Hi Board!This is my first post here and I have a question! I'm very experienced with stocks but have no clue when it comes to bonds. I'm looking to buy bonds when I open my first Roth IRA in January 2002. From the articles that I've been reading, using Treasury Direct is a good idea:http://www.smartmoney.com/onebond/index.cfm?story=2http://rehphome.tripod.com/portrisk.htmlMy question is, How do I open a Roth IRA for Treasury Direct? Has anyone else done this?-Bob-
My question is, How do I open a Roth IRA for Treasury Direct? Has anyone else done this?IRAs are trusteed accounts, meaning that they are actually owned by a bank or broker on your behalf. You need to find a bank or broker who is willing to open an account with Treasury Direct and have them do so, of course putting your name as beneficiary of that account. I suspect most of these places will instead direct you to their own bond services, to sell you marked-up bonds on the aftermarket, though.
Treasury direct is a means of buying treasury bonds at auction. Most brokers will buy treasury bonds at auction for you, for a fee of $40 or so. They will also buy them for you in the secondary market. Treasury Direct is really for a taxable account rather than for your Roth. The big goal in a Roth is capital appreciation, which is not taxed. The treasuries aren't going to appreciate particularly--they will mature at face. I'd suggest an investment in equities for your Roth and keep your bonds including treasuries in a taxable account. Best wishes, Chris
Thanks for your replies. According to the Treasury Direct website, accounts can be registered using IRAs:http://www.publicdebt.treas.gov/sec/secregop.htmHowever, when I called their hotline, 800-722-2678, the representative said that Roth IRAs cannot be used. Accounts must be regular taxable accounts.-Bob-
Both the website and the hotline are correct.The website makes it clear that an IRA TreasuryDirect account can only be opened if you have a registered financial institution to act as a trustee.You cannot open an IRA using the Treasury as your trustee, and that's what the hotline rep thought you were asking about.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by