Frequently Asked Questions

Simply click on any of the questions to view the answer, or if you want to review the whole list, just scroll down the page.

Individual Retirement Accounts (IRAs)

What types of IRAs does offer?

offers U.S. customers the ability to trade options, stocks, indexes, bonds and mutual funds in Individual Retirement Accounts. Customers may choose from a Traditional, Rollover, Roth, SEP, SIMPLE or Educational IRA.
Open an Account


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How do I set up an IRA with ?

To open an IRA. Visit here or click on the "Open Another Account" link at the upper right of your account. The "New Account Application" screen will appear. Under "What Kind of Account", click on the appropriate account entity type.

  • The system will prompt you through the steps to create your account. (Select the specific type of IRA that you want to create)
  • Upon completion, you will be prompted to submit your documents electronically (and if applicable) or to print the forms. A SEP IRA requires form 5305-SEP, a Coverdell IRA requires form 5305-E, and a SIMPLE IRA requires form 5304-SIMPLE Articles I through VII.
  • If you have to print the forms or you choose to print the forms, please be sure to sign the IRA Account Application on the "X CUSTOMER SIGNATURE" line, and sign the IRA Designation of Beneficiary form on the "IRA HOLDER" line.
  • After printing the application, you may fax the application and all required documents to us at 312-629-5256 to expedite your application.
Please feel free to contact us at 888-280-8020 should you have any other questions regarding this process or if you need further assistance.
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What is a Traditional IRA?

A Traditional IRA is an Individual Retirement Account in which the contributions are tax-deductible if eligibility requirements are met. Please check with your tax advisor because your income, filing status, and other retirement plans may affect your eligibility. Earnings within a Traditional IRA are tax-deferred until withdrawals begin.

Please read important IRA disclosure information.
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Who is eligible for a Traditional IRA?

You (or, if you file a joint return, your spouse) received taxable compensation during the year.

Refer to IRS Pub 590 for more information.
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When can you withdraw from a Traditional IRA?

Age 59 ½ or later. A 10% penalty will apply for non-qualified withdrawals. Eligible withdrawals will be taxed at the current tax rate.

Refer to IRS Pub 590 for more information.
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What are the key advantages of a Traditional IRA?
  • Contributions are tax-deductible if eligibility requirements are met. Please check with your tax advisor because your income, filing status, and other retirement plans may affect your eligibility.
  • Trade stocks, ETFs, bonds, mutual funds and options. To learn about trading futures in an IRA, click here.
  • Trade covered calls, cash secured puts, debit spreads, credit spreads, purchase calls/puts, purchase straddles & strangles.
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How do I setup a Traditional IRA?

Step 1. Create an account.

Step 2. Fund your account with one of our four funding methods; Check, wire, ACH and online bill pay are the funding options. View more important information about Funding a Traditional IRA.

Step 3. Start trading. Once funds cleared.
Funds received via check or online bill pay check are held for 3-5 business days, ACH deposits are available 3 business days after they are received. Bill pay checks received electronically are available the same day.
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How do I make a regular IRA contribution to my Traditional or Roth IRA?

There are several options available to deposit your yearly contribution each of which is detailed below.

1) Deposit via ACH with an established ACH Link. You must specify the contribution year when making the request. To set up an ACH link, please select Establish ACH. ACH Deposit requests must be received by 3:30 PM ET for same day processing.

2) Deposit via on-line billpay. For details how to add as a Payee at your Bank, please refer to the On-line Billpay FAQ. Please note the contribution year must be specified in the account number field by adding the year directly after your account number with no spaces or dashes in between. Any contribution without a year designation will be deposited as current year.

3) Internally transfer a contribution from your Individual or Joint account to your Traditional or Roth IRA with a matching Tax payer I.D. Log into your Individual or Joint account and proceed to the Transfer Funds page. Select Internal Transfer option and enter your request. You must specify the contribution year upon entering. Requests must be received by 12:00 PM ET for same day processing.

4) Send a personal check specifying contribution year on check. Check deposits will be processed as current year contributions if year not specified on check deposit. Please refer to Check FAQ for further guidelines on depositing checks.

Check deposit mailing address:

Attn: Cashiering
P. O. Box 2197
Chicago, IL 60690-2197
311 W. Monroe Street, Suite 1000
Chicago, Illinois 60606

Delivery by courier service which requires signature or delivery:

Attn: Cashiering
311 W. Monroe Street, Suite 1000
Chicago, Illinois 60606
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Can I make a contribution to my Traditional or Roth IRA account from my business account?
No, you may only fund the account from your personal bank account which must match to your account registration at optionsXpress.
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What is a Roth IRA?

A Roth IRA is a retirement account in which initial contributions are subject to taxes but offers the opportunity for federal tax-free growth. Withdrawals in a Roth IRA are tax exempt subject to certain Internal Revenue Service rules. As with all IRAs, there are specific eligibility and filing status requirements mandated by the Internal Revenue Service. Please consult with your own tax advisor regarding your individual situation.

Please read important IRA disclosure information.
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Who is eligible for a Roth IRA?

You (or, if you file a joint return, your spouse) received taxable compensation during the year.

Refer to IRS Pub 590 for more info.
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When can you withdraw from a Roth IRA?

All earnings and principal are tax free if rules and regulations are followed. There is no mandatory distribution age.

Refer to IRS Pub 590 for more info.
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What are the key advantages of a Roth IRA?
  • Initial contributions are subject to taxes but offers the opportunity for federal tax-free growth.
  • Withdrawals in a Roth IRA are tax exempt subject to certain Internal Revenue Service rules.
  • Trade stocks, ETF, bonds, mutual funds and options.
  • Trade covered calls, cash secured puts, debit spreads, credit spreads, purchase calls/puts, purchase straddles & strangles.
  • Withdrawals, subject to certain rules, are tax exempt.
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How do I setup a Roth IRA?

Step 1. Create an account.

Step 2. Fund your account with one of our four funding methods; Check, wire, ACH and online bill pay are the funding options. View more important information about Funding a Roth IRA.

Step 3. Start trading. Once funds cleared.
Funds received via check or online bill pay check are held for 3-5 business days, ACH deposits are available 3 business days after they are received. Bill pay checks received electronically are available the same day.
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How do I request a Roth IRA conversion?

Beginning in 2010, there is no gross income limit for converting a traditional IRA to a Roth IRA. You may request a partial or full conversion of your retirement account. Please be aware a conversion is a taxable event in the year the conversion takes place.

  • Please review the IRA calculator page for additional information to consider. Please consult your tax advisor if you have further queries.
  • Please ensure both the Traditional and Roth IRA accounts are open with account numbers assigned.
  • Please complete an IRA distribution form available on the Transfer Funds page under Related Links. Please select Conversion as the Distribution reason and complete form.
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What is a SEP IRA-Simplified Employee Pension Plan?

SEP IRAs are retirement plans for self-employed people or owners of small companies. SEP IRAs permit employers to make tax deductible contributions on behalf of themselves and their employees without complicated administration and with lower cost.

Please read important IRA disclosure information.
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Who is eligible for a SEP IRA?
  • If you are self-employed, you can make contributions based on your earned-income compensation with maximum contribution levels designated by the IRS.
  • If you are an employer, you may start a SEP for your employees.
  • If your employer offers a SEP plan you may participate.
Refer to IRS Pub 590 for more info.
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When can you withdraw from a SEP IRA?

Age 59 ½ or later. 10% penalty will apply for non-qualified withdrawals. Eligible withdrawals will be taxed at the current tax rate.

Refer to the IRS Pub 560 for more information.
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What are the key advantages of a SEP IRA?
  • Available to self-employed people or small business owners.
  • Plan defers taxes on investments intended for retirement and withdrawals, subject to certain rules, are tax exempt.
  • Trade covered calls, cash secured puts, debit spreads, credit spreads, purchase calls/puts, purchase straddles & strangles
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How do I setup a SEP IRA?

Step 1. Create an account.

Step 2. Print your completed application.

Step 3. A SEP IRA also requires form 5305-SEP.

Step 4. Send us your completed application along with form 5305-SEP. Please visit here for fax and mailing instructions.

Step 5. Fund your account. View more important information about funding an SEP account.

Step 6. Start trading. Once funds cleared.
Funds received via check or online bill pay check are held for 3-5 business days, ACH deposits are available 3 business days after they are received. Bill pay checks received electronically are available the same day.
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How do I make a contribution to my SEP IRA?

If you are self-employed and are making contributions1 based on earned compensation, you may send funds directly to . Please notify us (in writing or via email) that you file taxes as a business in your own name. If you are not self-employed, your employer may send contributions for you. In this case, please ensure that the employer's name is on the check and that your employment profile is current.

The maximum compensation on which contributions can be based is $255,000 for 2013 and $250,000 for 2012. For self-employed individuals, compensation means earned income.
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What is a SIMPLE IRA?

A SIMPLE IRA is designed to make it easier for small business owners (usually less than 100 employees) to offer a tax-advantaged, company-sponsored retirement plan. Plan allows employees to make salary deferral contributions.

Please read important IRA disclosure information.
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Who is eligible for a SIMPLE IRA?

If your employer offers a SIMPLE plan you may participate. If you are an employer, you may start a SIMPLE for your employees.

Refer to the IRS Pub 590 for more information.
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When can you withdraw from a SIMPLE IRA?

Age 59 ½ or later. A 10% penalty will apply for non-qualified withdrawals. Eligible withdrawals will be taxed at the current tax rate.

Refer to IRS Pub 590 for more information.
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What are the key advantages of a SIMPLE IRA?
  • SIMPLE plans are funded by employer contributions and can be funded by elective employee salary deferrals without complicated administration and with lower costs.
  • Trade Stocks, ETF, bonds, mutual funds and options.
  • Trade covered calls, cash secured puts, debit spreads, credit spreads, purchase calls/puts, purchase straddles & strangles.
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How do I setup a SIMPLE IRA?

Step 1. Create an account.

Step 2. Print your completed application.

Step 3. A SIMPLE IRA also requires A SIMPLE IRA requires a completed 5304 form. If you are naming a beneficiary, the Designation of Beneficiary form will also be required.

Step 4. Send us your completed application along with form 5304-SIMPLE. Please visit here for fax and mailing instructions.

Step 5. Fund your account. You may fund your account with personal check if Self Employed or Business Check Employer is listed (check must match employer in system).

Step 6. Start trading. Once funds cleared.

Funds received via check or online bill pay check are held for 3-5 business days, ACH deposits are available 3 business days after they are received. Bill pay checks received electronically are available the same day.
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What is a Coverdell Education Savings Accounts?

A Coverdell Education Savings Account (ESA) is an account created as an incentive to help parents and students save for education expenses. Contributions to a Coverdell Education Savings account are not tax deductible.

Please read important IRA disclosure information.
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Who is eligible for a Coverdell Education IRA?

If your child is under 18 yrs, you may make tax deferred contributions.

Refer to the IRS site for more information.
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When can you withdraw from a Coverdell Education IRA?

Distribution may begin any time for qualified education expenses and the entire account must be disbursed prior to the beneficiary’s 30th birthday. Any withdrawals after this date will be subject to income taxes and penalty.

Refer to the IRS site for more information.
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What are the Key advantages of a Coverdell Education IRA?
  • All earnings accumulate on a tax-deferred basis and can be withdrawn from the account tax-free for qualified education expenses.
  • Can trade stocks, ETF, bonds, mutual funds and options.
  • Trade covered calls, cash secured puts, debit spreads, credit spreads, purchase calls/puts, purchase straddles & strangles.
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How do I setup a Coverdell IRA?

Step 1. Create an account.

Step 2. Print your completed application.

Step 3. A Coverdell IRA also requires form 5305-E.

Step 4. Send us your completed application along with form 5305-E. LINK. Please visit here for fax and mailing instructions .

Step 5. Fund your account. You may fund your account with check, wire or online bill pay.

Step 6. Start trading. Once funds cleared.

Funds received via check or online bill pay check are held for 3-5 business days, ACH deposits are available 3 business days after they are received. Bill pay checks received electronically are available the same day.
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What is a Rollover IRA?

Generally, a Rollover IRA is a tax-free distribution of cash or other assets from one retirement plan to another retirement plan. The contribution to the second retirement plan is called a "Rollover contribution."

There are a number of situations where it potentially makes sense to roll your old 401(k) assets into an IRA.
  • You don't know what to do with your old 401(k) and need a Rollover IRA after a job loss.
  • You have multiple 401(k) plans from previous jobs.
  • Your previous 401(k) isn't performing to its potential.
  • Your previous 401(k) is overly dependent on one company.
Please read important IRA disclosure information.
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Who is eligible for a Rollover IRA?
A Rollover IRA is usually used by those looking to move their employer qualified retirement plan to a self directed IRA. This Rollover IRA should be used to segregate the contributions made to another self directed IRA. Visit the IRS Rollover Chart for Rollover restrictions on different IRAs.
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When can you withdraw from a Rollover IRA?
Age 59 ½ or later. 10% penalty will apply for non-qualified withdrawals. Eligible withdrawals will be taxed at the current tax rate.
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What are the key advantages of a Rollover IRA?

Can trade stocks, ETFs, bonds, mutual funds and options.

Trade Covered calls, Cash secured Puts, debit spreads, credit spreads, calls/puts & strangles.
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How do I setup a Rollover IRA?

Step 1. Create an account.

Step 2. Contact your 401(k) plan administrator for the distribution paperwork.

Step 3. Complete the paperwork from your plan administrator.

Step 4. Your plan administrator will then distribute the funds payable to your IRA (your employer may mail the check to you as proof that the plan was paid out).

Step 5. Start trading. Once funds cleared.

Funds received via check or online bill pay check are held for 3-5 business days, ACH deposits are available 3 business days after they are received. Bill pay checks received electronically are available the same day.
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Can I roll over an existing 401K into an IRA?
If you are changing jobs or retiring, you can roll a 401k plan (403b, PSP, MPP) into an Traditional or Rollover IRA account. To facilitate the rollover of funds, contact the 401k plan administrator for the distribution paperwork. Your fund administrator will then distribute the funds payable to your IRA. The trustee of the IRA will be Delaware Charter, but the plan administrator should make funds payable to for the benefit of (FBO) your name and mail it to us. If the check is made payable directly to you, a Rollover Certification form must accompany the check.
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Can futures be traded in an IRA?
Futures accounts are limited to accounts coded for margin. Since IRA accounts are prohibited from trading on margin, these accounts are not eligible for futures trading.
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Where do I mail or fax my application or supplemental documentation to?

You may fax or mail your completed IRA application and additional paper work to.

Fax documents to:
ATTN: New accounts
312-629-5256 312-220-7414

Mail documents to:
(Delivery by courier service which requires signature or delivery)

Attn: Cashiering
311 W. Monroe Street, Suite 1000
Chicago, Illinois 60606
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Do you allow equity and index options trading in IRAs?

Yes, we allow trading of equity and index options in IRAs based on the trading level assigned to an investor. Trading in IRAs includes call buying, put buying, cash-secured put writing, spreads, and covered calls. Please refer to our futures FAQs for questions regarding futures and futures options trading in IRAs.

Anyone considering trading options in a retirement account may wish to read the CBOE's publication on options trading strategies in IRAs and Keoghs.
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Do you offer Margin in an IRA account?

We do allow for more advanced equity and index option trading based on the trading level assigned to each investor. The following restrictions do apply to all IRA accounts:

  • Cannot borrow funds creating a debit cash balance.
  • Cannot short a stock.
  • Not allowed to sell naked options.
  • Cross margining of stock and options not allowed.
  • Day trading is restricted to start of day buying power.
  • Portfolio Margin is not available for IRA accounts.
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How long will it to take to transfer an IRA from another firm to ?
An account transfer can take anywhere from 7 to 30 business days. Most transfers take approximately a week and a half once paperwork has been received.
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What are the IRA contribution limits for 2013?

Please note these are maximum contributions dependent on both your modified Adjusted Gross Income and Tax Filing Status.

2013 Limits Under age 50 Over age 50
Traditional IRA $5,500 $6,500
Roth IRA $5,500 $6,500
Simple IRA $12,000 $14,500
Sep IRA* Lesser of 25% of compensation or $51,000
Education IRA $2,000  
 
*Employer contributions only
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What is my required minimum distribution (RMD) for tax year 2013?
RMDs are generally minimum amounts that a retirement plan accountholder must withdraw annually starting in the year when age reaches 70 ½. To calculate your RMD, the December 31st 2012 year-end balance of the retirement plan account is needed along with consulting the Life Expectancy Tables provided in Publication 590 at www.irs.gov.
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Do you have IRA calculators available?
IRA calculators can be accessed through our IRA Trustee Principal Trust at http://www.principaltrust.com/tools/calculators/rothtransfer.htm
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How long does it take to fund my IRA?
Funds received via check or online bill pay check are held for 3-5 business days, ACH deposits are available 3 business days after they are received. Bill pay checks received electronically are available the same day. Before sending a wire, please notify and let us know how to classify the contribution year. Contributions for the prior 2012 Tax Year can be made until April 15, 2013 – the Contribution Year must be designated. Contributions made in 2013 with no designation will be classified as a contribution for Tax Year 2013.
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Is there a required minimum balance requirement in an IRA account?
does not charge an annual fee for maintaining your IRA account. However, all IRA accounts maintained at require a minimum equity balance of $200.00.
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Multi-leg option strategies are subject to multiple commissions. Profits may be eroded by the commission expended to open and close the positions and other risks apply.

This information should not be construed as providing individual tax or legal advice. Every investor is different and the best type of retirement account depends on your taxable income, age, family status and meeting IRS eligibility requirements. Please consult with your own tax or financial advisor to help you determine which type of retirement account(s) will work best for you regarding your own individual situation.