I have a couple of IRAs (one roth, one traditional), at a local credit union for state employees where I live. I'm fairly young, so the money has simply been in interest-bearing accounts to date. However, I've gotten to the point where I have enough money built up in there that I can move it over to an investment account instead of a simple interest-bearing account.
If I stick with the credit union and turn my IRAs into investment accounts, they essentially repackage mutual fund products from Fidelity. So, I'd be investing in mutual funds, and they seem to have a pretty reasonable selection of portfolio options so I'm fine with that.
My question is this: The credit union can charge .25% per year of the total amount invested as an administrative fee. In addition, Fidelity can charge an additional .25% on top of that, for a total of .5%. Given expected rates of return of, say, 7%, that's like losing 7 or 8% of my investment earnings to admin fees. Is that reasonable? Are there cheaper options out there that I'd be missing out on?
UPDATE: To be clear, the .5% administration fees are the ONLY fees I would be paying - no load fees, etc.