What Banks Do Solo 401(k)? Updated 2023 List

Once you have decided that a solo 401(k) is the right retirement planto achieve your retirement goals, the next step is finding the right financial partner to set up and manage your plan. There are several options to choose from, including most notably:

• 401(k) custodians and facilitators

• Brokerage firms and wealth management companies

• Banks

If you are looking for the sense of security that comes with entrusting your retirement plan to a financial institution, then working with a bank might be your best course of action. What banks offer solo 401(k) services? Here are a few updated 2023 options to consider.

What Banks Do Solo 401(k)?

When it comes to banks offering a solo 401(k) investment product, there are two basic categories that these institutions fall into:

• Major banks with a national presence

• Smaller banks with a regional or online presence

Here is a comparative view of these two categories, along with a few notable options for bank-offered solo 401(k) programs in 2023.

Major Banks Offering Solo 401(k)

Major banks offer increased accessibility through their expansive network of branch locations and the peace of mind that brand-name institutions can provide. This option is particularly attractive if you already have an ongoing banking relationship with one of these banks. Here are a few options worth considering.

Bank of America

Through its wholly-owned subsidiary Merrill, Bank of America offers solo 401(k) and a host of other self-directed retirement plans, including SEP IRA, SIMPLE IRA, and traditional 401(k). It is important to note that the solo 401(k) offered by Bank of America is managed through a collaborative effort involving multiple entities. 

General oversight and custodial responsibility of the plan’s assets belong to Merrill. But administrative and recordkeeping duties are assigned to a third-party company, while investment and fiduciary responsibilities are held by another partner.

As far as setup and maintenance fees, here’s how they break down:

• $100 initial solo 401(k) plan setup fee

• $25 monthly administrative fee ($20 if the plan’s assets are below $250,000)

• $3 monthly recordkeeping fee

• A yearly administrative fee calculated as 0.52% of the plan’s asset value to cover fiduciary services, custodial services, investment oversight, and trading fees

Compared to competing solo 401(k) products, the plan offered by Bank of America may also have more limitations as far as the types of investments that are allowable like alternative investments such as real estate, notes, and others just to name a few. 

Wells Fargo

Another major bank offering a solo 401(k) is Wells Fargo. This plan is managed through Well Fargo Advisors, an investment arm comprising Wells Fargo, a network of broker-dealers, and a group of affiliated companies.

Setup and maintenance fees vary by account attributes and investment products and must be obtained through a Well Fargo Advisors representative. As far as the types of investments that this plan offers, these include stocks, bonds, mutual funds, and other advisory products.

Specialty Banks Offering Solo 401(k)

If you are a prospective investor who is wary of working with a major bank for your solo 401(k) banking needs, there are a handful of smaller banks that offer self-directed banking services tied to your retirement plan. It should be noted, however, that these banks do not administer or manage a solo 401(k) plan, but rather, provide associated banking services.

Here are a few options worth considering.

Solera National Bank

Based in Colorado, Solera National Bank offers a solo 401(k) facilitation program (i.e. in conjunction with your plan provider) providing:

• Banking flexibility with self-directing checking tied to your solo 401(k) account

• Other self-directed banking features, including online account management, debit card, checking, and electronic (wire) transfers

• Plan-driven lending to finance assets like a single-family home or rental property within the framework of a solo 401(k) through a nonrecourse loan.

Despite being a local community bank, Solera’s portfolio of value-added banking services for its solo 401(k) customers makes it an option deserving of serious consideration.

Titan Bank

Texas-based Titan Bank is another community bank offering a diverse suite of self-directed banking services specially curated to the needs of a solo 401(k) participant. These include:

• Non-recourse lending to a solo 401(k) plan

• Self-directed banking services including access to a network of 37,000+ ATM locations

• Free checking, debit card, and ACH transfers

Titan Bank openly embraces branchless, online banking technologies, making it a viable option for your solo 401(k) banking needs.

Conclusion

Major banks like Bank of America and Wells Fargo offer solo 401(k) programs that combine plan oversight (through affiliates and brokers) with self-directed banking. If you are looking to complement the management of your solo 401(k) with flexible banking, and possibly financing, then working with a smaller institution may be the way to go.