Thomas Brock, CFA, CPA, expert contributor to Annuity.org
  • Written By
    Thomas J. Brock, CFA®, CPA

    Thomas J. Brock, CFA®, CPA

    Investment Management and Finance Professional

    Thomas Brock, CFA®, CPA, is a financial professional with over 20 years of experience in investments, corporate finance and accounting. He currently oversees the investment operation for a $4 billion super-regional insurance carrier.

    Read More
  • Financially Reviewed By
    Rubina K. Hossain, CFP®
    Rubina K. Hossain

    Rubina K. Hossain, CFP®

    Certified Financial Planner™ Professional

    Certified Financial Planner Rubina K. Hossain is chair of the CFP Board's Council of Examinations and past president of the Financial Planning Association. She specializes in preparing and presenting sound holistic financial plans to ensure her clients achieve their goals.

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  • Updated: July 24, 2022
  • This page features 5 Cited Research Articles
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How to Cite Annuity.org's Article

APA Brock, T. J. (2022, July 24). Best IRA Providers. Annuity.org. Retrieved September 26, 2022, from https://www.annuity.org/retirement/ira/best-ira-providers/

MLA Brock, Thomas J. "Best IRA Providers." Annuity.org, 24 Jul 2022, https://www.annuity.org/retirement/ira/best-ira-providers/.

Chicago Brock, Thomas J. "Best IRA Providers." Annuity.org. Last modified July 24, 2022. https://www.annuity.org/retirement/ira/best-ira-providers/.

What Is an IRA?

An individual retirement account (IRA) is an investment vehicle that helps you save for retirement in a tax-advantaged manner. Depending on the type of IRA you open, this could mean either tax-exempt growth on your contributions or up-front tax deductions on your contributions along with tax-deferred growth.

The tax breaks associated with IRAs can be incredibly valuable because they help your savings grow faster. You can reap the benefits of an IRA at any age, but the earlier you open an IRA, the better. The more time you have to capitalize on the powerful effect of compound interest, the larger your retirement nest egg will grow.

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What Are the Best IRA Companies?

The list is comprised of discount brokers, which are known for having low fees and a high degree of accessibility. Banks don’t make the cut, given their limited investment options (CDs and other savings accounts). High-end brokerage firms are also excluded, because the hands-on attention and advice they offer often fails to justify the cost.

Best IRA Companies

Provider Description Fees Minimum Best For
Charles Schwab

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Charles Schwab is the leader of the discount brokerage market, offering low-cost options for investors, coupled with robust mobile technology and an array of supplemental offerings
  • No setup fees and no commissions for online trades of stocks and ETFs (charges apply for other assets and broker/phone initiated trades)
  • $300 setup fee and $30 monthly fee for premium robo-advisor
  • $0 for self-directed account
  • $5k for robo-advisor
  • Investors focused on minimizing costs, while having access to analytics resources and the flexibility to move between self-directed and managed accounts
Investors focused on minimizing costs, while having access to analytics resources and the flexibility to move between self-directed and managed accounts
E-Trade

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E-Trade is a preferred option for active investors, as the firm offers cutting-edge trading platforms, including robust mobile techbology No setup fees and no commissions for online trades of stocks and ETFs (charges apply for other assets and broker/phone initiated trades) $0 Active traders who need dynamic tools and efficient access to all markets
Fidelity

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Fidelity is an industry leader, providing access to all publicly traded assets with a reputation for being the lowest-cost broker in the market
  • No setup fees and no commissions for online trades of stocks and ETFs (charges apply for other assets and broker/phone initiated trades)
  • 0.35% annual fee for robo-advisor
$0 Investors who want economical access to all markets
Registered Financial Consultant

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Merill Edge offers a spectrum of services, from self-directed accounts with minimal fees to research-based accounts with added services
  • No setup fees and no commissions for online trades of stocks and ETFs (charges apply for other assets and broker/phone initiated trades)
  • 0.45% annual fee for robo-advisor; 0.85% for human
  • $0 for self-directed account
  • $1k for robo-advisor
  • $20k for human advisor
Investors focused on minimizing costs, while having access to analytics resources and the flexibility to move between self-directed and managed accounts
Registered Financial Consultant

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As a subsidiary of Charles Schwab, TD Ameritrade offers low-cost options for investors, coupled with robust mobile technology and an array of supplemental offerings No setup fees and no commissions for online trades of stocks and ETFs (charges apply for other assets and broker/phone initiated trades) $0 Investors focused on minimizing costs, while having access to analytics resources
Registered Financial Consultant

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Vanguard is the original proponent of low-cost, index-style investng, and it now boasts a competitive IRA offering.
  • $20 setup fee (can be avoided by enrolling online)
  • No commissions for trades of Vanguard ETFs
  • 0.20% annual fee for robo-advisor
  • $0 for self-directed account
  • $3k for robo-advisor
Investors who favor passive investment strategies

What Are the Different Types of IRAs I Can Purchase?

There are two primary types of IRAs, the traditional IRA and the Roth IRA. With a traditional IRA, contributions are generally tax-deductible in the year they are made. The contributions are invested and grow during your working years. Then, in retirement, all withdrawals you make are taxed at your current income tax rate.

In contrast, with a Roth IRA, there is no upfront tax deduction on your contributions. The contributions are invested and grow during your working years. Then, in retirement, all withdrawals are free from taxation.

Which Is Better?

When deciding whether it makes more sense to open a traditional IRA or a Roth IRA, the most important factor to consider is whether you expect to be in a higher tax bracket during your working years or during your retirement years.

  • A traditional IRA is better if you expect to be in a higher tax bracket during your working years.
  • A Roth IRA is better if you expect to be in a higher tax bracket in retirement.

Unfortunately, given the unpredictable nature of economic cycles, geopolitical events and tax legislation, making an accurate prediction of your future tax rates is nearly impossible. Therefore, assuming you do not have other retirement accounts, it’s smart to put a portion of your retirement savings into a traditional IRA and a portion into a Roth IRA.

Maintaining two IRAs is fairly easy. More importantly, it will give you flexibility when it comes time to make income distributions in retirement. During years when you don’t have much (or any) income, it’s wise to make withdrawals from your traditional account because this money has never been taxed. During years when your income is higher (and your tax bracket is higher), it’s better to make withdrawals from your Roth account because the money will be tax-exempt.

Where Can I Open an IRA?

You can open an IRA through a diversified investment company, a dedicated brokerage firm or a banking institution. Generally, you will have the most investment options if you choose an investment company or a brokerage firm. Offerings from banks are often limited to certificates of deposit (CDs) and other savings accounts.

If you work with a financial advisor, they can guide you through the process of opening an IRA. If you don’t have a financial advisor, you can work directly with the IRA provider. The process of setting up an IRA is generally very simple and can usually be completed in less than 15 minutes. You’ll just need to provide some key identifying information about yourself.

What to Look for When Selecting an IRA Company

Now that you know how easy it is to open an IRA, let’s focus on what to look for in a provider. The list below outlines some of the most important things you should consider when evaluating IRA companies.

First, consider your investment experience and how much investment management assistance you’ll need. Are you self-sufficient or will you need guidance and ongoing support?

Self-directed IRAs are ideal for do-it-yourself investors who have clear investment goals and a good understanding of their tolerance for risk. For those who want help creating and maintaining their portfolio, automated robo-advisors can be a cost-effective solution. And for those who need hands-on human interaction and highly customized offerings, full-service brokerage firms are the best option.

Next, review the breadth of investment options offered by an IRA provider. IRAs can hold a variety of assets, including stocks, bonds, alternative investments, cash and fund-style vehicles that contain various combinations of assets.

Even though IRAs can hold a variety of assets, not all IRA providers will provide the same options. The best IRA companies offer all potential assets, but less competitive providers will have more limited offerings. Be sure to choose a company that will not hold you back from certain investment opportunities.

Note
The IRS specifically prohibits IRAs from holding life insurance contracts, collectibles and certain types of derivative instruments. If you want to hold gold or cryptocurrency in an IRA, you will have to open an IRA specifically designed to house those assets.

Evaluate the account fee structure. Depending on the level of service you’ll need, some fees are unavoidable. Nevertheless, you should try to avoid unnecessary and excessive fees, as they can have a serious drag on your investment performance and eat away at your savings. Keep the following ideas in mind as you assess IRA companies.

  • Account setup fees are rare and could point to a potentially unscrupulous provider.
  • Maintenance fees are also fairly unusual.
  • Commissions on investment trades are common and can range from a few dollars per trade to $100 or more per trade, depending on the type of asset being bought or sold. Fortunately, the best discount brokers have completely eliminated this expense for online trades of stocks and exchange-traded funds (ETFs).
  • Investment management fees are another common charge. You can easily avoid this expense if you’re a self-directed investor, but if you want advisory service, you’ll need to pay for it. Fortunately, technology-related advancements in data analysis and artificial intelligence are driving down the cost of automated investment advice, but high-touch, human-to-human service will always be more expensive.

Check for an account minimum requirement. Some providers require a minimum initial contribution to open an IRA. The minimum is most often imposed on accounts serviced by robo-advisors or full-service brokers. Self-directed IRAs usually don’t have account minimum requirements.

Finally, consider the availability of supplemental services. Many IRA providers offer a variety of educational resources, reports and analysis tools to help support your investment endeavors. Some of these offerings are free; others will require a premium subscription.

Closing Thoughts

As you consider your IRA options, remember that any money you put into these accounts is portable. If you open an IRA and lose confidence in the provider, you can move your money to a new IRA with another provider. That said, you’ll need to be mindful of potential tax liabilities that may be triggered when you move money around.

To avoid unnecessary taxes, be sure to only execute what’s known as like-kind transfers (traditional to traditional, or Roth to Roth). Additionally, take care to ensure the transfer is conducted in a way that aligns with IRS guidelines. Your financial advisor or IRA provider can assist with transfers and IRA rollovers.

As a reminder, you must have earned income to contribute to any kind of IRA. 

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: July 24, 2022

5 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Corporate Finance Institute. (n.d.). Robo-Advisors. Retrieved from https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/robo-advisors/
  2. E-Trade Securities LLC. (n.d.). Our Accounts: Retirement. Retrieved from https://us.etrade.com/what-we-offer/our-accounts#tab_2
  3. Fidelity Brokerage Services LLC. (n.d.). Retirement and IRAs. Retrieved from https://www.fidelity.com/retirement-ira/overview
  4. Internal Revenue Service. (2021, November 5). Traditional and Roth IRAs. Retrieved from https://www.irs.gov/retirement-plans/traditional-and-roth-iras
  5. Investor.gov. (n.d.). Exchange-Traded Fund (ETF). Retrieved from https://www.investor.gov/introduction-investing/investing-basics/glossary/exchange-traded-fund-etf