Important factors to consider when selecting an IRA custodian

There are different types of IRA accounts, for instance, Traditional IRA, Roth IRA, and SEP IRA. However, all IRAs have something in common. According to the Internal Revenue Service, all must have a custodian.

Who is an IRA custodian?

An IRA custodian refers to a financial institution that is responsible for holding account investments. The custodian ensures investment accounts are safely handled, and both the government and IRS regulations are followed.

There are numerous custodians in the market. While they are not hard to find, how do you single out the best IRA custodian for you? Here are essential factors to consider:

  1. Available investment options

  • Always choose a custodian with a wide range of investment options.
  • Sometimes your investment needs may go beyond those of an ordinary IRA account. Will your custodian be able to handle that?
  • Your custodian should be someone you are willing to trust with most, if not, all of your investments and financial services.
  1. Charges

  • Fees come in different forms; they could be annual account maintenance charges or commissions on trades.
  • Different custodians charge different prices. Thus, the costs depend on your custodian and account size.
  • Maintenance fees always depend on the custodian. So make sure you ask a potential custodian how much they charge.
  • Some custodians may waive the annual fee for customers whose accounts exceed a specific amount. Or depending on how much you have invested with them.
  • Also consider transaction costs charged when trading stocks, closed-end funds, and ETFs. Some custodians offer lower commissions than others while some impose charges on transactions for mutual fund families. In other cases, your transactions will not include any fees.
  1. Complex transactions

  • Make sure your custodian is well equipped to handle complex transactions.
  • While your account will start with straightforward investing like stock purchases,  with time, your needs may grow and you might seek other investment opportunities.
  • Some investments have complex rules surrounding them. Choosing a custodian without the necessary skills to handle complex transactions may cost you a fortune in terms of penalties and taxes.

Consider the above factors in your search for the right custodian. Remember, your custodian will be in charge of your retirement savings and investments. Contact a Quest IRA Specialist for further guidance to ensure you make the right choice. At Quest Trust Company we help you take control of your retirement.

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