Why You Cannot Find an IRA Rate?

Answer 1

If you are searching for a financial institution that offers a great rate on IRAs, you are not alone. Many people know that an IRA is an Individual Retirement Account. By hearing the word "account" in this, they compare it to a savings account or a money market account. These types of accounts have an advertised rate that will be applied to the funds deposited into the account. However, an IRA is not the same type of account as a savings account or a money market account. It will not earn a guaranteed IRA rate. Taking time to learn more about what an IRA actually is can help you to maximize the benefit you can enjoy from this type of account.

What is an IRA?

So why can't you find an IRA rate advertised on the internet? The reason is because an IRA is more akin to a 401k account than a savings account or money market account. This is not an interest-bearing account at all. Instead, the funds you deposit into this account can be used to purchase mutual funds, stocks, bonds and even CDs. With some accounts, you can keep some of the funds you deposit in the financial institution's money market account, so there is a way to enjoy a guaranteed rate of return on your money. However, this return is often far lower than what you would enjoy if you invest in well-chosen stocks, funds and more.

What to Look For

You may be wondering how to find a great IRA if you cannot shop for an IRA rate online. The fact is that the financial institution you choose to open your account with is a critical factor in enjoying maximum benefits from your account. While you can use your IRA funds to purchase stocks, mutual funds and more, many financial institutions limit your purchasing options. For example, they may only offer you 15 or 20 different funds to select from. Another financial institution may also offer you an equivalent number of funds, or more or less in some cases, but they may offer entirely different funds. The funds with one financial institution may be more suitable for your needs and investment objectives. So take time to research the options available through different financial institutions before you decide who you should open your account with.