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What are the different IRA deposits I can initiate?

Published

There are two main types of IRA contributions that you can initiate on the Transfer page of your account when initiating a cash deposit from your bank:

One-time deposit: This deposit type allows you to make a one-time tax year contribution to an IRA. The annual limit for 2018 is $5,500 as per IRS rules ($6,500 if age 50+). Roth IRAs have the same maximum contribution limits, but additional income limits may also apply. The total contribution in a given year to all types of IRAs cannot exceed $5,500 ($6,500 if age50+).

Auto-deposit: This deposit type allows you to set up a recurring contribution to your IRA. You are able to set the amount and frequency that the deposits are made. Any recurring deposits that you initiate will automatically be applied as tax year contributions for the calendar year in which you're making your contributions. Our system will keep a running track of your total annual IRA contributions, and will prevent you from over-contributing to your IRA. If you reach the annual contribution limit, we will pause your auto-deposit until the next calendar year begins.

Indirect IRA rollover: Indirect rollover contributions are funds that were withdrawn from another qualified account and deposited into your bank account. They can then be re-deposited into a Betterment IRA of a similar type. An indirect rollover must be completed within 60 days of the distribution and is only permitted once every 12 month period, per individual.

Note: If you haven’t already taken a distribution and you would like to initiate a rollover of a retirement account into Betterment, the preferred method is the “direct” method, where your provider sends Betterment your funds directly. This method does not involve you taking possession of your funds, so there’s less chance for error compared to the indirect method.

You can get started by clicking the “Transfer or rollover” button on the top right hand side of the page after you log in on a web browser.

For more on IRA contributions, please review IRS Publication 590A.