Should You Open an IRA at Your Bank?

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Most people have some knowledge about the concept behind an Individual Retirement Account (IRA).

What most people don’t know is there are material differences between IRAs offered by banks and credit unions and those offered by investment firms and other types of financial institutions.

Since IRAs offered by banks tend to be less flexible than those available at other providers, it makes sense to have a conversation specifically about the Bank IRA.

With that in mind, the following information is going to focus on the pros and cons of this retirement investment option at your local or online bank.

What is a Bank IRA?

There’s nothing tricky about this question. This type of IRA is a retirement savings account explicitly offered by banks and credit unions. Yet, they tend to differ from IRAs available elsewhere in that they offer a lot less flexibility in terms of investment options and provide lower returns.

Other than less flexibility and earnings, a bank IRA operates similarly to other types of IRAs when it comes to contribution limits, tax advantages, and income limits.