How to Choose an IRA Custodian

The following is a transcript of "Money Girl's Quick and Dirty Tips for a Richer Life," a podcast from QuickAndDirtyTips.com. The audio program is available via RSS feed here and at TheStreet.com's podcast home page.

Hello and welcome to Money Girl's Quick and Dirty Tips for a Richer Life.

Today's topic: How to choose an IRA custodian.

In last week's episode, I explained how to roll over your 401(k) to an IRA when you leave a job. In today's episode, I have some tips on how to choose an IRA custodian.

It's possible to open an IRA at many types of financial institutions, including brokerages, mutual fund companies, banks, credit unions, insurance companies, and self-directed IRA custodians. Having so many choices can be overwhelming!

As listener Joshua put it in an email he sent me, "When you are in a situation where you want to start your retirement savings, and you have no idea whether you'd be better off just giving the money to the bank, giving it to a mutual fund company, or some other institution, it is so daunting that you just don't do anything."

Now, don't let the abundance of choices keep you from taking action! Remember, delay has a cost: during the time you spend in a state of indecision about where to open an IRA, your money could have been growing for you.

So here are four tips on how to make a smart choice about which IRA custodian to go with:

Tip 1: Choose an IRA custodian with a broad selection of investment options, including a wide variety of mutual funds as well as individual stocks and bonds. Fidelity, Vanguard and Charles Schwab are just a few examples of mutual fund and brokerage companies with broad investment choices.