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Author: Mark0Young Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76421  
Subject: Re: what kind of IRA do I start? Date: 4/28/2004 2:05 AM
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... money market IRA, variable and time deposit. I wanted to save for the day I retire, so I was planning on putting the max into it each year till I retire. Is it better to go with a big bank like BofA, or is it ok to go with places like ING or a credit union.

If retirement is a long time away, most people would recommend equities, either by owning individual stocks or a no-load, low-expense stock mutual fund. That is why some people have their IRA at a discount broker and purchase individual stocks in their IRA, and some other people have their IRA at a mutual fund family and hold one or more mutual funds inside their IRA, e.g., the Vanguard Total Stock Market Fund inside a Roth IRA at Vanguard.

Banks and credit unions are used to dealing with savings instruments (savings account, money market account, CDs) and some have a brokerage arm to offer mutual funds, including mutual funds inside an IRA, but generally those mutual funds have a load (sales charges, contingent deferred sales charges, 12b-1 fees) to help them increase their profits but at a cost to your investments.

However, if you really feel safer with a savings instrument (lower risk, but far lower expected long-term returns), it might pay to do some rate shopping. Often banks and credit unions offer higher rates for savings instruments in IRAs because of the reduced accessability.
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