recommendation of banks for Solo 401k checking account

21 Replies

Not having an easy go of finding a branch that can hold a checking account for our solo 401k. we are in North Jersey. Any recommendations would be great.

Jason, you are correct, most bankers are ignorant of the truly self-directed Solo 401k and that you can establish bank account for your 401k Trust. 

Talk to @Kreighton Reed with Solera bank, they are the best. Many other BiggerPockets members who have Solo 401Ks have used them and are pleased with the services. They setup to assist clients from all over the US and have great online/mobile banking system so you don't even need to go to a branch for your banking needs.

Thank you,

The company that created my solo also recommended Solera.

Admittedly I am bit hesitant to use a branch I can't walk into. How do you like there services and are you local to them?

Jason, I probably referred over 100 clients to them and only hear good feedback. 

@Jason Staine

We have many clients at Bank of America and Wells Fargo Bank. Who did you open the solo 401k with?

@Jason Staine

Fidelity Investments also offers a checkbook brokerage account for solo 401k plans.

I highly recommend visiting a few local banks versus working with a chain- Especially if you are looking to leverage with non-recourse loans. 

Bring your documents,  TIN, and a check to deposit into the account and most banks open them for our clients. Wells Fargo does them and I don’t even like them. TD, Meridian, etc. don’t explain to much-less is more. 

@Jason Staine Our aim is to be easier to use than your local bank.  Especially for real estate transaction. Its easier to use us for wires (most banks make you walk in and sit in front of a banker for 30 min) and making deposits is simple through our mobile APP

If you do find a local bank or if @George Blower can line you up with his WF or Bank of America bankers I would ask them the following as I have seen this as pitfalls for banking your SoloK account:

1) What is their dormant account policy and what is the fee: Many of these 401K accounts have very low transaction volumes and can end up in dormant status with a typical fee of $25 a month

2) What are the minimum balance requirements: I've seen it where the bankers don't go into detail with this because they hear that you are rolling over a sizeable amount and assume that you are going to keep those balances in the account.  Most of these SoloK accounts start out with large balances and then after the investment drop way down.  You don't want to be getting hit with a $15 monthly service fee.

3) Checks: as stated above these accounts have low monthly volumes.  A box of checks could last you 8 years.  Most banks (especially for business accounts) charge a ridiculous amount for business checks.  Sometimes north of $50.  We offer them for free but if you go with another bank I would recommend you buy the checks at Costco.  They are like $12.

4) Multiple accounts:  Often with these 401K plans you will be opening multiple checking accounts (one for Roth Funds, maybe one for traditional, if your spouse is on the plan then one for them). Just be aware that when opening these accounts they all will be subject to min balance requirements. (BTW we don't have min. balance requirments)

@Jason Staine

I just sent you the Fidelity Investments information. They are great to work with and the solo 401k provider that you mentioned should be able to assist you with the Fidelity Investments forms which can be faxed in. They will issue the checkbook once the account gets funded. We have a couple thousand clients currently using Fidelity.

They will also open the account with a zero balance and don't charge any holding fees and will provide a free checkbook.

Schwab is also another good option for checkbook control.

Originally posted by @Allen Underwood :

I highly recommend visiting a few local banks versus working with a chain- Especially if you are looking to leverage with non-recourse loans. 

Allen, unfortunately most banks are not familiar with Solo 401k, and many bankers are not willing to learn. Also most banks will not do a non-recourse loan to a 401k. Both of these are niches that only select banks/lenders specialize with. While it might be possible to find a local banker willing to work with you, but in my experience over the last 8 years it is much better to work with the expert such as @Kreighton Reed  who does it on regular basis. Not only they deal with such clients daily, he also very eloquently listed the drawbacks of giving your account to another bank. 

@Jason Staine I used my local credit union where I also have personal and business accounts.  The accounts are savings/membership (which I use for Roth portion) and a free checking account with no minimum required.  I create my own checks (which I have software for) when I need them.

@Larry F.

That is good. Using the local bank or credit union is a good option too so you can go into the branch when needed.

I did open an account with Wells Fargo since all my other accounts are with them.
As I started investing in different properties, my balance is getting much smaller than the original deposit.
It seems like I will start to get fees that were never mentioned if my balance drops too low across all accounts (!)
@Kreighton Reed how much hassle is it to switch banks once the Solo K is established?

The online options sound attractive with Solera. I didn't realize that I would need to go down to the branch in person to wire money when it was a more substantial amount.

Dmitry, I completely understand. I have been very fortunate to find a local bank that was enthusiastic about learning more. I have non - recourse loans available with a better than average interest rate and a great LTV. It was a learning curve for them but well worth it.

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@Allen Underwood , I'm glad it worked out for you. I have seen clients succeed working with local banks, but it is a hit and miss. And in the case when they were able to do it the process wasn't quick and straight forward, that is why Solera is my top recommendation for clients. 

@Sharon Mihalyak , there should not be any hassle for you to open another account for your Solo 401k trust. You can have both accounts for a period of time until you move everything over, then you can close your Wells Fargo accounts.

Frankly, Wells Fargo has been a frustration... they won't allow mobile deposit over $2,500 and you can't send a wire transfer online for over $10K -  they make you go to the branch (what a joke!!!). 

Solera on the other hand can accept mobile deposit of up to  $1Million!

If I have an option of doing banking at my desk instead of the branch, I'll prefer doing it at my desk. 

Also, using brokerage account such as Fidelity or Schwab may only work in some instances and will be challenging in other. The advantage is that you can trade stocks and write the check to make the investment from the same account. But they also have limitations: can't have a debit card, can't do mobile deposit, may or may not allow wire transfer. So if you are using brokerage account to buy/trade some stocks and invest in trust deeds - this might be a good fit. However, if have several rentals and need to deposit checks, or use a debit card to pay utilities and other bills, etc. conventional business bank account would be the best choice. 

Both Schwab and Fidelity allow for outgoing wires for placing alternative investments like real estate, for example.

Scwhab also accepts faxes for outgoing wire requests such as real estate investments, solo 401k participant loans and distributions. My clients do it all the time.

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