Best IRA Accounts: 2017 Top Picks

Brokers, Investing, IRA

NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent.

We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers.

 

An individual retirement account is a crucial part of building your retirement savings. In many cases, it’s the best place to save for retirement if you don’t have a workplace retirement plan like a 401(k), or if you’ve already maxed out that plan. You want to choose an IRA provider that offers a wide selection of low-cost investment options and won’t eat into your savings with extra fees.

(Want to know more about these accounts? Check out our guide to IRAs.)

Whether you’re opening your first IRA, using old 401(k) money to fund a rollover IRA or looking to transfer your existing IRA to a new broker, we’ve evaluated the options and selected the best traditional IRA account providers by category. The brokers and robo-advisors listed below have reasonable account minimums, low fees, strong customer service and an impressive investment selection. In most cases, that means a number of no-transaction-fee (NTF) mutual funds and commission-free exchange-traded funds (ETFs), both of which can be purchased at no cost.

 

Best IRA providers overall

These providers offer a large fund selection, high-quality customer service and reasonable account minimums and fees.

Charles Schwab and TD Ameritrade are ideal for retirement investors: They offer a wealth of retirement planning tools and resources, along with large fund selections that can be traded with no fees or commissions. Both brokers also have 24/7 customer service, local offices and online and in-branch educational offerings.

TD Ameritrade requires no account minimum, while Schwab requires a $1,000 initial deposit. However, that minimum is waived with auto-deposits of at least $100 a month. Schwab also offers an impressive selection of index funds with investment minimums of just $100.

Best IRA providers with no account minimum

These providers have $0 minimum investment requirements for IRAs.

In addition to our top-choice TD Ameritrade — which also has no account minimum — investors starting small should consider E-Trade and Merrill Edge. Both brokers require no account minimum to access their quality 24/7 customer service, including physical branches (Merrill Edge customers can visit advisors at 2,000 Bank of America locations).

E-Trade, which waives its account minimums on IRAs but otherwise requires a $500 initial deposit, will stand out to investors seeking commission-free ETFs: The broker offers more than 100 options. Merrill Edge also will appeal to customers of its parent company Bank of America, as accounts are integrated into a single login.

Best IRA providers for hands-off investors

Robo-advisors Betterment and Wealthfront manage your portfolio for you.

Betterment and Wealthfront are robo-advisors that manage your IRA account for you, building a portfolio out of low-cost ETFs.

Betterment is the leading independent robo-advisor, and has maintained its momentum despite strong competition, largely due to its low costs and robust lineup of retirement planning tools. The company charges 0.25% for its Betterment Digital offering, which offers in-app access to human advisors, and it also offers messaging and phone access to human advisors for a higher fee and required account minimum through its Premium service.

Wealthfront charges a flat 0.25%, but waives its fee entirely on the first $10,000 invested ($15,000 with a special promotion for NerdWallet readers). For a full comparison of the two services, check out our post on Wealthfront vs. Betterment.

Best IRA providers for active traders

These brokers offer low commissions plus extensive research and strong trading platforms.

Retirement investors would be wise to avoid playing the market within an IRA. But if you want to dedicate a portion of your IRA to stock trading — we’re talking 10% or less — you should be looking at commissions, research and tools when comparing providers.

Charles Schwab and Ally Invest offer $4.95 stock trades along with advanced tools and trading platforms. Ally Invest is best for frequent traders, as the broker offers discounts to investors who trade 30 or more times per quarter or who maintain an account balance of $100,000 or above. They pay just $3.95 per trade and 50 cents per options contract.

Charles Schwab is best for investors who want to combine a side of active trading with a solid portfolio of mutual funds: The company offers a large selection of no-transaction-fee funds and commission-free ETFs. Ally Invest doesn’t offer any of either. 

Best IRA providers for low costs

These providers offer a large selection of mutual funds and ETFs with low expense ratios.

If fees and expenses are your primary concern — and they should at least top the list — you should look to Fidelity and Vanguard (though Charles Schwab and TD Ameritrade, our top picks, are also strong contenders here).

Fidelity gives its clients access to an impressive selection of highly rated funds with expense ratios under 0.50%; many charge no transaction fees or commissions. The downside: The majority of the company’s mutual funds have a $2,500 investment minimum, but Fidelity waives that on many with auto-deposits of at least $200 a month. Investors should also consider the company’s robo-advisor, Fidelity Go, which has a $5,000 account minimum. The online advisor charges 0.35% — including investment expenses — of assets managed for retirement accounts.

Vanguard — which brought investors the index fund — offers a smaller selection of no-transaction-fee mutual funds and commission-free ETFs, but wins hands down on costs. The company’s funds have an average expense ratio of just 0.18%. Vanguard’s retirement funds have a $1,000 investment minimum.

Note: Some of these promotions won’t apply for first-time depositors, due to IRA contribution limits of $5,500 per year. We’ve tried to include promotions with low deposit requirements where available. 


Summary: Best IRA account providers

Broker
Best
for
Highlights
Commiss-
ions
Promotion
Account minimum
Start investing

TD Ameritrade

Overall
Commission-free:
100 ETFs, nearly 4,000 funds
$6.95
per trade
$100 bonus ($25,000+ deposit)
up to $600 ($250,000+ deposit)
$0

Charles Schwab

Charles Schwab
Overall and active trading
Commission-free:
200 ETFs, 3,000 funds
$4.95
per trade
$100 referral award for first-time clients
$1,000

E*Trade

E*Trade
No account minimum
Waives $500 account minimum for IRAs
$6.95
per trade; volume discounts
60 days of commission-free trades ($10,000+ deposit)
$0 for IRAs

Merrill Edge

Merrill Edge
No account minimum
First-rate customer service
$6.95
per trade
$100 to $600 bonus (based on account size)
$0

Betterment

Betterment
Hands-off investors
Offers access to human advisors for a higher fee.
0.25%-0.40% of account balance
per year
Up to one year of free management with qualifying deposit
$0

Wealthfront

Wealthfront
Hands-off investors
Manages first $10,000 for free
0.25% of account balance
per year
$15,000 managed free (for NerdWallet readers)
$500

Ally

Ally
Active traders
Competitive commissions, no account minimum
$4.95
per trade
None
$0

Fidelity

Fidelity Investments IRA

5.0 stars
Low cost
Commission-free:
3,600 funds, 91 ETFs
$4.95
per trade
Up to 500 free trades with a qualifying deposit
$0 for IRAs

Vanguard

Vanguard
Low cost
Known for low-cost index funds
$2 to $20 per trade depending on account balance
None
$0

Learn more about IRAs

What is an IRA and why would you want one?

An IRA is an investment account earmarked for retirement. IRA accounts, meant encourage saving for retirement, have significant tax benefits:

  • A traditional IRA earns you a tax deduction on contributions for the year they are made. You’ll then pay income taxes on the distributions you take in retirement. Because you’re delaying taxes until retirement, the investment growth in a traditional IRA is tax-deferred.
  • A Roth IRA offers no tax deduction when you make contributions, but qualified distributions in retirement are not taxed. That makes the investment income in a Roth IRA tax-free — you won’t pay taxes on it at all, so long as you wait until retirement to access it.

Generally, a traditional IRA is best if you expect your tax rate to be lower in retirement than it is now — by putting off taxes until retirement, you’ll pay that lower rate. If you expect the opposite to be true — your taxes are lower now and will be higher in retirement — you may want to choose a Roth IRA.

For more on this decision, dig into our comprehensive comparison of Roth and traditional IRAs.

What is the IRA contribution limit?

You can contribute up to $5,500 to an IRA each year, or $6,500 if you’re 50 or older. That’s a combined limit shared by the two types of IRA — you can have both a Roth and a traditional IRA, but you can’t contribute more than the maximum between the two. The limit doesn’t include amounts rolled over, such as from a 401(k).

How easily can I access that money?

This is a retirement account, so the money is intended to stay put until age 59 ½ or later.

That said, traditional IRA withdrawal rules are stricter than Roth IRA withdrawal rules: With a traditional IRA, you may be taxed and hit with a 10% early withdrawal penalty if you pull money out before that age 59 ½ finish line. There are a few exceptions.

With a Roth IRA, you can pull your contributions out at any time — remember, you’ve already paid taxes on them. You may be taxed or penalized on early distributions of investment earnings, however.

Can anyone contribute to an IRA?

Yes and no. Roth IRAs have income limits for eligibility; if you earn too much, your contribution limit is phased down or eliminated completely. (To figure out whether your contribution limit is reduced, use our Roth IRA calculator.)

Traditional IRAs don’t have income limits, but if you’re also covered by a workplace retirement plan like a 401(k), the amount of your contribution that you can deduct may be phased down or eliminated.

That means you can still make the maximum annual contribution, but a portion or all of it will be considered a nondeductible contribution. There’s no immediate tax benefit on nondeductible contributions, but you are still able to defer taxes on investment income until retirement. Read more about the traditional IRA deduction limits.

How do you open an IRA?

It’s a simple process: You can open an IRA online, at any broker or robo-advisor (though we’re partial to the ones above, for the reasons we outlined). It takes about 15 minutes and you’ll need to provide some personal information, including your name, birthday, mailing address and Social Security number. Here’s our guide to opening an IRA, which also includes information about how to fund and invest the account.

What do you mean by invest the account?

Unlike savings accounts, IRAs don’t pay a set interest rate or return. Once you’ve put money into the account, you need to select investments; otherwise, your money will sit in cash, which isn’t ideal for a long-term goal like retirement. Most IRA providers offer a wide range of investment options, including individual stocks, bonds and mutual funds.

If that sounds out of your league, you can open your IRA at a robo-advisor — like the two mentioned above — which will manage your investments for you for a small fee.

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

Updated Sept. 21, 2017.