Opening an IRA is an important decision that shouldn’t be taken lightly. After all, it’ll help to ensure you have enough money to fund your retirement years.
Just about every bank, investment brokerage, and robo-advisor offers Individual Retirement Accounts (IRAs). But there are a handful of institutions that stand out above the rest. To help, here is our review of the best IRA accounts for 2021, including fees and features for each option. But first, if you aren’t sure what type of IRA account best suits your retirement needs, check out some of our guides on why and how to choose an IRA account and learn more about contribution limits.
In This Article:
Our Top Pick: Ally Invest
Ally is our top pick based on its ease of use, the myriad of DIY and managed portfolio options, and their affordable fees. We like that they offer some of the most affordable fee structures compared to other major brokerages. Plus, you may be eligible for volume trading discounts.
If you’re already an Ally customer, we like that you can move up to $250,000 a day from your Ally Bank account to your Ally Invest account or the other way around. In other words, transfer speeds may be some of the fastest, making it easy for you to start investing or using your IRA funds.
Our Selection Methodology
We evaluated over 12 companies when deciding what companies made the cut. Since some companies charge high fees or offer limited investment options, we narrowed our original list down by almost half. We looked at fees, investment options, customer service, and minimum investment requirements.
Best for . . .
Not every brokerage is the best fit for everyone, but that doesn’t mean they don’t shine in one specific area. We’ve broken down the best places to open an IRA by specific needs:
- Best overall: Ally Invest
- Best robo-advisor: Betterment
- Best for alternative investments: Wealthfront
- Best for both managed and DIY choices: E*TRADE
- Best full-service brokerage firm: Charles Schwab
- Best for small businesses: Fidelity Investments
- Best for women: Ellevest
Ally Invest may very well be the overall best place to open an IRA. Not only do they offer nearly unlimited investment options, but they also have one of the lowest fee structures in the industry.
You can trade exchange-traded funds (ETFs) at $0 per trade and no-load mutual funds at $9.95 per trade in your Ally Invest IRA account. They also offer volume trading discounts for high-frequency traders for those who are interested in using their Ally Invest account outside of their IRA.
In addition to self-directed trading, they also offer Cash Enhanced Managed Portfolios, which is a robo-advisor service. It requires no minimum investment requirements, and has no annual fee, but allows users to have some or all of their retirement portfolio professionally managed.
Ally Invest is also the first cousin of Ally Bank, the online bank that offers some of the highest interest rates on savings and CDs available anywhere.
With all that Ally Invest has to offer–investment options and low fees–you can’t go wrong with this platform.
Discover new opportunities with Ally Invest.
Read our full Ally Invest review.
Wealthfront is a robo-advisor, and one of the very best. If you’re looking for low-cost professional management of your IRA, Wealthfront is an excellent platform.
They offer a portfolio diversified between equities and fixed income investments, but also have alternative investments. Unlike most other robo-advisors, Wealthfront adds real estate and natural resources to the investment mix.
You can open an IRA account with as little as $500. The annual advisory fee for the account is 0.25%. But they’ll manage the first $5,000 for free. That means that you can have a $100,000 IRA account with Wealthfront fully managed for just ~$235 per year. They handle all the account management for you. All you have to do is fund your account.
Discover new opportunities with Wealthfront.
Betterment is Wealthfront’s larger, and somewhat better-known competitor in the robo-advisor space. In fact, Betterment is the largest independent robo-advisor.
Like Wealthfront, Betterment provides a fully managed investment portfolio. All you need to do is fund your account. They will allocate your portfolio between equities and fixed income investments for all types of IRAs offered. But they offer no alternative investments. However, unlike Wealthfront, Betterment has no minimum initial deposit requirement. You can sign up for the account and simply fund it with monthly contributions.
Betterment has two fee structures. The basic account has a 0.25% annual fee. The premium version, which requires a $100,000 account balance, has a 0.40% annual fee.
Discover new opportunities with Betterment.
Read our full Betterment review.
Similar to Ally Invest, E*TRADE’s IRAs offer an outstanding mix of almost unlimited investment options. It also features low pricing. You can trade stocks and ETFs for free, though mutual fund trades are a bit on the high side, starting at $19.99. However, they offer 4,686 mutual funds that are both no load and no fee. And for what it’s worth, they have 30 brick-and-mortar locations scattered about the country.
E*TRADE has no minimum account balance and no annual fee to worry about.
E*TRADE also has a managed portfolio option — E*TRADE Core Portfolio. This is E*TRADE’s robo-advisor entry, and it requires a minimum initial investment of $5,000. The annual management fee is 0.30%. Once again, this gives you the option to have at least some of your portfolio professionally managed. But you can still go the DIY route with the rest of your money.
Discover new opportunities with E*TRADE.
Read our full E*TRADE review.
One of the original discount investment brokerage firms, Charles Schwab has all the advantages of a traditional full-service brokerage firm that offers IRAs but their fee structure competes with those of discount brokerages.
You can trade stocks and ETFs for free. Mutual funds are a bit of a problem, however. They offer a handful of fee-free in-house mutual funds. But the commission on all others is up to a whopping $49.95 or 8.5% of your principal per trade.
They require a minimum $1,000 to start using the account, but they don’t charge an annual fee. And if you don’t feel like managing your own account, Charles Schwab also has a robo-advisor service. Charles Schwab Intelligent Portfolios provides users with professional investment management. It requires a minimum balance of $5,000, but there is no fee for the service.
Discover new opportunities with Charles Schwab.
One of the premier online discount brokers, Fidelity offers consumers an opportunity to open a traditional IRA, Roth IRA and 401(k) Rollover. They also offer a variety of small business retirement plans (like SEP IRA’s). There are no opening costs or annual fees for any of these IRA’s but if you decide to close them out for any reason, a $50 fee applies.
Here’s a short list of all the other investment accounts you can open up with Fidelity:
- Mutual Funds
- Options Trading
- Stock Trading
- Bonds and High Yield CD’s
- 529 College Savings Plan
Discover new opportunities with Fidelity Investments.
Elllevest is one of the best IRA accounts for women because it specifically focuses on their needs. The robo-advisor factors in women’s incomes (which are typically lower), longer life spans and their lifetime earnings curve into their portfolio suggestions. But don’t worry, men can also sign up for Ellevest (their portfolio suggestions will look different).
The robo-advisor charges a flat monthly fee that doesn’t require a minimum investment — existing Ellevest customers can choose to move into these plans or stick with the old pricing model.
The fees are called Money Memberships and fall under three tiers: Ellevest Essential at $1 a month, Ellevest Plus at $5 a month and Ellevest Executive at $9 a month. Each tier includes personalized investment recommendations through their algorithm. It also includes the ability to invest in their Impact Portfolios which aim to advance women on boards and senior leadership teams while making a positive social impact. The difference between the tiers is the discount members receive when working with a certified financial planner or career coach.
Discover new opportunities with Ellevest.
Read our full Ellevest review.
Do your research and compare factors that are important to you before choosing an IRA provider. Look at fees, minimum investment amounts and types of investments allowed in your portfolio. You’ll also want to consider how much hand-holding you want — for example, Betterment is pretty much hands-off whereas E*TRADE offers options for those who want to manage their account independently while getting assistance.