24 How do I put mutual funds in an IRA?
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This article is from the FAQ, by with numerous contributions by others.
24 How do I put mutual funds in an IRA?
Most funds have a bank or trust company arranged to be an IRA custodian
for any IRA shareholders. If you buy the fund directly, using this
custodian, you must use a different application available from the fund
company. The custodian usually charges $10 to $15 per fund account
per year. This is a significant expense for small accounts, not too
significant for larger accounts. Alternatively, you can open a
brokerage account IRA and purchase mutual funds within that. This
would be similar to using a broker to buy funds normally, but incurs
a single IRA custodian fee (usually $25 to $50). Custodian fees,
but not loads or commissions, may be paid separately from the
contribution, and may be separately tax deductible. Call 1-800-TAX-FORM
and ask for publication 590 and form 8606 for general IRS information
about IRAs (but note that tax rules can change since the last tax year).
Note that the tax issues of distributions as detailed previously don't
affect IRA accounts.
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