Self Directed IRA friendly banks

Tax, SDIRAs & Cost Segregation
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Self Directed IRA friendly banks

Dan Franks
Rental Property Investor · Prosper, TX · Member since 2008 · 51 posts · 6 votes

This might be a dumb question, but I am having a difficult time opening a checking account for my self directed IRA.

My custodian advised me to set up a bank account with my SDIRA as the Member (owner) and myself as the Manager and signer. I did exactly this, and have taken the paperwork to a few local branches of national banks....and they are super confused and send me away.

Any thoughts or suggestions?

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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
8y

@Dan Franks , I have a Self Directed Solo 401(k) and had the same issue finding a bank that offered this account. Check out solerabank.com. They have amazing customer service. REALLY on the ball.

Also, if a SD solo 401(k) is an option, I think it's a better choice.

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  • George Blower
    Retirement Accounts Attorney · Southfield, MI · Member since 2017 · 3k+ posts · 1k+ votes
    8y

    @Mark Zarragoitia

    Starting out with a non-checkbook self-directed IRA is often a good idea especially if you will not be processing a high number of alternative investments; however, the LLC is another option for creditor protection since in PA IRAs are not afforded full creditor protection in the first year. 42 Pa. C.S. - Sec.81248(b)(1)(vii),(viii)& (ix)

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  • Mark ZarragoitiaPro Member
    Rental Property Investor · Houston, TX · Member since 2018 · 15 posts · 10 votes
    8y

    @George Blower Thank you, George.  That is something to consider.

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  • Rene Brodowsky
    Member since 2017 · 17 posts · 4 votes
    8y

    I formed an IRA LLC and opened a business checking account at a local bank ( super high international wire fees though) During the process they had me personally sign as 'sole benefactor' of the account...or something like that...said it was a form required to make sure LLC isn't a front for laundering money...my IRA custodian/specialist had no idea what this document was...I also didn't get a copy with my new account paperwork. I've requested it. I don't want to have accidentally sign something that creates a prohibited action...my stepson is the manager of the LLC, but I have signing rights... which I don't even want. Anyone have experience with this extra paperwork here in Michigan?

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  • George Blower
    Retirement Accounts Attorney · Southfield, MI · Member since 2017 · 3k+ posts · 1k+ votes
    8y

    @Rene Brodowsky 

    It appears to be that bank's requirement. From an IRA regulation perspective, as long as you follow the IRA prohibited transaction rules, such as not using the IRA LLC funds as security for a personal loan or receiving compensation for managing the IRA LLC, such document should not have any negative implications on the IRA.

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  • Phil G.
    Real Estate Broker · MA · Member since 2013 · 361 posts · 297 votes
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    @Rene Brodowsky

    In May of this year, new federal FinCEN regulations went into affect requiring banks to get a certificate from each beneficial owner for new accounts for legal entities.  Last week, I opened additional accounts for one of my LLCs and for my 401(k), both have been banking at the same financial institution for a decade and I had to sign the paperwork.   It's an attempt to prevent money-laundering and other financial crimes.

    1Reply
  • James Short
    Member since 2018 · 2 posts · 0 votes
    7y

    We were able to open up a QRP (Qualified Retirement Plan) with both 401k and IRA at Titan Bank in Mineral Wells, Texas.

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  • George Blower
    Retirement Accounts Attorney · Southfield, MI · Member since 2017 · 3k+ posts · 1k+ votes
    7y

    @James Short

    Some of our client have also used them.

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  • George Martino
    Member since 2019 · 2 posts · 1 vote
    7y

    Good afternoon. I am looking for a local custodian (New Jersey) to roll my 401K into. I would like to set up an SDIRA Trust.

    Thank you.

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  • Justin WindhamPro Member
    Banker · Nationwide · Member since 2015 · 4k+ posts · 1k+ votes
    7y

    @George Martino

    Fees and the level of service can vary widely from one custodian to another. You might find that the right custodian for you is not local. Do you want checkbook control? If so, you have you talked the over the differences between an LLC and a trust for this purpose with a professional? Also, if you are self-employed a Solo 401k can allow checkbook control without the need for a custodian or an LLC. Using a trust with the 401k is a more established practice in the industry than using one with an IRA. Just some food for thought.

    Welcome to BP!

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  • George Martino
    Member since 2019 · 2 posts · 1 vote
    7y

    Thank you Justin. 

    1Reply
  • Mike Gabriel
    Member since 2018 · 1 post · 0 votes
    7y

    Hi - Im using Wells Fargo for my llc checking account. It didnt phase them at all when I told them it was a self directed IRA

    One question though - I really dont like Wells Fargo (poor service, sneaky fees etc). I would like to move the account to my local credit union -State Employees Credit Union in North Carolina. They don't supply a 'business checking' account - but say they can open an account for the LLC as a DBA under my name.

    Would this be allowed under the tax laws?

    Thanks in advance for your help

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  • Justin WindhamPro Member
    Banker · Nationwide · Member since 2015 · 4k+ posts · 1k+ votes
    7y

    @Mike Gabriel

    Any account opened for the LLC really should be in the LLC name. Many banks can help you with this, so if your credit union can't do it, you should seek another institution for this particular need.

    0Reply
  • Jason Brenizer
    Investor · Austin, TX · Member since 2014 · 40 posts · 32 votes
    4y

    A few of you who posted previously in this thread suggested we reach out to @Kreighton Reed at Solera Bank...

    He returned my call within an hour. He asked a few questions about my plans for the account and I shared info on short term rental rule changes in Hawaii which he was happy to get an update on.

    His staff sent over a link and I was able to complete an online application to set up a bank account for an LLC owned solely by my self-directed IRA (Solo 401K to be exact) in a matter of minutes. That's stellar customer service!

    This after being turned down by one national bank, two local banks, and one credit union I've been banking with since 1995.

    BiggerPockets has been a gold mine of referrals for me. There is no more consistently useful investing network on the planet!

    2Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    4y

    I agree with you @Jason Brenizer, we've been recommending Solera for years to our clients, Kreighton is the best! 

    1Reply
  • Reuven Kishon
    Member since 2022 · 6 posts · 0 votes
    3y

    I too used Solera and it was fantastic. I formed a New Mexico LLC.

    My issue is I want to open up a safety deposit box for my checkbook IRA, and I don't live in Colorado (which is where Solera is based). So I figured I'd look to open up an account in San Diego (where I live), but so far after reaching out to two credit unions it seems they want an LLC-5/LLC-12 filed which I found out is a way of registering the LLC as a foreign LLC. I don't want to do that as it incurs more filings and fees.

    Any idea on how I can open up a local checking account for this LLC without having to register it in California?

    Thanks!

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