If you’ve been looking to roll over your 401(k) into a Rollover IRA, it’s one of the best times to take advantage of stock brokerage promotions.
Stockbrokers offer promotions that can get into the thousands of dollars because they know you can bring thousands of dollars to your new account. They are always looking for new deposits, just like banks, and they’ll pay you because they know moving an IRA is a lot of work. Once you move it to a new brokerage account, chances are you’ll stick with that account for a while.
Best of all, for you, it’s free money that has no immediate tax consequences because a Rollover IRA is a tax-deferred investment vehicle. Everyone wins!
These offers are always changing so if you see one you like, you want to take advantage of it immediately. We will try to keep them as up to date as possible.
We’ll tell you the best IRA rollover promotions you can get right now, including what to watch out for:
Need help rolling over your 401(k) into an IRA?
Keeping your old 401(k) with a former employer is usually not a great idea but if you don’t want to move it yourself, you can work with a company like Capitalize to do it for you. They will help you find the best IRA for your needs and move it over – for free.
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TD Ameritrade – up to $2,500
TD Ameritrade is always offering a great promotion whenever you open a brokerage account with them and this one is applicable to both IRAs and regular brokerage accounts. The bonus is based on how much you deposit into your new account.
Here is the TD Ameritrade bonus structure:
- Deposit $250,000 – $499,999, get $350 cash
- Deposit $500,000 – $999,999, get $700 cash
- Deposit $1,000,000 – $2,000,000, get $1,500 cash
- Deposit $2,000,000+, get $2,500 cash
TD Ameritrade is one of the brokerages that also offers free trades but there is no ACAT fee reimbursement.
Also, in the fine print, “Offer is not valid on tax-exempt trusts, 401(k) accounts, Keogh plans, profit sharing plans, money purchase plans, accounts managed by TD Ameritrade Investment Management, LLC, TD Ameritrade Institutional accounts, or current TD Ameritrade accounts.”
Firstrade – up to $200
Firstrade used to have a generous offer for both rollover IRAs and new accounts. I will keep this expired offer listed here just in case it comes back (and as a reference). To get it, just open an account, deposit at least $5,000 and you’ll get a cash bonus.
Here is the Firstrade bonus structure:
- Deposit $5,000 – $9,999, get $25 cash
- Deposit $10,000 – $24,999, get $50 cash
- Deposit $25,000 – $49,999, get $100 cash
- Deposit $50,000 – $99,999, get $200 cash
- Deposit $100,000 – $249,999, get $300 cash
- Deposit $250,000+, get $600 cash
Firstrade also offers free trades as well as ACAT fee reimbursement of up to $200 when you switch. The ACAT refund is the only active offer for Firstrade right now.
Charles Schwab – up to $500
Charles Schwab has a refer a friend program where you can get a bonus for transferring assets as long as an existing client refers you. Unfortunately, I don’t know anyone with an account so I can’t set this up for you.
Here is the Charles Schwab bonus structure:
- Deposit $1,000 – $24,999, get $100 cash
- Deposit $25,000 – $49,999, get $200 cash
- Deposit $50,000 – $99,999, get $300 cash
- Deposit $100,000+, get $500 cash
The person making the referral doesn’t get anything, unfortunately. The link below will tell you more about the program but you will still need to find someone to refer you.
Merrill Edge – up to $600 [EXPIRED]
Merrill Edge, a Bank of America company, has a juicy offer of up to $600 if you open a new Merrill Edge Self-Directed brokerage account. Don’t let the title fool you, a Merrill Edge IRA and a Merrill Edge Cash Management Account qualify. In the IRA category, this includes Rollover, Traditional, Roth, and owner-only SEP-IRA accounts too.
Here is the Merrill Edge bonus structure:
- Deposit $20,000 – $49,999, get $100 cash
- Deposit $50,000 – $99,999, get $150 cash
- Deposit $100,000 – $199,999, get $250 cash
- Deposit $200,000+, get $600 cash
Merrill Edge offers free trades but there is no ACAT fee reimbursement.
What to Watch For
Most brokerages are the same. They have comparable technology, market research, similar apps, and trade execution speeds – none of those are a differentiator. What you want is a well-designed interface so you can easily do what you need to without having to navigate a mess of menus. With it being a Rollover IRA, even the tax reporting isn’t a big deal because taxes on capital gains are deferred.
So what is there to watch out for?
Fees. Does the brokerage has a minimum balance requirement and does it charge a maintenance fee? Most will not require a minimum or require an annual fee but some still do, so keep an eye out for it.
Normally, when you transfer assets from one brokerage to another – there is a fee. With a full transfer of assets, the fee is known as an ACAT transfer. ACAT is the system that is used to transfer the assets and the fee can be quite steep. Some brokers will reimburse that fee when you transfer in money while others won’t. This can cut into your bonus payout.
You can avoid this by liquidating your assets, transferring cash, and repurchasing them. Since it’s an IRA, this wouldn’t trigger a taxable event but you are no longer investing the money during the transfer period. Being out of the market, especially in periods of extreme volatility, can be risky.
This is less of a concern with a rollover because in most cases, you will liquidate your positions, get a check or wire transfer, and deposit that into the new Rollover IRA. You have 60 days to deposit that check into your rollover IRA too but this is often not a concern if you stay on top of it. Two months is a long time.
Finally, the bonus is not considered your contributions when you receive it. When you fulfill the bonus obligations, the account will earn the bonus cash as “dividends or interest” and there are no tax consequences. It’s as if one of your holdings paid you dividends or interest.
If you keep all these in mind, you can take advantage of a Rollover IRA bonus and earn extra cash to your IRA.