Who is the Custodian?

  • Created

Rocket Dollar works with Digital Trust, a Trust Company licensed in Nevada, for all IRAs. Rocket Dollar works closely with the custodian to service your account.

Digital Trust is a custodian of self-directed accounts whose role is non-discretionary and administrative only. The account holder must direct all investment transactions and choose the investments for the account. Digital Trust has no responsibility or involvement in selecting any investment.

What does a custodian do if I purchase an IRA?

Our custodian partner performs the custodial and administrative duties necessary to maintain the tax-deferred status of the IRA as well as executing investment directions received from the IRA owner. 

When an IRA custodian holds an asset on behalf of a self-directed IRA, the appropriate titling on the investment paperwork is: Custodian Name FBO: (Account Owner Name) (Account Type) or for example - “Digital Trust FBO: John Smith Traditional IRA”. 

The custodian also performs tax reporting of IRS Forms 1099-R and 5498 as required by the IRS. A custodian holding an asset does not mean it is safe from investment losses, nor is it a guarantee that an investor will not run into a prohibited transaction or other IRS-related issues. 

If you are unhappy with Rocket Dollar or our custody partner, you can move your IRA to another provider at any time.

What about the Checkbook IRA?

For the Checkbook IRA, the custodian creates the IRA that holds your LLC or Trust. This empowers you to complete transactions through the bank account associated with the LLC or Trust’s bank account.  In this case, the asset held by the custodian is either a single-member LLC or a Trust. Asset titling on these investment documents is in the name of the LLC or the Trust.

As of 2024, Rocket Dollar sells IRA Trusts for its checkbook IRAs. Your IRA owns the trust, and then all investments are held by the trust.

A Checkbook IRA allows you to make investments without going through a custodian to review and process each transaction. However, this can increase the risk of your IRA being involved with IRS-prohibited transactions or other IRS-related issues.

Funds that are either contributed from your bank account or transferred from other retirement accounts should first be sent to your IRA, and then through a Direction of Investment submitted by you, the investor, are sent from the custodian to your Checkbook IRA bank account. IRA distributions, contributions, transfers, and rollovers must be done through the custodian per IRS regulations.

Customers who bought a Checkbook IRA before 2024 have an IRA-LLC. For an IRA-LLC, the asset the custodian holds is a single-member LLC, which is owned by your IRA, and investments are held by the LLC.

What about custody with the Self-Directed Solo 401(k)?

Rocket Dollar provides plan documents that are pre-approved by the IRS, which how the plan is to be operated allows you to self-custody assets in the name of the retirement trust. There is technically no traditional "custodian" held in a retirement trust that is tied to your business or sole proprietorship. The custodial partner then custodies the assets held by the plan. The retirement plan, not you or your business, is owning the assets. Our partner bank then helps you custody of all cash in an FDIC-insured account.

Is your bank partner FDIC insured?

Yes. You can read more here. 

Who are the custodian partners Rocket Dollar works with?

Rocket Dollar’s primary banking partner for customer accounts is Bank United.

Can I choose my own Custodian and Bank? 

No. Rocket Dollar has chosen its partners based on an extensive review process. Most banks, while being able to open regular LLC or trust bank accounts, do not understand working with an IRA Trust, IRA LLC, or Solo 401(k). Direct custody clients won’t require an individual Bank United account and will work only with Digital Trust. If you are unsure which account to sign up for, please contact our sales team.

What about the IRS list of Approved Non-Bank Custodians?

When it comes to IRA custody, if you have a Trust Charter, you can custody IRAs and assets. Rocket Dollar does not have a trust charter but works with our custodian partner and their trust charter/custody capabilities. Digital Trust is a chartered trust company in the state of Nevada.

If other custodians are providing custody of my actual assets, what does Rocket Dollar do?

Rocket Dollar provides onboarding, technology, and service to make opening and operating a self-directed account as safe, simple, and efficient as possible. Regardless of the type of account you have with us, Rocket Dollar ensures that reporting and compliance are handled in a timely manner, as well as answers any questions you have along the way. Our support team is always on hand to provide assistance with transfers, rollovers, investments, or contributions. 

Rocket Dollar has also negotiated fees on your behalf with our service providers to ensure you always know what you’re going to pay, with no hidden fees.

Is Rocket Dollar a Broker, a Fiduciary, or a CPA?

No. Rocket Dollar is not a broker, as we do not sell or recommend specific investments. We feature partners who can accept retirement funds on our partner's page, but we do not vet or recommend specific deals on their platforms.

We are also not a fiduciary, which would take a level monthly, quarterly, or yearly fee to recommend investments based on your personal situation. We provide educational and informational content on our blog and Knowledge Base.

If you feel visiting a fiduciary advisor would assist you in selecting your investments, Rocket Dollar encourages you to do so. 

Rocket Dollar provides administration, technical, and support to help you with your Self-Directed IRA or Solo 401(k). Your monthly fees go to providing continued support and technical improvements to the Rocket Dollar customer dashboard.

If you still have questions, we encourage you to call our sales line at 855-762-5383 and our team would be happy to assist you.

Sign up now

Was this article helpful?

0 out of 0 found this helpful



Please sign in to leave a comment.