T Rowe Price Annual Service Fee for Low Balances To Increase

We got a notice that there are some upcoming account changes to my wife's IRA accounts at T Rowe Price. The main change that affects us is that they are now imposing a $20 annual service fee for accounts with less than a $10,000 account balance. The other change is a $20 closeout fee for IRA accounts that are closed, transferred, etc which is waived if you have paid the annual service fee. Both of these fees are up from a $10 fee previously.

My wife has 1 account at T Rowe Price with an account balance of less than $10,000. It was a non deductible traditional IRA we opened and partially funded for 1 year while we were on assignment in China back in 2008.

The annual service fee at T Rowe Price is determined based on account balances on the last business day in August and charged in early September.

We went ahead and initiated a Roth IRA conversion for the account which will convert the funds to a Roth IRA and merge them with her existing Roth IRA account. This will eliminate the low balance account and subsequent annual fee. We'll likely be hit with the $10 close out fee, but it will be less than the $20 annual service fee.

Stupid nickel and dime fees like these frustrate me to no end. This may be the motivation I need to get my wife's accounts transferred to Vanguard where we keep my retirement and our joint accounts.

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Comments (6)

Thanks for the post. I think I went through a serious evaluation on where to put my retirement money. In the bargain, I signed up with 5 or 6 brokerages just to get a 'feel' of how these firms function.

I almost considered trp but never signed up. Had a feeling they would pull something like this.

Vanguard funds are great, but they could work on their site a bit more.

I hate it when companies pull this crap.

2Mil, Try to pay the fee with external money instead of money from the account. That way all your investment dollars stay invested. They are required to let you do this but most reps don't understand. You might need to push a bit.

A LOT of banks and financial institutions are coming up with these petty little fees these days. They frustrate me, too.

I wouldn't touch T. Rowe Price with a ten foot pole. Took me 4 phone calls to close out my account with them as, regardless of what their customer service rep said, there is NO way to close it online. Worst website I've ever used but,IMO, it's set up that way deliberately to make it difficult for customers to close accounts. Because of that, I would never use them again.

I try to move everything I have to Vanguard except for a few cash bank accounts. I would probably reduce those too except that money market funds at vanguard are paying less than some bank accounts.

If you didn't notice T. Rowe Price fee and didn't manage to pay it with external money like somebody suggested, they actually sell your shares on your behalf to pay themselves this fee. So to add insult to injury, you now have taxable transaction and have to report it to IRS.

I've never heard about anything like this at other brokers and getting out ASAP.

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A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,938,393


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