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CapitalSource Inc. Message Board

  • ex_hacker202 ex_hacker202 Mar 30, 2008 4:50 PM Flag

    Brokerage Question (OT)

    I currently have two accounts with TDAmeritrade, taxed account and a ROTH IRA. I also have a 401(k) with Principal from my old job.

    My question is this: Are there any benefits and/or risks from rolling my 401(k) into a traditional IRA with TDAmtrade?

    From my view, the pros are that I really like the service and online services available with Amtrade, and I'm very comfortable and familiar with the brokerage.

    The cons are that I would be putting all of my money into one brokerage. If it went under (unlikely) I'd be SOL and dead broke. However, since the FDIC does not insure stocks and funds, there is no additional protection available to me by having account with different brokerages.

    So is there anything I'm missing as far as risks go by only having one broker? Right now I'm content to keep my money with Principal, but eventually I will want to (or be forced to) move the money elsewhere since my company got sold and the new company has a different 401(k) plan.

    Thanks in advance for any advice given.

    P.S. I am no longer working at this company. Or at any company, for the the time being, I'm on disability.

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    • Myabe I am wrong, but this is the way I believe it works. A brokerage house going bankrupt does not affect your individual account unless you have it in some sort of account where it is "loaned" to the broker. The individual accounts of investors are not subject to the claims of the creditors of the brokerage account. In addition, the brokerages that I have been involved with typically have solid insurance companies that insure the accounts.

    • TO: Ex_- we have most of our money w/ TD Ameritrade, $500K or so, first, I hope your 401K isn't all in the company stock! Unless you can convey to me the reason. Ameritrade is ok for total accounts up to $250K, but if you're smart like me ($500K+ should attest),Ameritrade's "house" money market accounts are not insured. You have to request via email to switch it into the "Treasury Reserve" money market account, which is FDIC insured, yes, you earn .5+ LESS interest on it, but the leveraged money market accounts are NOT guaranteed to stay at $1.00/share, they in fact, can "break the buck" if things get ugly. Any sweep money market is not insured unless you request this.
      I put $150K 2 weeks ago into 2 CDs they offered, one was GE, the other Totalbank in Florida, 3-month paying 3.5% apy, they are now .2%lower, I did dd on both, Ameritrade is now offering garbage institutional CDs for 3-months, all are mortage banks in dire need for capital, I wouldn't touch them, GE Money Bank is good, but NOT what's offered now. TD Ameritrade may call them FDIC, but Countrywide, Washington Mut, Indymac, Puerto Rican Banks,GMAC, are ALL GARBAGE, they are desperate for funds. If FDIC impounds your account, they usually cut your yield in half after weeks to months delays. Do NOT buy any mortgage bank's CDs.

      • 2 Replies to cantgthrtondirt
      • Do you really think $500K is a lot of money? You can't be that smart. People who have real money don't brag about it, esp. when bragging about only $500K is embaressing.

      • Any particular reason you say "Ameritrade is ok for total accounts up to $250K", when it appears that you actually have about $500k tied up in Ameritrade?

        When my company got bought out all our stock got sold at a hefty premium. There were quite a few instant millionaires produced amongst the old timers. I had about 50% of my money invested in company stock so I did ok even though I'd only been there 11 years.

        As far as money markets and CD's etc, I don't park my money in cash for very long (at most a month or two), although it's very tempting to do in these volatile days. But I certainly don't want it tied up, even in a 3 month CD, just in case a great buying opportunity comes along.

    • If you deposit you 401k into a Bank of America cd of a list 25,000.00 or if you have muore then one account totaling 25,000.00(it would be fdic insured) you get 30 free trades per month from bank of America brokerage and if you're an active trader after the 30 free trades the commission is $7 per trade.

      On the other end ameritrade is just a little easyear to deal with . But once you get used to it Bank of America work just as fine, and again it all depends on how active you're in trading for the savings in commission to be substantial.

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