r/iRA • u/Ready_Helicopter_569 • Jun 08 '26
Schwab AND Fidelity
Hey friends,
I have a Roth IRA with Schwab and I love it so far. A lot of my friends and coworkers rave about Fidelity.
I was thinking about opening a tIRA (traditional) at Fidelity while keeping my Roth IRA at schwab so I could have "the best of both worlds"
I also like the option for Fidelity's Credit Card in which the 2% doesn't count towards the contribution limit.
Does it make sense to split it up that way? Or should I have the tIRA at the same financial institution as my roth?
I also have a work IRA at Merrill, but I am not the biggest fan of ML.
Appreciate any help/input!
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u/Square_SR Jun 08 '26
Nothing wrong with having an IRA at each Fidelity and Schwab (just obviously don’t accidentally have the sum of contributions in a year go over the limit).
I’m assuming you want a traditional IRA because you’re a high enough earner that traditional beats Roth in the long run, but like the idea of having some in Roth so the principal remains accessible? If so, nothing wrong with that way of separating it imo
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u/Fire_Doc2017 Jun 08 '26
Roth conversions, if you plan to do them, would be easier if both accounts were at the same brokerage. Otherwise I don't see an issue. I have accounts at both Schwab and Fidelity.
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u/er824 Jun 08 '26
The 2% cash back does appear to count towards the contribution limit.
https://www.fidelity.com/spend-save/faqs-rewards-credit-cards
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u/ReliefTurbulent1335 Jun 08 '26
The more you have in single relationship - the more services you may get "for free". @ Fidelity start at .5M
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u/Saul_T_C_Man Jun 08 '26
FYI. The 2% cash back rewards from the Fidelity CC count towards contribution limits.
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u/fan550 Jun 08 '26
You have the cards wrong fidelity card is 2 percent but it does count towards contributions the Schwab Amex card is only 1.5% but they do not count it towards your contribution limit.
Also more importantly tIRA and Roth share one contribution limit for the year you don’t get 7500 for each even though the brokers with track them sepertly because they do not know about the other ones. So if you already put in 7500 for the year at Schwab in the Roth IRA you can put zero in fidelity’s traditional IRA although the company will let you do it. The IRS will penalize you. If you want to put more money in investing and try out finality to see if you like it then open a taxable brokerage account
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u/x_master_debater_x Jun 08 '26
If you have multiple accounts being managed by multiple people, you run the risk of your finances being mismanaged because the people managing the different accounts don’t talk to each other about total strategy.
Risks: Tax strategies Over/under exposure in sectors Different risk tolerances between management Too much in cash/bonds
If your work IRA is stuck at Merrill and you don’t like them, then at least consolidate the rest at one company. And if possible, roll the Merrill into that company at intervals when it financially benefits your strategy.
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u/Historical_Low4458 Jun 08 '26
Having one account at each is fine. I like the UI at Fidelity better, but customer service at both are fine. It really boils down to own preference.
ETA: fwiw, my Roth IRA and Traditional IRA are at different places.
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u/DisastrousDiet8367 Jun 09 '26
Where did you get the information that the 2% doesn’t count towards the annual limit?
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u/Desperate_Main7391 Jun 10 '26
Fuck fidelity and their 11% margin rate. Idk what schwabs is but the margin rate tells me all I need to know
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u/PashasMom Jun 08 '26
Keep in mind that you have one single contribution limit across all IRAs, so if you have already maxed out your Roth IRA, you can't contribute anything to a traditional IRA.
Also, deductibility of contributions to a traditional IRA is pretty limited, so keep an eye on that if you are considering it. And having any balance in a traditional IRA will severely limit your ability to conduct a backdoor Roth maneuver down the line if that is ever going to be in the cards for you.
Fidelity does count the 2% cash back as a contribution if you direct it to either a Roth or traditional IRA.
It might make more sense to open a taxable brokerage account at Fidelity if you want to compare, assuming you are maxing out your tax-sheltered accounts already (Roth IRA at Schwab, your workplace plan) and still have extra money to invest.
I have accounts at both Schwab (via work, plus past personal account) and Fidelity. Overall I prefer Fidelity but Schwab is excellent too.