IRA with Zecco?
I have been mauling with the idea of opening an IRA account with Zecco to take advantage of their free trade program to purchase ETFs. There was a discussion that Zecco will have IRA accounts some time this month but I haven’t noticed that officially yet.
Before opening an IRA, I would also look to see if there are any other fees associated with the account. To their credit, Zecco has eliminated the annual and closing-out IRA fees from their fee schedule. (Update 2/4/07: Not true anymore. Zecco sneaked back the $30 annual fee.) But, their ACAT-out fee of $50 remains. So, if you should somehow be unsatisfied with Zecco in future and you want to transfer the investments in-kind out, you would have to pay a fee of $50.
However, you can avoid this fee by selling-out the positions with no transaction fee (if you want to eliminate these positions anyway), taking the IRA as a distribution in cash, and then doing a rollover into your new IRA within the stipulated timeframe by the IRS (60 days I believe).
Of course depending on how the distribution was structured, a top-up of the amount of tax withheld might be necessary. Having done a few rollovers before, I feel that this process is quite doable and eliminates one of the concerns I had to starting an IRA with Zecco.
Stumble it!
February 4th, 2007 at 5:59 pm
zecco came out with IRA, but IRA annual fee is not freeanymore. Charging $30 as IRA annual fee.
February 4th, 2007 at 10:21 pm
Thanks investor for your feedback. I visited the Zecco website and I see what you mean. Instead of the annual fee being FREE, now it is listed as $30. In that case, I think I will skip the idea of an IRA with Zecco.