That is necessary so the bank has a record of the transaction. The check is mailed to the bank with instructions to have the bank issue a check payable to the investment club. It can be deposited in an account and used through the year for investments. It is suggested that the total amount earmarked for the IRA be invested at one time to save on transaction fees from the bank. The bank also requires a copy of the partnership agreement naming them as the limited partner.
Records have to be kept by the club as to the value of each account.
It may also be necessary for the club to have a regular account in addition to the IRAs. Decisions can then be made for investments in the normal manner, whether through a broker or by using the NAIC Low Cost Investment Plan. The tax identification number of the club would be used when registering the various purchases. It sounds a bit complicated, but once the routine is established, it really is not much of a problem. The procedure is one which allows for a self-directed IRA without large commissions or fees.