Where to open an IRA: Bank, fund firm, or broker dealer?


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You find yourself in an empty room faced with 3 identical, nondescript boxes, each bearing the letters “IRA.” A disembodied voice demands that you choose one. Never mind why you’re there; how do you choose? You don’t know what’s in the boxes.

One box could contain equity investments in casinos and adult beverage makers while another might hold a bar of gold. A third could be brimming with certificates of deposit — who knows?

This scenario is a little bit like choosing where to open an IRA. All IRAs look alike on the outside. It’s what’s on the inside that counts. And what’s on the inside of your IRA may be dictated by the custodian that holds the account.

Everyone at the local bank next door may know your name, but sometimes the only investment option is a CD. On the other hand, an account with the ginormous mutual fund company is a gateway to nearly every investment in the universe. Plus, it offers research and a nifty app. But getting someone on the phone may require infinite patience.

Where to open an IRA depends on several factors, including how you plan to invest, how comfortable you are conducting business online and the level of service and advice you need.