CU or bank where you live?
nalor511
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by nalor511 »

It's your responsibility to understand Roth rules, not your bank.
Topic Author
MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

retiredjg wrote: Sun Jan 09, 2022 2:59 pm
MrRE wrote: Sun Jan 09, 2022 12:54 pm I need one that has and gives accurate information on the Roth IRA processes.

Also one that is able to do non-typical processes like

a 60 day indirect-rollover-conversion from a 401k.
Like Katietsu, I'm a little bewildered about your question. The bank or CU just accepts the money and sends you forms at appropriate times. They don't give tax advice. They don't determine if you are eligible to contribute. They don't determine your taxes when you withdraw money.

There is nothing special about a 60 day rollover. They accept a check from you and some documentation from your 401k indicating that the amount on the check is eligible for rollover....and they put the money in your Roth IRA. Any custodian that offers a Roth IRA should be able to do that.

If you feel you are not getting reliable information from your CU, why not go to a different CU or bank where you live?
Thanks for your thoughts. :happy
I totally agree with all of the points you made above.

Regarding go-local, I have already made inquiries at my local banks and CUs where I live,
and unfortunately they all seem worse.

There are not many local bank or CU choices, in general, where I live unfortunately.

That's why I've used online banks and online CUs exclusively for many many many years.


With Roth IRAs, I'm finding my online credit union is not good at all. My online bank is just as bad.
- Poor call-center people who don't know what they are talking about.
- Poor website design. Misinformation. Missing information.
- Hidden fees and excessive restrictions.


I would really like to find a good bank or CU that has a well set-up, streamlined, Roth IRA process (good call-center and website, easy to do business with online).


For this Forum Topic, I'm simply hoping for a bank or CU recommendation.

I'd rather avoid a brokerage if at all possible.
I'm just trying to park a small amount of money for a while.
I just want to get a tiny interest like 0.5% and avoid brokerage fees and complexity.


I hope someone here can recommend a bank or CU for Roth IRAs based on their long-term experience.

Any suggestions would be appreciated. Thanks :happy
tomd37
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by tomd37 »

MrRE - Do you qualify for membership in any way with the Navy Federal Credit Union? You seem determined to deal with a bank or a credit union and NFCU is the largest credit union in the world. I have never used them for your purpose in the 61 years of my membership there.
Tom D.
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retiredjg
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by retiredjg »

A lot of people seem to use Ally bank. And Wells Fargo I think.

I have no idea - never had an IRA account at a bank or credit union. I have a mortgage at PenFed Federal CU but can't say I recommend them. Getting my mortgage there was worse than pulling teeth, but everything since then has been fine. But I've never needed anything...just get statements. Never called them.
mhalley
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by mhalley »

Remember that you can buy cds at the major brokerages, so you could park the Roth Money there, and when you decide to invest you will be able to. Will ditto everyone that says a bank or cu is the ABSOLUTE LAST PLACE to put a retirement account, whether it is a Roth or traditional or rollover from a 401k.
Katietsu
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Katietsu »

I would take one criteria off your list- I doubt you will find a call center employee anywhere who can help you with your indirect rollover from a traditional 401k to a Roth IRA. I have had accounts at more than a dozen banks and brokerages. I am not judging on the desirability just giving my opinion on what I think is realistic. I would put the typical in person bank office customer service person in that same category.

I read your question from December. My understanding is that you have funds that left a 401k in December 2021. You want the income to be on your 2021 return. If this is true, you will need to be very careful with how and who you choose to finish the conversion. I know that ETrade is not alone in prescribing that you first do the rollover to a traditional IRA then convert from the traditional IRA to the Roth IRA. Normally, I would recommend the two step process because it is just less stress. But if you follow the two steps, the $53,000 conversion will end up on your 2022 tax return not 2021.

I would consider trying to do this in person if possible. Do you have a local bank with a trust department? Can you get to a Fidelity, Schwab or ETrade office? Make sure it is clear that you need the funds to go right into a Roth even though they came from a traditional and that you know they tax consequences. You can later use a DIRECT transfer
to move institutions from one Roth IRA to another Roth IRA.

I disagree that a bank or CU is the last place for these funds. You have already decided just to park the money for now. A bank or CU is horrible place for investing but you said you are not interested in investing this now. So whatever is easiest, go with it.
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Nate79
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Nate79 »

Ally bank is used by a lot of people on here for savings accounts and they do the same in a Roth. Maybe a broker CD at Schwab or Fidelity?
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retiredjg
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by retiredjg »

Katietsu wrote: Sun Jan 09, 2022 5:42 pm I read your question from December. My understanding is that you have funds that left a 401k in December 2021. You want the income to be on your 2021 return. If this is true, you will need to be very careful with how and who you choose to finish the conversion. I know that ETrade is not alone in prescribing that you first do the rollover to a traditional IRA then convert from the traditional IRA to the Roth IRA. Normally, I would recommend the two step process because it is just less stress. But if you follow the two steps, the $53,000 conversion will end up on your 2022 tax return not 2021.
I agree. The money became taxable in 2021 when it left the 401k plan in 2021 because it left as a distribution directly to MrRe. It did not leave the 401k as a rollover.

Nothing will change the fact that it is a 2021 taxable distribution...unless the money ends up in a tIRA within 60 days...at which point it would become untaxable because it was rolled over within 60 days. If converted after that, it would be taxable in 2022. That involves not ony an extra step but I don't think it is what MrRE wants.

This is what Alan S was saying in his posts in the other thread.
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

tomd37 wrote: Sun Jan 09, 2022 5:10 pm MrRE - Do you qualify for membership in any way with the Navy Federal Credit Union? You seem determined to deal with a bank or a credit union and NFCU is the largest credit union in the world. I have never used them for your purpose in the 61 years of my membership there.
Thanks tomd37 for the tip. I have looked into NFCU many years ago when they had the best CD rates anywhere.

I could apply but it would be very complicated. My Dad was in the Navy so I could be eligible but he doesn't have an NFCU account and I would need to prove he was in the Navy otherwise.

Anyway, like you implied, one would need to have used FNCU for Roth IRAs to know how good they are at that process.

Thanks again for the tip.
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tetractys
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by tetractys »

It sounds like you just need to put the Roth IRA money in a local institution with the highest rate Roth IRA account. It should be pretty simple to ask the rates and deposit to wherever seems best. Are they getting confused by the term Roth IRA and trying to funnel you into their boutique investment firm? I could see that happening.

I would think a CU could offer the best rate; but other than that I can’t say what CU would be best.
GuyInFL
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by GuyInFL »

Ally would probably be a reasonable choice.

https://www.ally.com/bank/ira/high-yiel ... lsrc=3p.ds

If you are putting in more than the FDIC insured limit of 250K, consider CDARS to stay insured.

https://www.investopedia.com/terms/c/ce ... ervice.asp
Topic Author
MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

retiredjg wrote: Sun Jan 09, 2022 5:12 pm A lot of people seem to use Ally bank. And Wells Fargo I think.

I have no idea - never had an IRA account at a bank or credit union. I have a mortgage at PenFed Federal CU but can't say I recommend them. Getting my mortgage there was worse than pulling teeth, but everything since then has been fine. But I've never needed anything...just get statements. Never called them.
Thanks for the tip retiredjg. :happy

I'll look into Wells Fargo more.

PenFed I used to have an account but they are not as competitive as they used to be.

Ally Bank I already talked to. It didn't go well. I definitely want to go somewhere else.

Which reminds me to point out something very important about my Forum Topic concerns.

I recently went to a very popular online bank website, which I'd rather not name.
I looked at their Roth IRA webpages and found a lot of misinformation there.
I was very surprised that the bank had a comment section on those web pages.
Multiple commenters had posted complaints about inaccuracies in the bank's information.
Yet the bank had not corrected their obvious Roth IRA misinformation errors that were quite old on multiple webpages.
Nor did the bank respond about people's complaints about the inaccuracies the bank was providing about Roth IRA processes.

See that proves my exact point about this Forum Topic.
Even a very popular online bank who is really great otherwise, seems unable to be great at Roth IRA processes yet.



The main problem I have and the reason for the Forum Topic is:
Credit union and bank call-center people simply don't seem to be trained properly on Roth IRA processes.
Also the process are poorly documented on their websites.
They especially don't seem to understand indirect Roth rollover conversions.



That's why I'm asking if anyone has had good long-term experiences with a bank or credit union that has shown they know what they are doing with Roth IRA processes.

I'm hoping someone here can recommend a bank or credit union with a properly-trained Roth IRA call-center and properly-documented online processes.

Any recommendations based on long-term experience would be greatly appreciated. :happy
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

tetractys wrote: Sun Jan 09, 2022 8:56 pm It sounds like you just need to put the Roth IRA money in a local institution with the highest rate Roth IRA account. It should be pretty simple to ask the rates and deposit to wherever seems best. Are they getting confused by the term Roth IRA and trying to funnel you into their boutique investment firm? I could see that happening.

I would think a CU could offer the best rate; but other than that I can’t say what CU would be best.
Thanks tetractys. You're right about all your points. And they don't understand indirect Roth rollover conversions also.

So I'm hoping someone can recommend a bank or CU based on long-term experience.
I need a recommendation from someone who found one with a good call-center and accurate online documentation for their Roth IRAs processes.
Topic Author
MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

GuyInFL wrote: Sun Jan 09, 2022 9:38 pm Ally would probably be a reasonable choice.

https://www.ally.com/bank/ira/high-yiel ... lsrc=3p.ds

If you are putting in more than the FDIC insured limit of 250K, consider CDARS to stay insured.

https://www.investopedia.com/terms/c/ce ... ervice.asp
Thanks GuyInFL :happy

You can see my comments about Ally above.

Thanks also for the CDARS tip. :happy

Usually to increase my insurance coverage if needed, I simply add beneficiaries to my accounts in the legally-required way and that increases the insurance coverage by law if done properly.

I calculate my increased insurance coverage as shown below:

- For FDIC insured banks I use this official government tool:
https://edie.fdic.gov/

- For NCUA insured credit unions I use this official government tool:
https://www.mycreditunion.gov/insurance-estimator
Topic Author
MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

Katietsu wrote: Sun Jan 09, 2022 5:42 pm I would take one criteria off your list- I doubt you will find a call center employee anywhere who can help you with your indirect rollover from a traditional 401k to a Roth IRA. I have had accounts at more than a dozen banks and brokerages. I am not judging on the desirability just giving my opinion on what I think is realistic. I would put the typical in person bank office customer service person in that same category.

I read your question from December. My understanding is that you have funds that left a 401k in December 2021. You want the income to be on your 2021 return. If this is true, you will need to be very careful with how and who you choose to finish the conversion. I know that ETrade is not alone in prescribing that you first do the rollover to a traditional IRA then convert from the traditional IRA to the Roth IRA. Normally, I would recommend the two step process because it is just less stress. But if you follow the two steps, the $53,000 conversion will end up on your 2022 tax return not 2021.

I would consider trying to do this in person if possible. Do you have a local bank with a trust department? Can you get to a Fidelity, Schwab or ETrade office? Make sure it is clear that you need the funds to go right into a Roth even though they came from a traditional and that you know they tax consequences. You can later use a DIRECT transfer
to move institutions from one Roth IRA to another Roth IRA.

I disagree that a bank or CU is the last place for these funds. You have already decided just to park the money for now. A bank or CU is horrible place for investing but you said you are not interested in investing this now. So whatever is easiest, go with it.
Thanks Katietsu :happy

I am confident that the 2021 withdrawal from my 401k resulted in a tax impact immediately when the money was removed from the 401k.

The check that I received was dated Dec 31 2021 and the attached note said the YTD taxable impact was in 2021.

So there is absolutely no doubt that the tax timing issue is already resolved as I hoped and expected and as others here have noted also.


Regarding using a bank or CU vs. brokerage,
I totally agree that for most people brokerages can have big advantages.
But I just want to park the money for now and get a tiny interest and low or no fees.
I want to keep it simple. Brokerages can be tricky also and can have fees that impact my present goals vs banks or CUs.

I might have to use a brokerage if I can't find a good bank or credit union to complete my Roth IRA indirect rollover conversion.

I hoping someone here can recommend a good bank or CU for my situation based on their long-term experience. :happy
Last edited by MrRE on Sun Jan 09, 2022 10:58 pm, edited 1 time in total.
Katietsu
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Katietsu »

MrRE wrote: Sun Jan 09, 2022 10:39 pm
Thanks Katietsu :happy

I am confident that the 2021 withdrawal from my 401k resulted in a tax impact immediately when the money was removed from the 401k.

The check that I received was dated Dec 31 2021 and the attached note said the YTD taxable impact was in 2021.

So there is absolutely no doubt that the tax timing issue is already resolved as I hoped and expected and as others here have noted also.
The year for the tax impact is not yet written in stone. If you deposit the funds into a traditional IRA within 60 days of December 31, the withdrawal becomes a non taxable rollover. If you then do a conversion to get it to a Roth, the tax impact will be in 2022.

It sounds like you prefer the income to be included on your 2021 tax return. Some banks will default to only putting money for a rollover from another institution into the same kind of account, re traditional or Roth. In fact, some banks will only do it this way. If that process happens, the $53,000 becomes taxable income for 2022. So, you will need to be careful or you could still turn your Dec 31 withdrawal into a tax year 2022 event.

Are you looking for a recommendation for an online bank? If you want brick and mortar recommendations or credit union recommendations, it would be helpful to indicate the state or region where you live.
Charon
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Charon »

MrRE wrote: Sun Jan 09, 2022 10:39 pm I hoping someone here can recommend a good bank or CU for my situation.
People have already recommended several. Most CUs are local/regional, and nobody can recommend one if we don't know where you live. Banks aren't responsible for teaching you Roth IRA rules. Repeating your question isn't going to yield different results.

I know you've made up your mind, but you might want to pay attention to those who are pointing out potential issues. Like a Roth is the last thing I'd put into cash, retired or not.
000
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by 000 »

Why are you putting CDs in a Roth?
muffins14
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by muffins14 »

Why such strong feelings against brokerages? You can invest in anything, including very safe bonds or just money market accounts. They will likely have better support or customer service than a small local bank
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Northern Flicker
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Northern Flicker »

What is your current credit union getting wrong? For IRAs in bank accounts, the normal differentiators are interest rates and fees. I have some trad IRA funds in a CD paying 2.65% at a local credit union. I would not bother with a Roth account for 0.5%.
Last edited by Northern Flicker on Mon Jan 10, 2022 6:12 pm, edited 1 time in total.
My postings are my opinion, and never should be construed as a recommendation to buy, sell, or hold any particular investment.
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celia
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by celia »

I spent about an hour looking for suitable banks and credit unions for you, but find that "the best" ones are more like ads. Banks and CUs usually just have checking accounts, savings accounts, loans, and credit cards. IRAs just don't end up there very often so you can't blame them for not being familiar with them.

Most places will also charge you IRA custodian fees which are more than the yearly interest you will earn. But this can often be avoided if you have other accounts with them, sometimes with other stipulations. So you need to look at the complete picture.

I read your other thread and think you should just dump the money in your existing Roth IRA. At least you will avoid new custodian fees. Also, you need to watch out for doing another INDIRECT rollover (check made out to you) within 365 days. The penalties are severe.

As far as your current bank or CU not explaining things to you clearly, I replied in your other thread, that I suspect this is a communication problem and they may not be understanding the terminology you use:
viewtopic.php?f=1&t=366131&p=6439760#p6439760
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
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David Jay
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by David Jay »

MrRE wrote: Sun Jan 09, 2022 9:54 pmThat's why I'm asking if anyone has had good long-term experiences with a bank or credit union that has shown they know what they are doing with Roth IRA processes.

I'm hoping someone here can recommend a bank or credit union with a properly-trained Roth IRA call-center and properly-documented online processes.
You keep repeating that you want us to recommend a bank or credit union to hold a Roth IRA and we keep saying that pretty much everyone here uses a brokerage account for Roth IRA accounts. There seems to be some kind of disconnect that we are not able to bridge.

Keep in mind that we are not recommending that you put any money in the stock market, just using a brokerage account for CDs, Treasury funds and other safe investments.
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Looking4Answers
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Looking4Answers »

You might talk to Discover Bank.
Northern Flicker
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Northern Flicker »

If you go to depositaccounts.com and select IRA rates from their menu, you can view the banks and credit unions offering the top rates for Roth IRAs, and can drill down to see what their fees are.

What information exactly do you think their call center should provide? Their job is to assist with opening, managing, or closing your account, not advising you on whether you are eligible for a Roth IRA, or whether a Roth IRA is right for you, although they may be able to help with some of that as well.
My postings are my opinion, and never should be construed as a recommendation to buy, sell, or hold any particular investment.
bradinsky
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by bradinsky »

It’s interesting that OP’s view of every credit union & bank is basically the same - they are all wrong & misinformed regarding Roth IRAs. Possibly, OP is the one who is confused or maybe wrong.
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retiredjg
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by retiredjg »

I think this may boil down to a difference in how bank/CU handle a rollover to Roth. The law no longer requires that you roll to tIRA and then convert to Roth IRA...at least not for brokerages. Maybe the rule is different for banks and credit unions? Or they just have old practices?

If that is the actual problem, this money may have to go to a brokerage if the money is to be taxed in 2021 instead of 2022.
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

David Jay wrote: Mon Jan 10, 2022 12:34 pm
MrRE wrote: Sun Jan 09, 2022 9:54 pmThat's why I'm asking if anyone has had good long-term experiences with a bank or credit union that has shown they know what they are doing with Roth IRA processes.

I'm hoping someone here can recommend a bank or credit union with a properly-trained Roth IRA call-center and properly-documented online processes.
You keep repeating that you want us to recommend a bank or credit union to hold a Roth IRA and we keep saying that pretty much everyone here uses a brokerage account for Roth IRA accounts. There seems to be some kind of disconnect that we are not able to bridge.

Keep in mind that we are not recommending that you put any money in the stock market, just using a brokerage account for CDs, Treasury funds and other safe investments.
Thank you David Jay :happy

When I created this Forum Topic,

I actually did anticipate that most people here would very strongly suggest "Use a brokerage!".

I almost was initially going to say "Please forego suggesting a brokerage". :happy

But I decided to let people say what they wanted to say.


I realize I can use a brokerage for many things besides the stock market.

It's just that, up to now, I haven't been able to find a reason to use a brokerage.

For me, they have higher fees and I'm not comfortable using almost any of their investments.

I'm learning though.


I have plenty of money. My main concern is holding on to it and keeping up with inflation.

So my plan is keep taking money out of my 401k and add it to my Roth IRA while my taxes are still low before social security kicks in.

And when I feel ready, then I might move the Roth IRA to a brokerage.

Right now, for me, I'm just not ready. I also don't trust them too.

Thanks for your kind explanations.
Freefun
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Freefun »

It’s not clear to me why a bank would be any safer than a brokerage. I use Schwab and they handled my rollover very easily. If it means anything, they also have a bank. IRAs are with their brokerage company. The bank is for checking accounts.

If you happen to be near a physical branch of Schwab or Fidelity you might want to go over and say hello and ask any questions you have. You might find them very helpful and possible address any fears or concerns you have.
Remember when you wanted what you currently have?
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

celia wrote: Mon Jan 10, 2022 3:21 am I spent about an hour looking for suitable banks and credit unions for you, but find that "the best" ones are more like ads. Banks and CUs usually just have checking accounts, savings accounts, loans, and credit cards. IRAs just don't end up there very often so you can't blame them for not being familiar with them.

Most places will also charge you IRA custodian fees which are more than the yearly interest you will earn. But this can often be avoided if you have other accounts with them, sometimes with other stipulations. So you need to look at the complete picture.

I read your other thread and think you should just dump the money in your existing Roth IRA. At least you will avoid new custodian fees. Also, you need to watch out for doing another INDIRECT rollover (check made out to you) within 365 days. The penalties are severe.

As far as your current bank or CU not explaining things to you clearly, I replied in your other thread, that I suspect this is a communication problem and they may not be understanding the terminology you use:
viewtopic.php?f=1&t=366131&p=6439760#p6439760
Thanks celia :happy

I totally agree with what you said about banks and CUs.

I also agree that for now I should just dump the money in my existing Roth IRA if I can get them to do it. Then later I can move the Roth IRA to a brokerage when I find one and when I know what I want to do there.

I totally agree about the communication challenges being part of the problem with the banks and CUs. Thanks for the link. I replied to your very helpful replies on the other thread. Fortunately I found that the 365 day rollover rule doesn't apply to rollovers from a 401k per the IRS so please see my reply in the other topic you linked above for details.

Thanks again :happy
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neurosphere
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by neurosphere »

MrRE wrote: Tue Jan 11, 2022 8:01 pm It's just that, up to now, I haven't been able to find a reason to use a brokerage.
I'm sorry, but everything you write implies the opposite. That you can't find any reason to use anything BUT a brokerage.

In many cases, banks have higher fees for many situations. In addition, you say that banks are not understanding you and give poor customer service, but it's hard to understand what services you are looking for and what you find lacking.

Respectfully, you're questions are so vague that it's impossible to give you any helpful answers. Everyone is trying to help understand you and your concerns. A lot of very smart, very experienced people have spent a lot of time working with you, yet you seem a little dismissive. If you can provide any details about what your concerns are, you are very likely to find amazing help and education here. You'll have to be receptive, however.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

retiredjg wrote: Tue Jan 11, 2022 12:23 pm I think this may boil down to a difference in how bank/CU handle a rollover to Roth. The law no longer requires that you roll to tIRA and then convert to Roth IRA...at least not for brokerages. Maybe the rule is different for banks and credit unions? Or they just have old practices?

If that is the actual problem, this money may have to go to a brokerage if the money is to be taxed in 2021 instead of 2022.
Thanks retiredjg :happy

It seems, after a bit of struggle, the credit union is willing to complete the rollover.

I was surprised that their Rollover Authorization form was similar to a brokerage form.

They did want to use a conduit tIRA though but I talked them out of that.

I think the biggest problem is they are unaccustomed to doing indirect rollovers.

I just have one major issue to resolve about "after-tax"


I hope you can take a look at it above at this link
viewtopic.php?p=6443567#p6443567

Thanks again! :happy
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

neurosphere wrote: Tue Jan 11, 2022 8:23 pm
MrRE wrote: Tue Jan 11, 2022 8:01 pm It's just that, up to now, I haven't been able to find a reason to use a brokerage.
I'm sorry, but everything you write implies the opposite. That you can't find any reason to use anything BUT a brokerage.

In many cases, banks have higher fees for many situations. In addition, you say that banks are not understanding you and give poor customer service, but it's hard to understand what services you are looking for and what you find lacking.

Respectfully, you're questions are so vague that it's impossible to give you any helpful answers. Everyone is trying to help understand you and your concerns. A lot of very smart, very experienced people have spent a lot of time working with you, yet you seem a little dismissive. If you can provide any details about what your concerns are, you are very likely to find amazing help and education here. You'll have to be receptive, however.
Thanks for the feedback neurosphere :happy

For this Forum Topic, I've been trying to keep things very very simple to avoid topic expansion and churn.

I just wanted to just see if anyone has long-experience with banks or CUs and Roth IRAs and can make a recommendation. That's all.


I really don't need a brokerage at this point in time. Eventually I might move over to one.


For now, I was hoping someone would have a recommendation for a bank or credit union based on experience.


Basically here is what I'm looking for:

If you can, please recommend a bank or credit union

that you found really knows

how to handle Roth IRAs properly.


I find that my credit union doesn't understand the more complicated Roth rules (like indirect rollovers).

And they give me misinformation on their website and help line.


So I want to switch to one more reliable and trustworthy in that sense.


Any such bank or credit union recommendations for Roth IRAs would be greatly appreciated. :happy
000
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by 000 »

Aren't you concerned about using a custodian that you feel doesn't understand these things well?

As others said there really is no "go-to" bank for Roth IRAs as that is an area more typically handled by brokerages.

It looks like Fidelity and Vanguard intermediate term treasury index funds are yielding 1.2% - 1.4%. I doubt one can find a non-teaser Roth bank rate that high.
Northern Flicker
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by Northern Flicker »

MrRE wrote: I just wanted to just see if anyone has long-experience with banks or CUs and Roth IRAs and can make a recommendation. That's all.
The problem is that interest rates at banks and credit unions vary significantly over time based on the liquidity needs of the institution. This makes them problematic for CDs-- every time a CD matures, you have to explore which institutions have the best rates, and the assets will tend to be scattered around the country over time. Thus, there generally is no single bank or credit union that is a good IRA provider, Roth or otherwise.

If you want to hold insured CDs in a Roth IRA, you can buy brokered CDs with funds at a broker. These are insured CDs issued by banks. The CDs are registered securities like a bond. This makes it easy to construct and manage a CD ladder. Just be sure to avoid callable CDs unless you have carefully concluded that its higher rate is adequate compensation for the call risk. That is hard to do, so just avoiding them is a straightforward strategy.
My postings are my opinion, and never should be construed as a recommendation to buy, sell, or hold any particular investment.
zie
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by zie »

I have an account @ Alliant credit union, but not a ROTH IRA, though they apparently offer one: https://www.alliantcreditunion.org/invest

I can only say I've been happy with a savings account there over the years. They typically pay at the upper end of typical bank/CU interest rates. I however now have a balance of like $10, since I now keep basically zero cash. I should probably close it, but I'm lazy.

Again, no idea if they can do what you are wanting to do, as I have never used them for any investing. Good luck!
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
playtothebeat
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by playtothebeat »

For our benefit, can you share the names of the banks/CUs which you said had inaccurate information, so that others here can keep an eye out for that to the extent they’re currently banking with such bank/CU or were considering it?
TropikThunder
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by TropikThunder »

playtothebeat wrote: Wed Jan 12, 2022 12:30 am For our benefit, can you share the names of the banks/CUs which you said had inaccurate information, so that others here can keep an eye out for that to the extent they’re currently banking with such bank/CU or were considering it?
+1. I'd be especially interested in what they are (all) getting wrong.
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

000 wrote: Tue Jan 11, 2022 11:28 pm Aren't you concerned about using a custodian that you feel doesn't understand these things well?

As others said there really is no "go-to" bank for Roth IRAs as that is an area more typically handled by brokerages.

It looks like Fidelity and Vanguard intermediate term treasury index funds are yielding 1.2% - 1.4%. I doubt one can find a non-teaser Roth bank rate that high.
Thank you 000 :happy

I agree completely.

This forum question (pasted below) seems to have been thoroughly answered by now.

"Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?"

Forum Consensus: "Don't use a bank or CU for a Roth IRA"

1) No one here has any favorable long-term experience with a bank or CU Roth IRA,
so no recommendations based on experience.

2) Brokerages are probably more experienced than banks or CUs with Roth IRA processes like indirect rollovers.


Additional forum consensus:

A) Brokerages can be as good or better than banks or CUs for simplicity, fees, and investments.

B) There is no over-riding benefit in using a bank or CU over a brokerage for Roth IRAs and major disadvantages.


Thank you for the treasury index fund information. I will look into it.


Next I will create a separate forum topic on:
"How to maintain a stable income portfolio post-retirement".

I'm not quite ready for that topic yet though.
I still have to get my 401k-to-Roth-IRA indirect rollover conversion completed!
And I have to compute and pay my Q4 estimated taxes too :happy
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

Northern Flicker wrote: Wed Jan 12, 2022 12:06 am
MrRE wrote: I just wanted to just see if anyone has long-experience with banks or CUs and Roth IRAs and can make a recommendation. That's all.
The problem is that interest rates at banks and credit unions vary significantly over time based on the liquidity needs of the institution. This makes them problematic for CDs-- every time a CD matures, you have to explore which institutions have the best rates, and the assets will tend to be scattered around the country over time. Thus, there generally is no single bank or credit union that is a good IRA provider, Roth or otherwise.

If you want to hold insured CDs in a Roth IRA, you can buy brokered CDs with funds at a broker. These are insured CDs issued by banks. The CDs are registered securities like a bond. This makes it easy to construct and manage a CD ladder. Just be sure to avoid callable CDs unless you have carefully concluded that its higher rate is adequate compensation for the call risk. That is hard to do, so just avoiding them is a straightforward strategy.
Thank you Northern Flicker :happy

I was trying to keep this forum topic focused totally on:

"Which banks or CUs understand the Roth rules properly?"
"Which can anyone recommend one based on their long-term experience?"


But everyone else wants to focus on investment choices,
which is a completely different topic.


I appreciate everyone wanting to help me understand the benefits of brokerages for Roth IRA investments.


But right now, I just want to park my Roth IRA money in a simple bank or CU that
1) I understand completely and that
2) seems to understand indirect rollovers.
Mine doesn't seem to understand indirect rollovers.
That's why I opened this forum topic.

I just want to find a better bank or CU for now for my Roth IRA. That's all.


Brokerages and their investments are not what I want or can handle at this immediate point in time.
Switching to a brokerage and their investments opens up a whole can of worms in terms of complexity and learning curves and decisions for me.

And I'm trying very hard to avoid that off-topic discussion.


Perhaps in the future, I'll open a different new topic on:
"Investment strategies post-retirement using brokerages". :happy
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MrRE
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by MrRE »

zie wrote: Wed Jan 12, 2022 12:14 am I have an account @ Alliant credit union, but not a ROTH IRA, though they apparently offer one: https://www.alliantcreditunion.org/invest

I can only say I've been happy with a savings account there over the years. They typically pay at the upper end of typical bank/CU interest rates. I however now have a balance of like $10, since I now keep basically zero cash. I should probably close it, but I'm lazy.

Again, no idea if they can do what you are wanting to do, as I have never used them for any investing. Good luck!
Thank you zie :happy
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retired@50
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Re: Wanted: Best Roth IRA bank or CU recommendation please. Which understand the Roth rules properly?

Post by retired@50 »

MrRE wrote: Wed Jan 12, 2022 10:56 am I just want to find a better bank or CU for now for my Roth IRA. That's all.
The trouble seems to be that no Bogleheads (or very few, who aren't reading this thread) use a bank or CU for their Roth IRA.

I suspect there's a good reason for that.

Regards,
This is one person's opinion. Nothing more.
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