We’re capping off IRA Bonus week with more Free Money [1]!
The next one is a twist on the $25 sign up bonus from Betterment [2] to fund a new IRA.
While the bonus isn’t specifically for the IRA account, I did find a workaround to get the $25 bonus and move it to your Betterment IRA.
How to Get your $25 Bonus
- Open a new Betterment [2] account and Betterment IRA.
- Deposit $250 into the account and get a $25 bonus.
- Transfer the money to your IRA using this workaround: simultaneously withdraw the money from the Betterment account and contribute the same amount to your new Betterment IRA.
Betterment Terms and Conditions
- The offer is valid only for new individual accounts with Betterment [2].
- Offer available to U.S. Residents only.
- To qualify for the bonus, you must make an initial deposit of $250 within 60 days of signup and not withdraw that initial deposit for 60 days.
More on Betterment IRA Bonus
IRA Bonus Workaround. Right now Betterment [2] doesn’t have the ability to transfer the initial funds directly to the IRA. To move the funds from one account to the other, they suggested the workaround to withdraw the funds from the original account and deposit the money back into the IRA. Betterment stated that they hope to have an automated system rolled out in the coming weeks to convert the money without the workaround. I tried the workaround this week, and it went off without a hitch.
60 Day Minimum. Because of the 60 minimum to qualify for the bonus, if you are trying to do a IRA contribution for 2011, and you just signed up for your Betterment account, you’ll have to withdraw the money from your bank for the IRA about two weeks before you withdraw the other money (if they don’t have the automated system running yet). Since you’re doing the workaround, it won’t be an issue from a tax standpoint, but just be aware you’ll have to front the money during the overlap. If you already have an account from the first time we mentioned the Betterment bonus, you don’t have to worry about this part and you can just go ahead and do the workaround right now.
Betterment Fees and Monthly Deposit. Good news from Betterment… they lowered their fees, which was my biggest beef with them when I did the original Betterment Review [3]. I guess they listened! However, they did implement a monthly deposit to go along with it. To avoid the fees, sign up for the monthly deposit while you wait for your 60 days to pass (the first 30 days are free). If you signed up previously (before Feb 21, 2012), you can stick with the old plan to avoid the monthly deposit requirements, which will be important so you don’t go over your annual IRA contribution limits [4].