Best IRA Accounts of May 2024
In our analysis, the best IRA accounts offer a large selection of low-cost mutual funds and ETFs, helpful retirement planning tools, educational guidance and strong customer support.
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An individual retirement account (IRA) is a tax-advantaged investment account that can help you save and invest for retirement. If you're opening an IRA account for the first time, the process typically takes just 15 minutes and requires basic information, such as your name and bank account number.
If you already have an IRA but you're searching for better options, switching IRAs is relatively easy: You can transfer your funds to a new provider, often without selling your investments.
When choosing an IRA, you want to consider factors like investment selection, retirement planning tools, customer service and educational resources. You may also want to capitalize on any sign-up promotions currently available. If you have a workplace retirement account like a 401(k), it can be convenient to open your IRA at the same firm — Fidelity, Vanguard and Charles Schwab are common 401(k) account administrators. This allows you to monitor your retirement savings across accounts in one place.
Our list of the best IRAs divides IRA accounts into two categories:
Best IRA accounts for hands-on investors who want to pick and choose their investments. For this group, online brokers are often the right choice.
Best IRA accounts for hands-off investors who want help building and managing their IRA investments. For this group, robo-advisors are generally a great fit.
No matter what you're looking for, you'll find the best IRA account for you on our list below.
Best IRA accounts right now
Fidelity and Fidelity Go
It's no surprise Fidelity tops this list — the brokers' name is nearly synonymous with retirement investing and IRAs, and the company services many workplace retirement plans. In fact, that's an advantage that isn't factored into our analysis, but it may be factored into your decision about which IRA account to choose: If you have a 401(k) or other plan at work that's administered by Fidelity, opening an IRA under the same roof may be an easy decision. But Fidelity also stands out for other reasons — the company's website offers innovative tools and expertise to help you in your retirement planning, and it has a wide mutual fund selection, including several of its own index funds that charge no fees. Fidelity Go, Fidelity's robo-advisor, also appears on our list and is a good fit for Fidelity customers who want a robo-advisor to manage their IRA portfolio.
Like Fidelity, Charles Schwab is one of the leading providers of retirement accounts, including workplace plans like 401(k)s, so it's no surprise that they stand out for IRAs. The company offers a variety of different types of IRA accounts, including self-employed plans. Schwab stands out for having helpful retirement planning tools — including educational content and calculators — and a large selection of mutual funds. It earns five stars in our analysis across three categories that we heavily consider in our methodology: number of no-transaction-fee mutual funds, number of low-expense-ratio funds and number of low-minimum funds. That makes it easy and inexpensive for retirement investors to start an IRA. The company also offers a service that manages your portfolio for you — Charles Schwab Intelligent Portfolios.
We'll be honest and say our testers were surprised by how well Interactive Brokers scored when it comes to their IRA accounts — the broker is known for catering to active traders. But there are plenty of investors who want to trade in their IRA accounts — and there can be tax benefits for doing so — and Interactive Brokers deserves a spot on this list for its mutual fund offering alone. The broker has one of the largest mutual fund selections available, and our testers found the user experience of opening an account surprisingly smooth, even for novice investors.
J.P. Morgan makes this list because it's a well-rounded broker that's ideal for both beginner retirement investors and current Chase customers. The company offers a respectable selection of mutual funds alongside a portfolio builder tool ($2,500 minimum required) that's exactly what the name implies — it helps guide you through the process of building a portfolio.
IRA accounts are where Vanguard shines — the company is known for its low-cost index funds, which form the basis of many retirement accounts. The broker is especially appealing to investors who want direct access to Vanguard funds — while the overall fund selection here is on the smaller side, the quality of the funds and associated costs stand out from many other brokers. One hitch: Many Vanguard funds do have investment minimums of $1,000 or more. Vanguard's robo-advisor service, Vanguard Digital, also makes this list for those who want help assembling Vanguard funds into a diversified IRA account. It offers many of the IRA account benefits of Vanguard alongside portfolio management.
Similar to J.P. Morgan, Merrill Edge benefits from seamless integration with a large bank — in this case, Bank of America. If you're an existing Bank of America customer, you'll find opening an IRA at Merrill Edge to be extremely convenient. But that's not the only reason why Merrill ends up here — the brokerage also stands out for its high-quality educational content, which will be appreciated by retirement investors, especially those new to IRA accounts.
Unlike some of the other IRA account providers on this list, Firstrade isn't one of the brokerage firms you think of when it comes to retirement investing. But they stood out in our analysis because of one relatively rare feature — all of the mutual funds they offer are available with absolutely no transaction fee. That, combined with the fact that they're a strong broker overall, puts them on our list.
E*TRADE is another well-rounded broker that appeals to stock traders and long-term investors alike, which makes the firm a good fit for many. Like Firstrade, E*TRADE charges no transaction fees for mutual fund purchases, and the company has a large selection of fund options. E*TRADE also stood out to our reviewers for its high-quality retirement planning tools.
Betterment has for years ranked highly in our analysis of robo-advisors, and it's no surprise they show up here — for users who want low-fee management of their IRA accounts with the option to purchase a la cart help from financial advisors, there's almost no match. Betterment will manage your IRA portfolio for you so you can be completely hands-off, which many long-term investors prefer. The service costs just .25% of your account balance each year.
SoFi stands out for one big reason: No management fees. The company will build and manage your IRA account completely for free. The investments used still carry management fees, but those are also among the lowest we've seen — they average just 0.03%. SoFi also offers unlimited access to certified financial planners, so there's a lifeline if you have a financial question.
Wealthfront often tops our list of the best robo-advisors, and it's no different when it comes to IRAs. The company offers an impressive number of portfolio options, including the ability to purchase individual stocks and an automated bond portfolio that will appeal to IRA investors who are getting closer to (or who are in) retirement. Wealthfront's online tools, including its retirement planning and goal tools, really impressed our testers.
Ellevest has built its business around serving female investors, a group that is often underserved in the investment industry. As such, many of the company's planning tools keep women's specific needs in mind, factoring in different lifetime earnings curves and longer lifespans. Ellevest provides a number of innovative planning tools to help IRA investors juggle multiple goals, but the company charges $12 per month, which can be on the high side depending on your IRA balance.
Ally Invest Robo Portfolios stands out among other robo-advisors as a strong choice for IRA accounts for one specific group — those in or near retirement who are comfortable having a high percentage of their portfolio in cash. That's because Ally charges no management fee for its Cash-Enhanced Managed Portfolio, which has a 30% cash requirement. The rest of the portfolio will be automatically managed by Ally using a diversified mix of ETFs. The cash allocation does pay a competitive interest rate, but again, it is most appropriate for IRA investors who are conservative or nearing or in retirement. Investors who don't fall into that profile pay a .30% management fee, which is still competitive among robo-advisors.
Note: The star ratings on this page are for the provider overall. Some companies with a lower overall rating are still included here because IRAs are where they excel.
An individual retirement account (IRA) is a tax-advantaged investment account that can help you save and invest for retirement. If you're opening an IRA account for the first time, the process typically takes just 15 minutes and requires basic information, such as your name and bank account number.
If you already have an IRA but you're searching for better options, switching IRAs is relatively easy: You can transfer your funds to a new provider, often without selling your investments.
When choosing an IRA, you want to consider factors like investment selection, retirement planning tools, customer service and educational resources. You may also want to capitalize on any sign-up promotions currently available. If you have a workplace retirement account like a 401(k), it can be convenient to open your IRA at the same firm — Fidelity, Vanguard and Charles Schwab are common 401(k) account administrators. This allows you to monitor your retirement savings across accounts in one place.
Our list of the best IRAs divides IRA accounts into two categories:
Best IRA accounts for hands-on investors who want to pick and choose their investments. For this group, online brokers are often the right choice.
Best IRA accounts for hands-off investors who want help building and managing their IRA investments. For this group, robo-advisors are generally a great fit.
No matter what you're looking for, you'll find the best IRA account for you on our list below.
Best IRA accounts right now
Fidelity and Fidelity Go
It's no surprise Fidelity tops this list — the brokers' name is nearly synonymous with retirement investing and IRAs, and the company services many workplace retirement plans. In fact, that's an advantage that isn't factored into our analysis, but it may be factored into your decision about which IRA account to choose: If you have a 401(k) or other plan at work that's administered by Fidelity, opening an IRA under the same roof may be an easy decision. But Fidelity also stands out for other reasons — the company's website offers innovative tools and expertise to help you in your retirement planning, and it has a wide mutual fund selection, including several of its own index funds that charge no fees. Fidelity Go, Fidelity's robo-advisor, also appears on our list and is a good fit for Fidelity customers who want a robo-advisor to manage their IRA portfolio.
Like Fidelity, Charles Schwab is one of the leading providers of retirement accounts, including workplace plans like 401(k)s, so it's no surprise that they stand out for IRAs. The company offers a variety of different types of IRA accounts, including self-employed plans. Schwab stands out for having helpful retirement planning tools — including educational content and calculators — and a large selection of mutual funds. It earns five stars in our analysis across three categories that we heavily consider in our methodology: number of no-transaction-fee mutual funds, number of low-expense-ratio funds and number of low-minimum funds. That makes it easy and inexpensive for retirement investors to start an IRA. The company also offers a service that manages your portfolio for you — Charles Schwab Intelligent Portfolios.
We'll be honest and say our testers were surprised by how well Interactive Brokers scored when it comes to their IRA accounts — the broker is known for catering to active traders. But there are plenty of investors who want to trade in their IRA accounts — and there can be tax benefits for doing so — and Interactive Brokers deserves a spot on this list for its mutual fund offering alone. The broker has one of the largest mutual fund selections available, and our testers found the user experience of opening an account surprisingly smooth, even for novice investors.
J.P. Morgan makes this list because it's a well-rounded broker that's ideal for both beginner retirement investors and current Chase customers. The company offers a respectable selection of mutual funds alongside a portfolio builder tool ($2,500 minimum required) that's exactly what the name implies — it helps guide you through the process of building a portfolio.
IRA accounts are where Vanguard shines — the company is known for its low-cost index funds, which form the basis of many retirement accounts. The broker is especially appealing to investors who want direct access to Vanguard funds — while the overall fund selection here is on the smaller side, the quality of the funds and associated costs stand out from many other brokers. One hitch: Many Vanguard funds do have investment minimums of $1,000 or more. Vanguard's robo-advisor service, Vanguard Digital, also makes this list for those who want help assembling Vanguard funds into a diversified IRA account. It offers many of the IRA account benefits of Vanguard alongside portfolio management.
Similar to J.P. Morgan, Merrill Edge benefits from seamless integration with a large bank — in this case, Bank of America. If you're an existing Bank of America customer, you'll find opening an IRA at Merrill Edge to be extremely convenient. But that's not the only reason why Merrill ends up here — the brokerage also stands out for its high-quality educational content, which will be appreciated by retirement investors, especially those new to IRA accounts.
Unlike some of the other IRA account providers on this list, Firstrade isn't one of the brokerage firms you think of when it comes to retirement investing. But they stood out in our analysis because of one relatively rare feature — all of the mutual funds they offer are available with absolutely no transaction fee. That, combined with the fact that they're a strong broker overall, puts them on our list.
E*TRADE is another well-rounded broker that appeals to stock traders and long-term investors alike, which makes the firm a good fit for many. Like Firstrade, E*TRADE charges no transaction fees for mutual fund purchases, and the company has a large selection of fund options. E*TRADE also stood out to our reviewers for its high-quality retirement planning tools.
Betterment has for years ranked highly in our analysis of robo-advisors, and it's no surprise they show up here — for users who want low-fee management of their IRA accounts with the option to purchase a la cart help from financial advisors, there's almost no match. Betterment will manage your IRA portfolio for you so you can be completely hands-off, which many long-term investors prefer. The service costs just .25% of your account balance each year.
SoFi stands out for one big reason: No management fees. The company will build and manage your IRA account completely for free. The investments used still carry management fees, but those are also among the lowest we've seen — they average just 0.03%. SoFi also offers unlimited access to certified financial planners, so there's a lifeline if you have a financial question.
Wealthfront often tops our list of the best robo-advisors, and it's no different when it comes to IRAs. The company offers an impressive number of portfolio options, including the ability to purchase individual stocks and an automated bond portfolio that will appeal to IRA investors who are getting closer to (or who are in) retirement. Wealthfront's online tools, including its retirement planning and goal tools, really impressed our testers.
Ellevest has built its business around serving female investors, a group that is often underserved in the investment industry. As such, many of the company's planning tools keep women's specific needs in mind, factoring in different lifetime earnings curves and longer lifespans. Ellevest provides a number of innovative planning tools to help IRA investors juggle multiple goals, but the company charges $12 per month, which can be on the high side depending on your IRA balance.
Ally Invest Robo Portfolios stands out among other robo-advisors as a strong choice for IRA accounts for one specific group — those in or near retirement who are comfortable having a high percentage of their portfolio in cash. That's because Ally charges no management fee for its Cash-Enhanced Managed Portfolio, which has a 30% cash requirement. The rest of the portfolio will be automatically managed by Ally using a diversified mix of ETFs. The cash allocation does pay a competitive interest rate, but again, it is most appropriate for IRA investors who are conservative or nearing or in retirement. Investors who don't fall into that profile pay a .30% management fee, which is still competitive among robo-advisors.
Note: The star ratings on this page are for the provider overall. Some companies with a lower overall rating are still included here because IRAs are where they excel.
One factor that doesn't vary between IRA providers is the contribution limit, which is set by the IRS. You can contribute up to $7,000 to an IRA in 2024, or $8,000 if you're age 50 or older.
Best IRA Accounts
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
 Charles Schwab Learn more on Charles Schwab's website | Best for Hands-On Investors | $0 per online equity trade | $0 | None no promotion available at this time | Learn more on Charles Schwab's website |
 Interactive Brokers IBKR Lite Learn more on Interactive Brokers' website | Best for Hands-On Investors | $0 per trade | $0 | None no promotion available at this time | Learn more on Interactive Brokers' website |
 Fidelity IRA Learn more on Fidelity's website | Best for Hands-On Investors | $0 no account fees to open a Fidelity retail IRA | $0 | None no promotion available at this time | Learn more on Fidelity's website |
 Vanguard Digital Advisor Learn more on Vanguard's website AD Paid non-client promotion | Reviewed in: Oct. 2023 Period considered: Aug. - Oct. 2023 | 0.15% per year
(approximately) | $3,000 | No advisory fees your first 90 days of Vanguard Digital Advisor investment management (Enrollment requires a Vanguard account with a minimum of $3,000) | Learn more on Vanguard's website AD Paid non-client promotion |
 J.P. Morgan Self-Directed Investing Learn more on J.P. Morgan's website | Best for Hands-On Investors | $0 per trade | $0 | Get up to $700 when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money. | Learn more on J.P. Morgan's website |
Our pick for
Hands-On Investors
For people who want to pick their own investments, opening an IRA at an online broker makes a lot of sense. At the best brokers, you’ll find a large list of low-cost investments to choose from, including index mutual funds and exchange-traded funds. Here are the best IRAs from our analysis.
$0
per online equity trade
$0
None
no promotion available at this time
Pros
No minimum investment.
No inactivity fees.
Above-average mobile app.
Large selection of no-transaction-fee mutual funds.
Commission-free stock, ETF and options trades.
Cons
Low interest rate on uninvested cash.
High fee for transaction-fee funds.
Why We Like It
Charles Schwab is one of the best overall IRA providers, with high-quality customer service, no account minimum and low fees. The company offers a large selection of no-transaction-fee funds and charges no commission for stock, options and ETF trades.
Best Online Broker for Advanced Traders 2024
$0
per trade
$0
None
no promotion available at this time
Pros
Large investment selection.
Strong research and tools.
Over 19,000 no-transaction-fee mutual funds.
High order execution quality.
Cons
High minimum to earn interest on uninvested cash.
Why We Like It
Interactive Brokers' IBKR Lite is a strong option for frequent traders: The broker offers international trade capabilities, no stock-trading commission and a quality trading platform.
Best Broker for IRA Investors 2024
$0
no account fees to open a Fidelity retail IRA
$0
None
no promotion available at this time
Pros
$0 trade commissions.
Low-cost index funds and mutual funds.
Retirement planning tools.
Strong customer support.
Free research and data.
Cons
Relatively high broker-assisted trade fee.
Why We Like It
Many investors are familiar with Fidelity as a provider of 401(k) plans — the broker is one of the biggest names in employee retirement accounts. It can be convenient to also have an IRA under the same roof, because you'll be able to seamlessly view all account balances in one place. But even for those who don't have a 401(k) with Fidelity, the company offers access to low-cost retirement investments and innovative tools to help you plan for retirement and check in on your progress.
$0
per trade
$0
Get up to $700
when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money.
Pros
Easy-to-use platform.
$0 commissions.
App connects all Chase accounts.
No account minimum.
Cons
Limited tools and research.
Portfolio Builder tool requires $2,500 balance.
Low interest rate on uninvested cash.
Why We Like It
J.P. Morgan Self-Directed Investing is a clear-cut investment platform that is great for beginners looking to learn how to buy and sell investments. More advanced investors, however, may find it lacking in terms of available assets, tools and research. INVESTMENT PRODUCTS: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
$0
per trade
$0
None
no promotion available at this time
Pros
Large mutual fund selection.
Commission-free stock, options and ETF trades.
Leader in low-cost funds.
High interest rate on uninvested cash.
High order execution quality.
Cons
Basic trading platform only.
Limited research and data.
Why We Like It
Vanguard is the king of low-cost investing, making it ideal for buy-and-hold and retirement investors. But active traders will find the broker falls short despite its $0 trade commission, due to the lack of a strong trading platform.
Our pick for
Hands-Off Investors
If you'd prefer to let someone — or something — else manage your investments, a robo-advisor may be a good fit for you. Robo-advisors will select investments for your IRA and then manage them over time. Here are the best IRAs offered by robo-advisors.
Best Robo-Advisor for Low-Cost Investing 2024
4.8
/5Reviewed in: Oct. 2023
Period considered: Aug. - Oct. 2023
on Vanguard's website
AD
Paid non-client promotion
0.15%
per year (approximately)
$3,000
No advisory fees
your first 90 days of Vanguard Digital Advisor investment management (Enrollment requires a Vanguard account with a minimum of $3,000)
Pros
Access to Vanguard’s investing expertise and ETFs.
Low management fee relative to competitors.
Low investment expense ratios and no additional account fees.
Cons
Limited portfolio options and customization.
Why We Like It
Vanguard Digital Advisor is an affordable robo-advisory service using several of Vanguard’s key ETFs to create a personalized retirement plan and portfolio for investors.
5.0
/5Reviewed in: Oct. 2023
Period considered: Aug. - Oct. 2023
on Betterment's website
AD
Paid non-client promotion
0.25%
with a balance over $20K or qualifying recurring deposit. Otherwise, $4/month.
$0
$10 to start
None
no promotion available at this time
Pros
Multiple investment options.
Robust goal-based tools.
Fractional shares mean all your cash is invested.
Low management fee.
Cons
Additional fee for access to financial advisors.
Why We Like It
With its low-cost ETFs, automatic rebalancing, extensive tax strategies and retirement advice, Betterment is a strong bet for retirement investors. Betterment’s planning tools include advice on “asset location” — which types of investments are best for different types of accounts — and investors can sync outside accounts, as well.
4.9
/5Reviewed in: Oct. 2023
Period considered: Aug. - Oct. 2023
on SoFi Invest's website
AD
Paid non-client promotion
0%
management fee
$0
None
no promotion available at this time
Pros
Broad range of low-cost investments.
Free management.
Automatic rebalancing.
Customer support.
Access to certified financial planners.
Cons
Limited account types.
No tax-loss harvesting.
Why We Like It
Free management and access to financial advisors and career counselors make SoFi Automated Investing a solid choice for beginning and younger investors.
5.0
/5Reviewed in: Oct. 2023
Period considered: Aug. - Oct. 2023
on Wealthfront's website
AD
Paid non-client promotion
0.25%
management fee
$500
Get a $50 customer bonus
when you fund your first taxable investment account
Pros
Get $50 customer bonus when you fund your first taxable investment account (NerdWallet promotion).
Automatic rebalancing.
Digital financial planning tools.
Low management fee.
Cons
No access to human advisors.
No fractional shares.
Why We Like It
Wealthfront takes the hassle out of IRA investing. The robo-advisor manages accounts by constructing portfolios out of low-cost ETFs, with a flat and low-cost fee structure that appeals to investors seeking a hands-off approach. What’s more, the company has built client trust by offering free management on the first $5,000 invested (for NerdWallet readers).
4.6
/5Reviewed in: Oct. 2023
Period considered: Aug. - Oct. 2023
on Fidelity's website
AD
Paid non-advisory client promotion
0% - 0.35%
management fee
$0
None
no promotion available at this time
Pros
Free management on balances under $25,000.
No investment-expense ratios.
Human portfolio oversight.
Integration with other Fidelity accounts.
Cons
No tax-optimization assistance.
Why We Like It
Fidelity's robo-advisor, Fidelity Go, frequently makes our list of the best robo-advisor for its low fees — including free management on balances below $25,000 — integration with other Fidelity accounts and its use of Fidelity Flex funds, which have no expense ratios.
4.7
/5Reviewed in: Oct. 2023
Period considered: Aug. - Oct. 2023
on Ellevest's website
AD
Paid non-client promotion
$12
per month
$0
2 months free
with promo code "nerdwallet"
Pros
No account minimum.
Goal-focused investing approach.
Portfolio mix that factors women’s needs.
A la carte sessions with coaches and CFPs.
Cons
No tax-loss harvesting.
Why We Like It
Ellevest offers a single flat-fee plan which costs $12 a month. Clients get discounted access to professional financial planning, free educational resources and the only investing platform that factors in women’s pay gaps, career breaks and longer lifespans. Ellevest also offers Private Wealth Management for investors with $1 million or more.
Want to compare more options? Here are our other top picks:
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% per 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 59 ½. 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?
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, which will manage your investments for you for a small fee. The robo-advisors on this page are listed under the heading for hands-off investors — investors who want a robo-advisor to invest the IRA account for them.
Last updated on May 10, 2024
Methodology
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers and robo-advisors. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating providers and our processes, read our full broker ratings methodology and our full robo-advisor ratings methodology.
Full list of IRA accounts considered for this list: Tradestation, Zacks Trade, Ally Invest, Charles Schwab, Interactive Brokers, Firstrade, Fidelity, Merrill Edge, Vanguard, Robinhood, SoFi Active Investing, JP Morgan Self-Directed Investing, Webull, Axos Self-Directed Trading, M1 Finance, Betterment, Wealthfront, Ally Invest Robo Portfolios, Axos Managed Portfolios, Schwab Intelligent Portfolios, E-Trade Core Portfolios, Fidelity Go, Acorns, Merrill Edge Guided Investing, Ellevest, SoFi Automated Investing, Stash, Vanguard Digital Advisor, Titan
To recap our selections...
NerdWallet's Best IRA Accounts of May 2024
- Charles Schwab: Best for Hands-On Investors
- Interactive Brokers IBKR Lite: Best for Hands-On Investors
- Fidelity IRA: Best for Hands-On Investors
- Vanguard Digital Advisor: Best for Hands-Off Investors
- J.P. Morgan Self-Directed Investing: Best for Hands-On Investors
- Betterment IRA: Best for Hands-Off Investors
- SoFi Automated Investing: Best for Hands-Off Investors
- Vanguard: Best for Hands-On Investors
- Wealthfront IRA: Best for Hands-Off Investors
- Fidelity Go®: Best for Hands-Off Investors
- Ellevest: Best for Hands-Off Investors
- Firstrade: Best for Hands-On Investors
- Ally Invest Robo Portfolios: Best for Hands-Off Investors
- Merrill Edge® Self-Directed: Best for Hands-On Investors
- E*TRADE IRA: Best for Hands-On Investors
- Schwab Intelligent Portfolios®: Best for Hands-Off Investors
