Does it make a difference who you open up a Roth IRA or 529 account with? If so, any recommendations?

Question

We bank with Bank of America. Should we open up the 529 and Roth IRA with BofA or with someone else?

Answer 1

With the Roth, it doesn't really matter.

With the 529, it will depend on what state you live in. Some states have tax advantages for buying the 529 sponsored by that state. Also, different 529 plans offer different investment choices.

Answer 2

Roth IRA is a retirement account while a 529 Savings plan is for saving for college education. What is the reason for opening this account, because they are two different accounts with different goals. If you want to open a Roth IRA try Vanguard they have the lowest rates and some of the greatest funds from personal experience. Bankrate.com is a great site that lists the top Roth IRA accounts.

Answer 3

For the Roth, you want to open it with a discount broker who doesn't charge an annual maintenance/custodial fee and has plenty of investment options with low transaction fees/commissions. As suggested above, Scottrade is a good option, however, you WILL pay a transaction fee on many of their funds--UNLESS you choose a fund from their No-Transaction-Fee list.

For the 529 Plan, as mentioned, your own state's plan will often be the best deal. Whichever plan you go with, make sure you buy it directly through the state--not from a full-service brokerage, bank, etc. Otherwise, you'll be paying more in fees/commissions. For a list of the best 529 plans in the country, go here:

www.savingforcollege.com

Answer 4

If you have a financial advisor, I would use him/her. If you don't, shop around. Contact your local Ed Jones/New York Life/Ameriprise/Raymond James representatives and ask them to make up a proposal. Especially with the 529 accounts, it varies as to which state is best (each state sponsors their plan with a different financial services company). Do your homework as the different states also offer varying tax incentives. I would also recommend opening your Roth account wherever you open the 529 plan. It helps your advisor to help you knowing where ALL your investments are.

Answer 5

I highly recommend Scottrade for any IRA account, but I recommend a Roth. They have no closing, opening or custodial fees. Plus, there is no charge for purchasing mutual funds or bonds. They only charge you $7 for stock trades.

You can mange your account on-line, but they also have many branches that you can visit to open your account and ask questions with a real live person.

I transferred my account from Ameriprise to them a year ago because of all the expensive fees and I couldn't be happier. Their customer service is great too!