Banks Court Ira Customers With Better Cds
With the April 17 income tax deadline a little more than one week away, a number of banks are offering beefed-up certificates of deposit to entice customers into opening Individual Retirement Accounts.
For some investors, these improved CDs can be a prudent addition to an otherwise diversified retirement portfolio.
For others, adding a CD to a retirement package could be a big mistake.
To attract CD money from those beefing up their IRAs, banks around the country are waiving fees, insuring deposits of more than $100,000, and offering rates higher than those for regular CDs.
Also, IRA CDs may require a smaller minimum deposit.
By including out-of-state institutions in your search for the best deals, you have the best chance of finding the best rates, with the shortest time commitments and minimum deposit requirements.
The question remains, however, who should consider CDs for their IRAs?
Not younger investors, who should stick with stocks and stock mutual funds for long-term investments like retirement accounts.
Over time, stocks have outperformed bonds and CDs, paying an average 9-11 percent annual return.
Older investors who are near retirement, however, or those who can’t stomach market fluctuations should consider CDs as a way to add steady income to retirement accounts.
And with rates flirting around 7 percent, CD investors don’t have to sacrifice return to lock into that stability.
Schwab to buy ShareLink
Charles Schwab Corp., the nation’s biggest discount brokerage, said last week it plans to buy ShareLink Investment Services, one of Britain’s biggest discount brokerage firms, for about $65 million.
The move would greatly expand Schwab’s presence in Britain, where it now has a single office and serves mainly Americans living there.
“Markets outside the U.S. represent an important opportunity for us,” said Charles R. Schwab, the company’s chairman. “Schwab’s expertise in technology, marketing and distribution will add to ShareLink’s leading position in the United Kingdom.”
ShareLink’s directors have endorsed the deal, which is expected to be completed by June 30, pending regulatory approval.
Schwab, based in San Francisco, has as more than 3 million active investors with $132 billion in client assets.
SoGen International reopened
If you buy shares in an international asset allocation mutual fund, you give the manager free rein to put your money into stocks, bonds or cash - in any proportion, in any countries. That’s a lot of liberty, so choose carefully.
One of the best is SoGen International, run by Jean-Marie Evaillard of France’s Societe Generale. Since 1979, he’s produced average annual returns of 17.6 percent - and with less than half the risk of the typical stock fund.
Investment newsletter editor Adrian Day calls SoGen International “my top core fund” and Morningstar gives it five stars. The only catch was that SoGen has been closed to new investors. It just reopened.