Which is a better place to start an IRA, local bank or investment firm? how do they make their money?

how do they make their money. what are the pros and cons of each?

You should open an IRA account (a Roth IRA if you qualify) at one of the discount online brokerage firms such as fidelity.com, etrade.com, etc.

You will then be able to invest in a wide variety of stocks, ETFs, and mutual funds.

At a local bank, you're pretty much limited to CDs and/or money markets as investment options.

What? OMG!!!

Bear Stern . lol

Definitely broker, I'd try Fidelity or Vanguard. Call them each up, talk with them, and make a decision. They both are discount brokerages. T Rowe Price is another great choice as might be Scottrade for their no-load NTF funds (i.e. ValueLine, VALIX). I like all four brokers; they tend to each have great service.

I'm assuming that you're not holding your emergency fund in the RothIRA, but are instead holding what will be for retirement.

Clark is brilliant and I agree with the subsequent poster.

Remember that long-term money should be invested in stocks for the possibility of not beating inflation. Also, it has in the past followed that if you wish to get a higher average return, you had to take on more risk to achieve that goal. Index funds are a great investment vehicle.

ditto MsMojo - take a look at this. Clark won't lead you wrong http://clarkhoward.com/topics/investing_...

"Better" is subjective. What do you want your IRA to be invested in? That is what you need to decide first. An IRA is just a "basket" to hold your investments - they can be CDs, money market funds, mutual funds, stocks, etc. Its up to you to decide. Only then will you know the "best" custodian to use.

Everyone must have forgot this was a two parter question.

Investment firms (mutual fund companies) make their money off of an expense ration, charged by the fund itself. This is deducted from any dividends and capital gains before they are distributed to shareholders - so you won't see it on your statement.

Banks make their money by screwing you.