Wells Fargo Bank IRA Review
Wells Fargo Bank IRA review: CD IRAs, Roth IRA, Traditional IRA, rollover, Money Market IRA. Wells Fargo Bank IRA fees, rates, APY/APR, promotion offer code for 2017. Is Wells Fargo Bank IRA good and safe way to invest?
IRA Review: Wells Fargo Bank
Wells Fargo, which became the second largest bank in America after its acquisition of Wachovia Bank for
$12.7 billion, is another example of a once prestigious financial institution that was bailed out by the
government (to the tune of $25 billion in TARP funds) and is now being sued for mortgage fraud. This
paragon of banking that once held the public trust and was considered "too big to fail" continues to beef
up its bottom line by cutting interest rates for consumer products with IRA's being hit the hardest.
Why are IRA rates being targeted?
In the economy where most younger workers are not investing in their retirement, banks are
targeting the baby boomers - currently the largest segment of the population and those with the most
disposable income. With 401K plan balances at the mercy of market fluctuations, those looking for an
investment option for their annual tax deductible IRA contributions are relegated to one of two options:
take a chance with the volatile stock market (which analysts are predicting is due for a "major
correction" in the short term) or park the money in an IRA CD and accept around 0.1%-2% in interest,
which is well below inflation.
Wells Fargo is no better than most major banks, like
Bank of America and
JP Morgan Chase, when it
comes to interest rates on IRA accounts. They offer several options including Investment IRA's with
Wells Fargo Advisors and Traditional or Roth IRA CD's.
Destination IRA - a fixed or variable term CD with the minimum balance to open of
$2,500 and APY interest rates from 0.10% - 0.50%.
Wells Fargo Advantage Funds IRA - an array of no-load mutual funds with a minimum of
$1,000 to open and a $10 account fee per fund.
Wells Trade IRA - an online brokerage account
offering stocks, bonds, mutual funds and ETF's through Wells Fargo Brokerage with no minimum to open (a
discounted fee of $6.95 per online trade for PMA package customers). Read full
Wells Trade IRA review.
Full Service Brokerage IRA - an online brokerage account offering stocks, bonds, mutual
funds and ETF's through Wells Fargo Brokerage with $1,000 to open and $75 account
fee per household.
Although their investment IRA accounts may seem competitive based on fees and services provided, the
closer one is to retirement the less risk one wants to take with their his or her money with stock or bond markets.
the conservative investor looking to maximize the tax benefits of annual IRA contributions with IRA CD's.
Wells Fargo IRA CD Rates
Current rates for IRA CD's with Wells Fargo are a bit better than
Bank of America, but hardly worth the
time and effort when compared with Ally or Synchrony.
While their lowest rate of 0.10% is 10 times better than Bank of America's 0.01% - it's still pretty much nothing.
Retirement CD (Time Account) Special Rates
|Term ||APY ||Renewal Term
|9 months|| 0.10%|| 6 months|
|26 months|| 0.20%|| 24 months|
|39 months|| 0.30%|| 36 months|
|58 months|| 0.50%|| 48 months|
Wells Fargo's top rate of 0.50% (for an initial term of 58 months) is much lower than what Ally and
Synchrony are offering: up to 2.25% for a minimum deposit of $2,000 for 60 months. Also note that the
"special rate" which applies to the initial term requires a minimum deposit of $2,500. Their Retirement
CD Standard Rates are 0.01% - 0.35% (regardless of whether the funds on deposit are the minimum of
$1,000 or over $100,000) with the highest rate requiring a minimum term of 72 Months.
As with Bank of America, Wells Fargo has huge overhead costs associated with well over 6,000 brick and
mortar locations. This is a major factor when considering online only banks like Ally or
has only one brick and mortar location in Bridgewater, NJ). They are able to offer much more
competitive rates as a result of low overhead cost of operations.
Where is Wells Fargo Headed?
Wells Fargo was founded in 1852 and will certainly not be going belly up anytime soon.
As of 2017 they had:
- $1.5 trillion in assets, 4th largest in United States
- $1.4 trillion in retail brokerage client assets, 3rd largest U.S. retail brokerage firm
Wells Fargo & Company was ranked No. 25 on Fortune’s rankings of America’s largest
corporations. Despite their current potential liabilities associated with mortgage backed securities, the
company predicts continued strong financial results, loan and deposit growth, improvement in credit
quality and strengthened capital levels. Whether customers will benefit is anyone's guess.
A Wall Street Journal article: Wells Fargo Targets Specific Deals reveals that the
company is unable to grow its deposits through acquisitions due to a regulatory cap on the amount of
deposits they can hold. While their mortgage lending business continues to suffer, they are branching
out into other arenas including auto lending and branded private credit cards.
Article was updated on 1/22/2017.