An individual retirement account (IRA) is an investment vehicle for your retirement investments. The IRA holds your investments and shelters them from taxes while providing other benefits.
Because IRA accounts offer such significant tax savings (in the long run), they’re a savings vehicle that nearly every investor should consider.
We’ve reviewed the best IRA accounts based on factors like investment options, usability, cost, and customer experience.
10 Best IRA Accounts
Here are the best IRA accounts of November 2023:
- 🏆 Betterment: Best Robo-Advisor
- Fidelity: Best for Hands-On Investors
- J.P. Morgan: Best for New Investors
- Charles Schwab: Best for Customer Support
- Vanguard: Best for Low-Cost Funds
- Ally Invest: Best for Options Trading
- Wealthfront: Best for Financial Planning
- TD Ameritrade: Best for Commission-Free Trading
- Merrill Edge: Best for Market Research
- E*TRADE: Best for Advanced Traders
1. Betterment
- Best: Robo advisor
- IRAs offered: Traditional, Roth, Inherited, SEP
- Account minimum: $0
If you prefer to keep things simple with a more hands-off approach, Betterment is an IRA provider worth considering.
When you invest with Betterment, all you have to do is determine your risk tolerance and let the robo advisor handle the rest. You also have the option to manually specify what percentage of stocks and bonds you want to keep in your portfolio.
Betterment will invest your money in a diversified portfolio that covers the entire market. They’ll also automatically rebalance your portfolio, so you don’t have to worry about it getting off target.
You’ll pay a 0.25% management fee or a $4 monthly account fee for these services.
2. Fidelity
- Best for: Hands-on Investors
- IRAs offered: Traditional, Roth, Rollover, Inherited, Inherited Roth, SEP, Simple
- Account minimum: $0
Fidelity is packed with all the features that hands-on investors need to actively manage their IRAs.
When it comes to trading, Fidelity offers a low-fee solution for active investors, with commission-free trades on ETFs, options, and more than 3,700 mutual funds. You can also invest in fractional shares.
The platform has a wealth of educational resources, calculators, and retirement planning tools to help investors make informed trades.
Fidelity’s website is also easier to navigate than competitors like Vanguard’s. Plus, it boasts excellent customer support, including physical locations if you prefer to meet with an advisor in person.
Fidelity also offers an automated investing tool called Fidelity Go and advisor-managed portfolios.
3. J.P. Morgan Self-Directed Investing
- Best for: New Investors
- IRAs offered: Traditional, Roth
- Account minimum: $0
J.P. Morgan Self-Directed Investing has a lot to offer to active traders, and it’s especially apt to meet the needs of new investors.
Investors can open traditional and Roth IRAs with no minimum deposit requirements.
The account provides unlimited commission-free stocks, exchange-traded funds (ETFs), options, and mutual fund trading.
One of the platform’s biggest draws is its user-friendly interface. Beginning investors can easily execute trades, manage their accounts, and access investing tools online.
It’s a great fit for Chase bankers, who can easily access all their banking and investing accounts in one spot.
J.P. Morgan also has a robo-advisor and a Personal Advisor service that gives you access to a team of dedicated financial advisors if you don’t want to actively trade or want tailored financial advice.
INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
4. Charles Schwab
- Best for: Customer Support
- IRAs offered: Traditional, Roth, Rollover, Inherited, Custodial, SEP, Simple
- Account minimum: $0
Charles Schwab offers comprehensive personal finance management that stands out in today’s competitive market.
The trading platform has an extensive lineup of IRA products and plenty of tools to manage them.
The firm’s banking, customer support, and investing products are all top-notch.
Schwab offers commission-free trades on stocks and ETFs. Plus, Schwab offers its own ETFs, in addition to funds from the other big names in the investing industry.
If you need help with any of your trades, Schwab has excellent 24/7 support. Whether you’re a beginner investor or have a multi-million dollar portfolio, you’ll enjoy the same great experience working with the Schwab support team.
5. Vanguard
- Best for: Low-Cost Funds
- IRAs offered: Traditional, Roth, Rollover, Spousal
- Account minimum: $0
Vanguard has long been considered the gold standard of investing. Today, it remains the largest provider of mutual funds due to its immensely popular low-cost, no-load funds.
While other firms have risen to the challenge and begun to offer attractive funds of their own, Vanguard has remained a strong competitor. To stay competitive, Vanguard has an ever-growing list of commission-free stocks and ETFs.
Investing in a Vanguard IRA gives you access to a wide variety of asset classes, including both domestic and international stocks and bonds.
However, one thing to keep in mind is that as good as Vanguard’s funds are, you will only be able to invest in Vanguard funds here. Other names on this list will let you invest elsewhere.
6. Ally Invest
- Best for: Options Trading
- IRAs offered: Traditional, Roth, Rollover
- Account minimum: $100 for Robo Portfolio; $0 for Self-Directed Trading
Many people prefer a “set it and forget it” approach to investing where they invest in a handful of funds and allow their money to grow for decades.
But if you prefer a more active approach, Ally Invest is a great choice, with commission-free stock and ETF trades.
Ally excels at offering low-cost options trading, with a $0.50 fee per contract that’s lower than most competitors.
You can also invest in stocks and funds from popular firms such as Vanguard and iShares. While you can’t directly invest in crypto, you can invest in funds that hold cryptocurrency.
As a bonus, Ally offers IRA savings accounts and IRA CDs, which have competitive APYs.
7. Wealthfront
- Best for: Financial Planning
- IRAs offered: Traditional, Roth, Rollover, SEP
- Account minimum: $500
Wealthfront is a great choice for beginner investors who understand the importance of investing early and often but may need a little more guidance.
It provides automated investing at a low price point of 0.25%. It’s also worth noting that you’ll need a $500 minimum deposit to get started with the brokerage.
Wealthfront allows you to set goals and invest in traditional, Roth, and SEP IRAs. You can also roll over old retirement accounts into a Wealthfront IRA.
Wealthfront also automatically rebalances your investments and provides a ton of resources to help you plan for your financial goals into retirement.
8. TD Ameritrade
- Best for: Commission-free Trading
- IRAs offered: Traditional, Roth, Rollover
- Account minimum: $0
If you’re among the ranks of those expecting commission-free trading, TD Ameritrade doesn’t disappoint.
TD offers hundreds of commission-free ETFs from iShares, Invesco, and more. You can also trade stocks and options commission-free and have access to more than 18,000 mutual funds with no transaction fees.
In addition to these options, TD has a variety of tools and calculators to help you plan your retirement strategy.
This includes the FeeX fee analyzer, which can help spot costly fees on your old retirement accounts. These benefits and more make TD a great place to invest your IRA.
9. Merrill Edge
- Best for: Market Research
- IRAs offered: Traditional, Roth, Rollover, SEP, Simple, Inherited
- Account minimum: $0
As a subsidiary of Bank of America, Merrill Edge has an edge over some of the online brokers we’ve reviewed, giving you access to in-person assistance at BofA branches.
This also makes it an ideal choice for current Bank of America account holders, who can manage their bank accounts and IRA in one spot.
Merrill provides several retirement and brokerage accounts, with no minimum balance requirements and a variety of assets with no trading commissions.
Merrill also stands out for its market research. When you open an account, you get access to industry-leading market data to help you make informed investing decisions.
For example, you can access “fund stories” for Merrill’s mutual funds, which break down the makeup of each fund.
10. E*TRADE
- Best for: Advanced Traders
- IRAs offered: Traditional, Roth, Rollover
- Account minimum: $0
E*TRADE, which is now a part of Morgan Stanley, is one of our top picks for experienced investors.
The brokerage firm has plenty to offer novice investors, with automated investments and a simple user-friendly trading platform.
But it packs a more powerful punch with its advanced trading platform—Power E*TRADE. Investors can access complex charting and analytical tools to help them manage their risk and invest wisely.
Best of all, Power E*TRADE is available on desktop and mobile, allowing you to research and execute trades on the go.
E*TRADE has a solid lineup of investments, with commission-free trades on ETFs, stocks, mutual funds, and options, $0.50 options contracts, and $1.50 futures contracts.
How To Choose an IRA
Choosing your IRA account is a separate task from selecting your investments. When you invest your money, some principles are universal, such as keeping your expense ratios and management fees low.
However, choosing an IRA account is a little less straightforward because each one has advantages and disadvantages.
It also depends on your investing strategy—will you be an active investor or more of a passive investor?
Most firms have commission-free trading, but some still do not. Similarly, some IRA accounts offer comprehensive customer support, while others are lacking.
Also, depending on the type of investment vehicle you choose, there may or may not be management fees. Some robo-advisors, for example, charge management fees or annual fees in addition to expense ratios levied on the funds.
In summary, here are some factors you should consider when choosing an IRA:
- Trading fees
- Management fees
- Expense ratios
- Customer support
How To Open an IRA
Opening an IRA is easy.
Simply head to the website for your preferred investment broker, fill out a few questions, and you’ll be ready to start funding your account.
You’ll also need to provide some personal details, such as your name, address, and Social Security Number.
Then, you’ll be able to link your bank account to fund your new IRA. You may also be able to set up payroll deductions if you find that more convenient.
Benefits Of An IRA
The main benefits of an IRA are the tax advantages.
- Traditional IRA, contributions are tax-free, but withdrawals are considered taxable income.
- Roth IRA, the opposite is true, and you invest after-tax dollars.
With both types of IRA accounts, your money grows tax-free—this is the single biggest advantage of an IRA.
If you have a taxable investment account, you must pay taxes on your investment income each year. This is not the case with an IRA.
Roth IRAs and tax-deferred traditional IRAs both have their tax benefits. Evaluate your finances and future goals to determine the best fit for you.
Frequently Asked Questions
Is it better to put money in an IRA or CD?
While certificate of deposit (CD) accounts offer a guaranteed return, the return will be much lower than you would get investing in stocks.
Ultimately, the right choice depends on your investment goals, risk tolerance, and time frame for accessing the funds.
Can you lose all your money in an IRA?
While it’s not very likely, it is possible to lose all your money in an IRA. This can happen if you make poor investment choices, put all your eggs in one basket, or the value of your investments declines significantly.
Investing in an IRA involves risks and there are no guarantees of returns, but you can mitigate the risk by carefully researching and diversifying your investment portfolio with mutual funds and ETFs.
How easily can I access that money?
As a general rule, you must be age 59 ½ to be able to withdraw money from a traditional IRA. If you withdraw money before that, you’ll be taxed and subject to a 10% penalty.
The exception comes with Roth IRA accounts. With a Roth IRA, you can withdraw contributions before age 59 ½ without being penalized, since your contributions have already been taxed.
Am I eligible to save on taxes with an IRA?
Most investors are eligible to save on taxes with an IRA, although there are some exceptions. For example, if you have a retirement plan with your employer and a traditional IRA, your tax deduction may be limited if your income is too high. The same is true if any of these criteria apply to your spouse.
Roth IRAs are not tax-deductible.
What Is the IRA contribution limit?
The IRA contribution limit in 2023 is $6,500. The catch-up contribution limit for those aged 50 and over is $7,500.
These limits include both Roth and traditional IRAs. You can have and contribute to both accounts, but you can’t contribute more than $6,500 (or $7,500) between the two per year.
What Is the difference between a traditional IRA and a Roth IRA?
There are a few key differences between traditional IRAs and Roth IRAs:
- Traditional IRA contributions: With a traditional IRA, contributions are tax-free, but withdrawals are taxed as income.
- Roth IRA contributions: With a Roth IRA, contributions are taxed, but withdrawals are tax-free.
- Traditional IRA withdrawals: There will always be a penalty if you withdraw money early from a traditional IRA.
- Roth IRA withdrawals: With a Roth IRA, you may withdraw contributions at any time with no penalty (but not earnings).
When should you open an IRA?
The ideal time to open an Individual Retirement Account is as early as possible. By starting early, you give your money more time to grow through compounding interest. This means that even small contributions made in your younger years can have a significant impact on your retirement savings.
Additionally, opening an IRA sooner rather than later allows you to take advantage of tax benefits and deductions. So, if you’re thinking about saving for retirement, don’t wait—open an IRA now to maximize your savings potential.
Where Is the Best Place to Open an IRA Account?
The best place to open an IRA account depends on your retirement savings needs and investing preferences.
It’s generally a better idea to open an IRA online rather than through your local bank or credit union because these online investment firms will offer you premium investment options on the market at the lowest rates possible.
Take a few moments to compare the features, fees, and customer experience of the brokers in this review and choose one that suits your needs.
You can also consult with a financial advisor, such as a certified financial planner (CFP) to outline your goals.
Our Methodology
To provide you with an accurate list of the best places to open an IRA account, we thoroughly assessed more than a dozen investment brokerages across several metrics.
Specifically, we evaluated the following features of each company:
- Account offerings: We considered the variety of investment accounts and investable assets.
- Types of investment services: Additionally, we looked at each company’s services, such as self-directed trading, actively managed accounts, and robo advisors.
- Customer service: We considered customer reviews, third-party ratings, and the accessibility of online or in-person customer service.
- User experience: We also factored in each broker’s ease of use, looking at their websites and assessing their average app store ratings.
- Educational content: Another important factor in our assessment was education tools. We explored the library of learning resources for investors.
- Fees: We also evaluated each company based on their trading fees, transaction fees, and account management fees.
- Low minimum investments: We also aimed to include providers with low or no minimum investment requirements.
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