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Occasional Contributor

I am taking a look at the usaa.com looking to move a couple of Roth IRAs over that are currently in CDs at other institutions.  Once I get to the part about opening a Roth IRA, it gives me 2 options which read:

  1. I only want to own USAA Mutual Funds in this account
  2. I want the ability to also own different securities such as stocks, ETFs, and mutual funds in this account.

While I understand the difference between the accounts, I am trying to understand if there is a member benefit to going with option #1 instead of option #2.  My assumption is if I chose option #2 then I would still be able to purchase the same USAA mutual funds that are being made available in option #1.  So what is the purpose to having this choice other than the obvious?  Is there a member benefit to buying the USAA mutual funds under option #1 than option #2?  i.e. lower fees, or lower balance to invest, etc.

 

I have included a photo below of the above 2 options that I see when opening a Roth IRA online at usaa.com

 

Lastly, some questions that I had which may apply to both options:

  • Do the investment accounts show up in the same place on the USAA site and mobile application as my other USAA accounts? (i.e. checking, savings, CD, credit card, etc.)
  • Are funds transferred from a USAA checking account to the investment account available immediately for investing?

Thank you for any additional insight you can provide to my questions.

 

Brokerage_vs_USAA_Mutual_Fund.jpg

 


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An advisor was able to get back with me on my questions.

 

Of course the obvious between the 2 options is that with one you can only purchase the USAA Mutual Funds, but with the other you can purchase other investment types.

 

As it related to my question, the team confirmed that if you go the route of the brokerage (option 2 in my initial post), then the minimum investment is $3,000 even if you are purchasing one of the USAA Mutual Funds that may not require that amount.  The actual brokerage account itself must have a miminum investment of $3,000.  Once you meet that, then the minimums for the actual funds would take place.

 

With the USAA Mutual Fund only account (option 1 in my initial post), you can purchase a good number of USAA mutual funds with a minimum investment of $500 or a $50 investement with $50 automatic monthly investment until you reach the $500 minimum.

 

The advisor confirmed there is no difference in the cost/fees to purchase USAA Mutual Funds through the fund only account (option 1) vs the brokerage account (option 2).  Also both accounts would show up on usaa.com and on the mobile app under the investment section.  Both account also allow instant transfers between the investment account and usaa banking accounts.  Of course with the speculation of brokerage going to Schwab, not sure if that would still hold true for the brokerage account.  But it does seem to still hold true with the funds account at Victory.

 

Hope this information helps some others out there who may have had the same questions that I did and needed this additional insight prior to making a decision that works best for them.

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2 REPLIES

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@Archelon, thank you for reaching out. I will forward your inquiry to an investment specialist for review. ~DC

Highlighted

An advisor was able to get back with me on my questions.

 

Of course the obvious between the 2 options is that with one you can only purchase the USAA Mutual Funds, but with the other you can purchase other investment types.

 

As it related to my question, the team confirmed that if you go the route of the brokerage (option 2 in my initial post), then the minimum investment is $3,000 even if you are purchasing one of the USAA Mutual Funds that may not require that amount.  The actual brokerage account itself must have a miminum investment of $3,000.  Once you meet that, then the minimums for the actual funds would take place.

 

With the USAA Mutual Fund only account (option 1 in my initial post), you can purchase a good number of USAA mutual funds with a minimum investment of $500 or a $50 investement with $50 automatic monthly investment until you reach the $500 minimum.

 

The advisor confirmed there is no difference in the cost/fees to purchase USAA Mutual Funds through the fund only account (option 1) vs the brokerage account (option 2).  Also both accounts would show up on usaa.com and on the mobile app under the investment section.  Both account also allow instant transfers between the investment account and usaa banking accounts.  Of course with the speculation of brokerage going to Schwab, not sure if that would still hold true for the brokerage account.  But it does seem to still hold true with the funds account at Victory.

 

Hope this information helps some others out there who may have had the same questions that I did and needed this additional insight prior to making a decision that works best for them.

View solution in original post