Frequently Asked Questions

Common Questions & Answers

Questions about our platform and its features? Want to know more about our fee schedule and fee tiers? Just interested in learning more about how a crypto IRA works? Browse some of the most commonly asked questions and answers we receive from our customers below.

How Do I Roll Over An IRA

At My Digital Money, we make the IRA transfer process easy. Once you've created your account and indicated that you'd like to transfer an existing IRA, a member of our customer success team will reach out to start the process. We'll gather information from you about your current custodian and account, and then we take care of everything from there. Our team has existing relationships with many of the top IRA custodians as well as automated processes that streamline rollovers, allowing us to complete most IRA transfers within just a few days.

How Do I Transfer An IRA From One Institution To Another

Simply complete an application by opening a new account. The application process will collect all of the necessary information that is needed for our custodian, Equity Trust, to initiate the transfer on your behalf. That's all you need to do. There is no need to contact your financial institution. We do all of the work for you. We will contact you if your financial institution requests more information.  Please confirm that your IRA is in a cash position before we submit your transfer.

Can I Transfer A Roth IRA To A Crypto IRA?

Yes, you can transfer any type of IRA including a Roth IRA to a crypto IRA of the same type. For example, if you have a Traditional and Roth IRA that you want to transfer, you will have to open both a Traditional and Roth IRA account with My Digital Money and initiate two separate transfers for each of the account types.

How Long Does An IRA Transfer Take

An IRA transfer can usually be completed within 2-3 days. However, in some cases, the process can take a little longer.  Since My Digital Money can communicate with your IRA custodian on your behalf, our team can ensure the process is completed as quickly as possible. We have relationships with many of the top IRA custodians and processes that allow us to streamline IRA transfers for our customers. We find that most customers who transfer their IRA to My Digital Money are usually able to start trading within about five days.

How Many Times Can You Rollover An IRA?

The IRS only allows you to roll over an IRA one time per year. In addition, you also can't make a rollover during this 1-year period from the IRA to which the distribution was rolled over. As of January 1, 2015, the IRS added a new rule stating that you can only make one rollover in any 12-month period, regardless of the number of IRAs you own. The limit bundles together all of an individual’s IRAs and treats them as one IRA for purposes of the limit. This limit does not apply to:

  • rollovers from traditional IRAs to Roth IRAs
  • trustee-to-trustee transfers to another IRA
  • IRA-to-plan rollovers
  • plan-to-IRA rollovers
  • plan-to-plan rollovers

Can I Invest In NFTs?

While you can't invest directly in NFTs just yet on My Digital Money, we do offer a few ways that you can get exposure to Web3 assets in your crypto IRA. We offer a few coins on My Digital Money such as Decentraland (MANA) that could be considered NFT "adjacent" due to their usage in virtual reality, video games, and other applications that require a non-fungible token.

Can I Roll Over A 401(k) To An IRA?

Absolutely. If you're no longer happy with your 401(k) or simply want to move the funds to a self-directed retirement plan, you can roll over your 401(k) to an IRA without incurring any taxes or penalties. There is no limit on the amount that you can roll over and, once complete, you will have access to a much larger variety of investment options. Unlike an IRA transfer, we can't handle this process for you, but our team is ready and able to help with every step of your 401(k) to IRA rollover.

You can only roll over a 401K for a non-active employer, one that you are no longer contributing to.

Can I Move My 401(k) To An IRA Without Penalty?

Yes, you can roll over your 401(k) to an IRA without incurring any taxes or penalties. The process must be completed within 60 days of the funds being withdrawn from the 401(k), or they will be subject to a penalty. While this may sound like a non-issue, many 401(k)s will send physical checks instead of online transfers, so it's essential to be on top of timelines so that you can deposit the funds within the allowable window.

Does It Cost Money To Roll Over A 401(k) To An IRA?

There are no fees or hidden costs for you to roll over your 401(k) to a crypto IRA on My Digital Money. The only caveat is that the funds must be deposited within 60 days of the withdrawal or you will incur a penalty. Additionally, there will be some tax consequences if you roll over your 401(k) into a Roth IRA, as a Roth IRA is taxed at the time of contribution.

How Long Does A 401(k) Roll Over Take?

The 401(k) rollover process takes slightly longer than an IRA transfer. Unlike an IRA transfer, we are not allowed to communicate with your plan administrator; only you can request the rollover. However, our team is more than happy to help you compile any necessary information and documents and provide you with exact instructions on what to request from your administrator. One of the reasons that a 401(k) rollover takes longer than an IRA transfer is that plan administrators will typically send the funds with physical checks, not electronic transfers. Since processing and shipping a physical check takes more time, we find that most customers who roll over a 401(k) can start trading in their crypto IRA within about two weeks.

What Is A Crypto IRA?

A crypto IRA is a retirement account that is just like a traditional IRA, except it allows you to hold cryptocurrency instead of more traditional investments, like stocks or bonds. The main benefit of a crypto IRA is that it allows you to diversify your retirement portfolio with a new asset class that has the potential to grow at a higher rate than more traditional investments. You can learn more about what a crypto IRA is in this article.

How Do I Buy Crypto In An IRA?

Buying crypto in an IRA is actually very similar to buying crypto in a standard trading account. First, you'd sign up with a crypto IRA platform like My Digital Money and fund your account. Once your account is set up and the funds have cleared, you can start trading cryptocurrencies as you would on any other platform. The big difference is that all of the trades executed in the IRA will be allowed to grow tax-free until they are disbursed.

What Type Of Crypto Investments Can I Put In An IRA?

My Digital Money currently offers 20 cryptocurrencies that can be traded in an IRA. Our team carefully researches and reviews each coin before making it available for purchase in an IRA by our customers.

How Many IRA Accounts Can I Have?

You might be surprised to learn that there is actually no limit on the number of IRAs that you can have. However, there are limits on the amount that you can contribute to the IRA each year that would be subject to tax advantages. Currently, you are allowed to contribute up to $6,000 per year to an IRA, or $7,000 per year if you are over 50.

How Is An IRA Taxed?

Your IRA can be taxed in one of two ways depending on the type of IRA it is. A traditional IRA is taxed at the time you make a withdrawal from the account. On the converse, a Roth IRA is taxed at the time of the contribution so no tax is due when you withdraw your assets. Keep in mind, if you withdraw your funds early they will likely be subject to a 10% penalty.

How Much Will An IRA Reduce My Taxes?

When you contribute to your traditional crypto IRA, you are able to deduct the full amount contributed from your taxable income. This means that if you've earned $100,000 in a tax year and you make the maximum contribution of $6,000 to your IRA, your taxable income will only be $94,000. Th maximum contribution limit is imposed by the IRS and is $6000 - $7000 depending on your age. See your Tax Accountant for your specific situation and guidance.

What Is An IRA Custodian?

An IRA custodian is a licensed and regulated institution like a bank, credit union, or non-depository bank that holds IRA assets. There are various types of custodians such as third-party custodians and self-directed custodians. When you invest in a crypto IRA on My Digital Money, your assets are held in trust by our custodian, Equity Trust. Learn more about how custody works here.

How Can I Diversify My IRA?

The best way to diversify your IRA is to open a self-directed IRA like a crypto IRA. A self-directed IRA will allow you to invest in a number of non-traditional assets such as real estate, art, precious metals, and even cryptocurrency. Diversifying your retirement savings with alternative investments is a great way to hedge against inflation and unexpected volatility in traditional markets.

Can I Borrow From My IRA Without A Penalty?

Technically, you are not allowed to borrow any funds from your IRA, and any withdrawals made before the maturity date are subject to taxes and penalties. However, any funds that are withdrawn can be repaid within 60 days and will not be taxed or subject to penalties.

How Can I Diversify My IRA?

The best way to diversify your IRA is to open a self-directed IRA like a crypto IRA. A self-directed IRA will allow you to invest in a number of non-traditional assets such as real estate, art, precious metals, and even cryptocurrency. Diversifying your retirement savings with alternative investments is a great way to hedge against inflation and unexpected volatility in traditional markets.

Can I Automate My Trades On My Digital Money?

We apologize that our automated trigger orders are currently disabled due to a recent switch in liquidity provider. We are in the process of finding and adding more liquidity providers and are working diligently to bring back this feature. My Digital Money's Automatic Trigger Orders are designed to allow investors to automate both buying and selling based on predetermined "price triggers".  For example, you can automatically sell any coins that you own once they've dropped to a certain price to avoid any unacceptable losses. Or you can create automated buy orders to purchase more crypto once it hits a certain price, allowing you to maximize your potential gains by "buying the dip".

What Would Happen To My IRA If My Digital Money Goes Out Of Business?

Because your assets are stored in a trust, even if My Digital Money were to go out of business, you would still retain full ownership of your account and assets. In this scenario, you would just have to transfer your IRA to a new custodian to avoid any taxable events or penalties. This is one of the biggest benefits of trading crypto on My Digital Money.

Can My Digital Money Lend Or Leverage Against My Assets?

My Digital Money does not ever lend, leverage, borrow, or otherwise use your assets in any way. All assets on My Digital Money are held in trust with our custodial partner, Equity Trust. Your assets are never comingled with our operating funds and are stored in an institutional wallet by the custodian.

How Does My Digital Money Secure Crypto Assets?

My Digital Money provides military-grade security for all crypto assets via our partnership with Genesis, a global leader in institutional digital asset markets. Genesis facilitates billions of dollars of digital currency transactions each month, making its infrastructure ideal for secure crypto IRA transactions. Genesis is a NY DFS-Bitlicensed entity, registered as a securities broker-dealer with the SEC and FINRA. They provide two-sided liquidity for buyers and sellers of digital assets and derivatives, backed by proven technology and an expert team of trading professionals. Complete large orders rapidly and reliably.

Does My Digital Money Cap Crypto Wallets?

To limit the potential harm, My Digital Money caps each crypto wallet at $20 million. Attacks are considerably easier to control and mitigate when assets are distributed across multiple wallets.

Is My Crypto Insured?

Yes, all crypto stored on My Digital Money is insured by digital asset and vault risk insurance. These policies cover any theft of your crypto, as well as damage or destruction of your crypto while they are held by our custodian.

Are There Any Platform Fees On My Digital Money?

While there are no monthly fees to use My Digital Money, there is a platform fee that covers all of our services including security, customer support, technical, and administrative services. This fee ranges from .9% to 1.9% depending on the amount of assets you have in your account.

What Is A “Custodian Liquidity Cost”?

The price of any digital asset purchase or sale order may include a Liquidity Cost up to 1%, which is included in the final price shown to you. The Liquidity Cost covers among other things; account maintenance and custodial services, trading, and other administrative costs incurred by Equity Trust.

How Do I Pay Fees?

We offer customers two ways to pay their fees:

  • Fees can be taken directly from your IRA
  • You can pay fees with credit card or ACH transfer.
To pay via Credit Card: If you're interested in paying via ACH or wire transfer, you can contact our customer success team for more information.