Ask the Fool Moving Your IRA Money

Q:

In my IRA, can I shift money invested in mutual funds into other mutual funds or individual stocks?

- K.T., Henderson, Ky.

A:

If your IRA is maintained by a brokerage, you should be able to move your money from one fund to another and to and from individual stocks. You won't have to pay taxes on any gains, but you probably will have to pay trading commissions.

If your IRA is with a mutual fund family, you can probably switch among its own funds with minimal or no charge. You might not be permitted to invest in individual stocks at all. If so, you might consider transferring your IRA to a brokerage. Learn how to find the best brokerage for your needs at

» READ MORE: www.broker.fool.com

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Q:

What's the prime rate?

- G.B., Reno, Nev.

A:

It is an interest rate (found in most newspapers' business sections) - one that banks charge their best (lowest-risk) commercial customers. It is important because lots of other interest rates, such as mortgage rates, home-equity rates, credit card rates and other business loans, take their lead from the prime rate. A car-loan rate, for example, might be calculated by taking the current prime rate and adding a certain amount to it. There actually is not a single prime rate. Each bank may set its own, but the major commercial banks tend to sport the same one most of the time.

The prime rate does not change every day. It stays put for a while until major banks change their rates, generally moving in step with economic conditions. (That often happens when the Federal Reserve changes its discount rate, which is what it charges banks that borrow short-term money.)