Need a bank that will set up a checking account for an LLC owned by a Roth IRA

[Lisa Eisenhauer]

Hi,

I am having the hardest time finding a bank that will open a checking account for an LLC because it is owned by my Roth IRA.

Apparently this is an issue that other investors have faced as well, because it requires a bank manager to do a minor workaround with a field entry in the system in order to make it work.  This requires a series of phone calls where someone along the way always shuts it down. 

Rather than continue this agonizing trial-by-error approach, I would appreciate if someone would please refer me to the specific bank branch and bank manager that set up your LLC checking account for you so that I can give them a call. I live near Richmond, VA, but if you have a national bank then I thought I could just have my local branch call the bank manager you used so that s/he can walk my rep through the steps required to make it happen.

Thanks! -Lisa 

[Dmitriy Fomichenko]

@Lisa Eisenhauer, 

Yes, this is known issue, most local banks will not be able to help you. Go to Solera National Bank or Titan bank, both of them specialize in accounts like this. 

Who established an IRA LLC for you? Didn't they provide you with the guidance on how to open bank account for the LLC?

[Account Closed]

@Lisa Eisenhauer I concur with @Dmitriy Fomichenko.  We use Solera National Bank and they were very easy to setup the account with.  We did have confusion regarding where the physical, blank checks would be sent to, but it all worked out.

[Dawn Roy]

I second the vote for Solera National Bank.  Have my account there and have been happy with them.  

Cheers!

[Lisa Eisenhauer]

Quote from @Dmitriy Fomichenko:

@Lisa Eisenhauer, 

Yes, this is known issue, most local banks will not be able to help you. Go to Solera National Bank or Titan bank, both of them specialize in accounts like this. 

Who established an IRA LLC for you? Didn't they provide you with the guidance on how to open bank account for the LLC?

Dmitriy, THANK YOU, THANK YOU, THANK YOU for responding to my question and for suggesting some banks!  You are officially my hero!  Thank you Tom and Dawn for sharing your experiences with Solera too.  I really appreciate it!

I went to my local credit union, Wells Fargo, and United Bank and each one turned me down after "checking with legal."  For anyone interested, here's what happened at each bank:

1) The credit union turned me down because 1) the LLC isn't local, 2) they had no way to enter an IRA as the owner of the account in their system, and 3) they were concerned about not being able to control my appropriate use of the funds as manager.

2) Wells Fargo - I went to the local branch who didn't have availability to meet with me and sent me to the next town over 40 minutes away for an appointment with a "specialist" who could help me. Wells Fargo ultimately turned me down because my specialist was completely clueless in general, and because she failed to accurately relay what I was telling her to her "internal contact" on the phone. She wouldn't put her on speaker phone and wouldn't let me speak to her on the phone directly. This created a mess because I was trying to correct what she was saying. The local branch manager got involved, couldn't understand what I was explaining either, didn't want to admit it, and got defensive and shut down when I tried having my attorney explain it to her in a different way. She actually refused to talk to him and so I put him on speaker phone so she could hear what he was saying. It was an awful experience. They had ZERO interest in learning about something new. My attorney asked the bank manager for a contact for a business account specialist (since this is Wells Fargo, after all) and they gave a number for another branch over an hour away. The big hangup for them was entering the IRA as the account owner, and me as the manager. They had never been asked to do this before and, like the credit union, met a roadblock based upon how the field in their system was worded or set up.

3) Union Bank - This bank was actually the best. The manager has worked there for over 37 years and said she has never heard of anything like this before, but she was willing to listen, learn something new, and work with me. She called legal directly and tried to convince them but they said no. They said they couldn't identify an IRA as the owner of an account and were uncomfortable with this unconventional request. They too had some issue with a field entry in their system. (I might call her back to ask her to remind me why this made legal so uncomfortable.)

I ended up going with Titan rather than Solera only because when I called another law firm, they said they have a close working relationship with Titan and would recommend them.  So when I got off the phone with the attorney's office, I called Titan, had a good experience on the phone with them, and went ahead with setting up an account.  So I didn't choose Titan over Solera, I just contacted Titan first, they worked out, and I never even called Solera. 

So for anyone reading this, the difference between Titan (and Solera) vs. other national banks is that their application for a business checking account specifically asks if you are trying to set up an LLC checking account for an LLC owned by an IRA, and if you check "yes," then you have the opportunity to enter the IRA custodian's contact information and clearly identify that the IRA is the owner and that the manager of the account has 0% ownership interest of the LLC. National banks do not do any of this, and do not even know what an IRA custodian is.

Oh! I forgot to mention that the thing that seemed to spook all of the national banks I went to the most was the "FBO" in the "IRA custodian's name FBO my IRA, acct. no. 12345678." There was something about that "FBO" that none of them liked. The women at Wells Fargo didn't know what "FBO" stood for. (It's "For Benefit Of" in case you're reading this and don't know either...)

I watched YouTube videos on this topic where they say not to mention that the LLC is owned by an IRA when you're trying to set the checking account up, or else you'll receive the push back that I received. However, I'm not sure how this is possible to not mention the IRA... As a disqualified person, it's important to me that it be 100% clear that I am merely the manager of the LLC and not the owner. Thankfully, Titan Bank addressed all of these concerns and I don't have to worry about it anymore.

I did hear that Chase Bank will do it but that their process is a pain and requires a bunch of workarounds in order to make it happen. 

Anyway, I hope this helps anyone reading this! Bottom line: Skip the regular banks!

Thanks again to everyone who responded to my post!  You have NO IDEA how much you helped me!  
 

[Dmitriy Fomichenko]

You are welcome @Lisa Eisenhauer, glad it was helpful! 

[Chris Seveney]

Quote from @Lisa Eisenhauer:

Hi,

I am having the hardest time finding a bank that will open a checking account for an LLC because it is owned by my Roth IRA.

Apparently this is an issue that other investors have faced as well, because it requires a bank manager to do a minor workaround with a field entry in the system in order to make it work.  This requires a series of phone calls where someone along the way always shuts it down. 

Rather than continue this agonizing trial-by-error approach, I would appreciate if someone would please refer me to the specific bank branch and bank manager that set up your LLC checking account for you so that I can give them a call. I live near Richmond, VA, but if you have a national bank then I thought I could just have my local branch call the bank manager you used so that s/he can walk my rep through the steps required to make it happen.

Thanks! -Lisa 

 Solera Bank will set it up for you

[Shaz M.]

@Lisa Eisenhauerhow are things working out for you at titan?

[Lisa Eisenhauer]

Hi Shaz M. - Compared to what I went through before, it's working out extremely well because I finally got to fund my investment and move on with my life! 

Well,for the most part, anyway.  Their new online system is really confusing, and I have had to call customer support for help each time I needed to wire/ACH funds because I could never figure it out on my own (and their customer service chat box isn't set up yet).  One of my attorneys just sent me a bill reminder a couple of weeks ago for a fee I had already paid back in June/July, which never went through, and that I sent again in August.  Titan was able to track the funds to verify that the second attempt did in fact go through (with no need to try for a third time!) however, I noticed that I had still incurred a $150 late fee from the attorney along the way.  I'm still not exactly sure what happened... I was still confused when I went online to check my history, but in the end, it did go through and Titan's staff was helpful so I'm not blaming Titan for any wrongdoing.

So, overall, I like the bank and all of the people I've interacted with so far (except for the one guy who gives the same blanket response of "speak to your attorney or accountant" no matter what I ask... I could ask him what today's date is, or what his favorite color is, and that's how he would respond.) 

Honestly, however, aside from what I just mentioned I haven't logged in or dealt with Titan much lately.  So as time goes on, I will give updates. 

In the end, I got to successfully set up an account and fund my investment, which is much further than I would have gotten with any of the other banks/credit unions I tried. Therefore, I definitely recommend Titan Bank to anyone on this forum who wants to invest through an IRA.

[Shaz M.]

@Lisa Eisenhauer thank you for your detailed response Lisa.

my hesitancy with titan is that they are a nigerian bank. and my hesitancy with solera is that the are pretty new small bank. given how small banks that have failed in the past, i feel more comfortable with going with someone like chase. here is list from fdic of recent failures: https://www.fdic.gov/resources/resolutions/bank-failures/fai...

however, since i ran into problems with chase based on what i described in this post:

https://www.biggerpockets.com/forums/51/topics/1150830-bank-...

i wanted to know who i can go with. so i called solera, firstly the person who picked up transferred me to an IRA LLC bank specialist. when my call go transferred, the specialist was i guess working from home and had a crying baby i could hear. that was my first uncomfortable momemt. i don't accept that from a bank. maybe a small retail company or something.

secondly, i asked her if you know how an ira llc bank account is set up and i want to make sure it's set up correctly so i have some questions i'd like to understand your process. 

she right away asked me who is my document provider. and i was like, what is a document provider. she asked who set up your llc and i told her i did that. 

she said well we usually work with document provider because it's not a typical llc and is set up differently.

i assured that the my llc is not an issue, i do  have that set up properly. it is manager managed. i am the manager. my ira is the 100% owner/member of it. 

then she assumed that my ira is with solera. and i told no, i have it at another custodian, all i want to do at solera is to set up a bank account. and what i want to know is when you open an account at your end, in the bank account who do you put as the owner of llc. 

she told me well it's a business account that llc owns. and you will be the manager on the account.

and i told her, yes, i already know that and that's how it is currently set up at chase. the issue i am asking about is who will be listed as the owner of the llc at your end on the bank acct.. it should be "xyz custodian fbo shaz...IRA" and it should NOT be me. she goes. llc will be the bank owner.

i think i had to repeat 3 times that i am  not asking whether or not bank accout will be under llc. i am asking in filling out your paperwork for opening the bank account, does it anywhere ask who is the owner of the llc and if so, who will you put. 

she goes, oh we dont' mention that anywhere but if you did have your ira with us then we will have "solera bank ..custodian fbo shaz...IRA". that didn't make sense to me that if i have my ira with you then you will put who the owner is but if i don't have it with you you wont' put anything.

anyways, she def didnt' give me indication that she exactly knew. maybe i had a bad agent and since i was already skeptical of using a small bank, that def turned me off.

at chase my account shows that it's a business account under an llc. i am the manger of llc, the only thing that worried me is that they put me as a the owner of llc. this seemed no diff to me that when you go get an ein, it also puts you the owner of llc. if irs itself can have this limitation in getting the ein, then surely they would understand the limitation of the bank. besides, i have a fully complying operating agreement in which i have a clause that explains while irs ein letter shows me as the owner, in reality it is my ira that is owner and that that there are limitations on irs website when obtaining an ein. i will jsut be adding a similar explanation in my operating agreement about bank acct and have all the supporting documentation in case if it's ever needed. 

but that's where i am at.

i wish this process was simpler/ easier. it is also very frustrating that the custodian doesnt' telll you anything. they all market you can have a checkbook ira but don't really guide you in HOW to do it practically. all these rich ppl are doing it and i doubt they are going through all these hoops. ...

[Lisa Eisenhauer]

Hi Shaz,
Okay, I have some good news.  You had me panicking there for a minute when you said that Titan Bank is a Nigerian bank! I looked it up and saw it too, but then realized that they were referring to Titan Trust Bank.  The bank that I have is called Titan Bank and was established in 1907.  Here is their webpage:  https://www.titanbank.com/about-us

As for Solera, yes, the main reason I chose Titan Bank over them is because Solera's webpage didn't have a professional enough look and feel to it compared to Titan Bank.  I had been through so much hassle already with the other banks that I wasn't in the mood for a bank that looked as if it would likely have sales reps with newborn babies crying in the background. :)

I wanted to go with Chase bank too for the same reasons you did, however, my attorney warned me that he has had multiple clients who had to go through endless hassles to accomplish their goals with them.  

So now my complaints about Titan's new portal system seem completely trivial... I recommend you call them today!  Overall, the setup and funding process was extremely straight-forward and the customer service was great.  I went through none of the headaches or hassles like I did with the other banks.  And the best part of all is that it is NOT Nigerian!

Good luck!  Take a deep breath!  I remember how stressful this was... it just felt like an endless saga that would never end.  

[Shaz M.]

ah! thank you for clarifying. appreciate your explanation. yes it has been a hassle for sure. but these forums really help! :)

[Tegene Kirubel]

Haven’t set one up myself but very helpful topic and thank you to all those that provided references to these banks.

[Jackie P.]

My IRA LLC has a name. I opened a business checking account with Regions. Eventually I had problems with Regions getting wires out on a timely basis. I switched the account to Chase. I did not mention that it was an IRA LLC at either bank. I had to present my documents for setting up the LLC and also my EIN number. I have had absolutely no issues.

[John Paul]

So glad I found this forum! I'm having the same issue. My local bank refused to open a regular LLC business checking owned by my IRA. I had been with them for 18 years and paid off mortgages, never missed a payment, never had a problem, etc. When I tried to open this account though, they treated me like a criminal even though I explained this repeatedly and all of my documentation was in order.

My only concern about using Solera or Titan is that there's no local branch for me to access, and I'm kind of old school. What if circumstances require a cashier's check instead of a wire, how difficult (or not) is it to order one? Can I dictate the remitter listed on the check (LLC vs controller vs IRA) based on the needs of the transaction - my local bank would at least give me that much latitude - or is that determined by these banks? I'm just thinking of the different scenarios I may encounter once it's actually time to purchase these investment properties. Thanks everyone!

[Chris Seveney]

Quote from @John Paul:

So glad I found this forum! I'm having the same issue. My local bank refused to open a regular LLC business checking owned by my IRA. I had been with them for 18 years and paid off mortgages, never missed a payment, never had a problem, etc. When I tried to open this account though, they treated me like a criminal even though I explained this repeatedly and all of my documentation was in order.

My only concern about using Solera or Titan is that there's no local branch for me to access, and I'm kind of old school. What if circumstances require a cashier's check instead of a wire, how difficult (or not) is it to order one? Can I dictate the remitter listed on the check (LLC vs controller vs IRA) based on the needs of the transaction - my local bank would at least give me that much latitude - or is that determined by these banks? I'm just thinking of the different scenarios I may encounter once it's actually time to purchase these investment properties. Thanks everyone!

 We use Solera and I have never had anyone question a wire over a cashiers check. I guess that could be an issue but you could also talk to them about it.

[Dmitriy Fomichenko]

@John Paul, it's time to graduate from "old school" and start living in the 21st century for your own benefit. You can get the cashier's check and do any other banking transactions from the convenience of your home office or mobile device without ever going to the branch with any of these banks.