Best IRA Accounts of May 2024

Note: Some of the IRA promotions above won’t apply for first-time depositors, due to IRA contribution limits of $7,000 in 2024 ($8,000 if 50 or older). We’ve included promotions with low deposit requirements where available. You may be eligible for the IRA promotion if you're rolling over your existing IRA balance from another provider or account.

What are the benefits of an IRA?

IRA accounts offer significant tax benefits over traditional savings and brokerage accounts. As long as your money stays in an IRA, you’ll owe no tax on your investment earnings each year — that means you have a bigger nest egg to compound and grow over time. In contrast, with a traditional brokerage account, capital gains taxes may eat into your savings every year, depending on how you invest.

And if you qualify for a deductible IRA, the benefits are even greater, because you’ll reduce your taxable income for the year you contribute. See if you’re eligible for a deductible IRA here.

Am I eligible for a traditional IRA?

Anyone can open a traditional IRA — there are no 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 on your tax return may be phased down or eliminated based on your income.

If you exceed the income limits, 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’re still able to defer taxes on investment income until retirement. Read more about the traditional IRA deduction limits.

Roth IRAs have income limits for eligibility; if you earn too much, your contribution limit is phased down or eliminated completely. To see if you’re affected, use our Roth IRA calculator.

How do I choose an IRA account?

Picking the best IRA account will depend a bit on what matters most to you. Below we detail some criteria to keep in mind, but don’t forget that the most important thing is to get started saving for retirement. The sooner you get started, the better off you’ll be. Before decision paralysis slows you down, consider simply opening an account at one of our top picks — we’ve done hours of research already.

Here are some important criteria to keep in mind as you pick the best IRA account:

Low-cost investments: For long-term retirement savings success, make sure high fees don’t eat into your investment returns. Open your IRA at a broker or robo-advisor that offers low-cost investments. For many retirement investors, a smart investment is a low-cost mutual fund. Investing in a handful of mutual funds is an easy way to own a diversified portfolio, because each mutual fund invests in dozens, hundreds or even thousands of companies. With mutual funds, one of the main fees to focus on is the expense ratio. Ideally, you’re investing in mutual funds with an expense ratio of less than about 0.5%.

Low fees: While you’re keeping an eye on expense ratios, also keep other fees in mind. If you’re a do-it-yourself investor who plans to open an IRA at a broker, make sure you pick a broker with no trading commissions (or a high number of commission-free ETFs and no-transaction-fee mutual funds) and low transfer and other fees.

Investment help: If you want guidance picking investments, a robo-advisor likely is a better choice for you than a broker. All robo-advisors offer either ready-to-go investment portfolios or provide some help picking investments.

Customer support: Make sure the broker or robo-advisor offers customer support that meets your needs, whether that’s live chat, telephone support or access to human financial planners.

What is the difference between a traditional IRA and a Roth IRA?

There are a few differences between these accounts, but the main way they differ has to do with taxes:

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.

How do I 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, birthdate, 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 is the IRA contribution limit?

In 2024, the IRA contribution limit is $7,000 ($8,000 for those 50 and up). That’s a combined limit shared by the two types of IRA — you can have both a Roth and a traditional IRA, but that maximum limit applies to all of your IRA contributions combined. But the contribution limit doesn’t include amounts rolled over, such as from a 401(k).

Which bank has the best IRA?

You might have noticed we don’t include any bank IRA accounts in our roundup of the best IRAs. Generally, an investment broker or robo-advisor is a better option than a bank for an IRA account, because for a long-term goal like retirement you want to tap into the power of the stock market to grow your money.

Bank IRAs generally offer access to savings products such as certificates of deposit. CDs are savings products that guarantee a rate of return as long as you leave your money in for a specific period of time. Historically, stock market returns average about 10% a year. CD rates are typically much lower. Yes, the stock market comes with the risk that, in any given year, your account may lose value — but investors who leave their money in the market, even through those down days, generally enjoy hefty gains over time.

If, despite that, you decide to go with a bank CD, be sure to pick among the IRA accounts with the best IRA CD rates so you know you’re getting the best possible rate of return for that type of account.

Can I lose money in an IRA?

It is possible for an IRA account to lose value and even drop to zero (though that's unlikely). The key to sidestepping this risk is to make sure your investments are diversified. That means investing in a variety of companies — of different sizes and in different industries and locations — and in both stocks and bonds. That way, when any one slice of your investments faces trouble, the others are there to keep your overall portfolio on a steady course.

The easiest path to a diversified portfolio is with mutual funds and exchange-traded funds. One single fund can invest in thousands of companies, making it a simple one-stop shop for investment diversification.

How easily can I access my money?

This is a retirement account, so the money is intended to stay put until retirement.

With a traditional IRA, you may be taxed and hit with a 10% early withdrawal penalty if you pull money out before age 59½. 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.

How do I invest my IRA?