Opening a dedicated bank account for your Solo 401k Trust is what gives you “Checkbook Control”, that is, check-writing abilities to transact with your Solo 401k.
While it’s true you can open a Solo 401k trust bank account just about anywhere, you might find certain banks easier to work with than others.
We have preferred banks and bankers we’ve trained over the years to make the process simple and quick. Think about this like hitting the “easy” button. Our preferred banks and bankers know how to open the 401k trust account swiftly, maintain it simply, and won’t charge bank fees to Nabers clients.
If you choose not to use one of our recommended banks or bankers, review our helpful checklist on what you might need to bring to your local bank or credit union, so you can get the account open, fund your Solo 401k and start investing!
Remember: The bank account will be in the name of your 401k trust, using your new 401k trust tax ID number. The account is not in your name, and don’t use your social or business EIN.
You might be asked to produce any (or all) of the following documents:
Solo 401k Adoption Agreement
Two [2] forms of ID (driver license, passport, birth certificate, etc.)
Solo 401k Trust Agreement
Solo 401k Trust EIN Letter
Beneficiary Designation
Certificate of Trust (these certificates vary bank to bank and state to state – you should have everything needed in the Trust Agreement to complete a certificate of trust if the bank has one. If they don’t have one, they should be able to extract all necessary information from your Solo 401k Trust Agreement)
Helpful tips:
Not all banks and bankers are familiar with self-directed retirement accounts, and might even tell you that you’re not allowed to be the trustee of your own retirement account assets. This is simply not true as evidenced by the IRS-approved documents you now have. Instead of trying to educate your banker, keep things simple – you are opening a trust checking account.That way you won’t accidentally alarm any banker by saying the “R” word (retirement account).
Your trust is not a business or personal trust. It is also neither revocable nor irrevocable. It does not need to be registered with the state or at the federal level. Your trust is a private instrument.
Open a non-interest bearing account (0% interest). While this might seem counterintuitive at first, consider that most accounting today is fully automated. If your 401k trust bank account earns interest, a 1099-INT will typically be automatically generated by the bank accounting system, and one copy will be submitted to the IRS. You’ll then have to explain to the IRS why your tax-deferred entity received a 1099-INT and why it doesn’t really owe any taxes. This is confusing for you, the bank, and complicated to unwind with the IRS. Keep things simple. Let your investments grow your wealth and don’t rely on the tiny fraction of a percent from the bank account.