- Written By Thomas J. Brock, CFA®, CPA
Thomas J. Brock, CFA®, CPA
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
- Edited BySavannah Hanson
Senior Financial Editor
Savannah Hanson is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.Read More
- Financially Reviewed ByChip Stapleton
Chip Stapleton is a financial advisor who has spent the past several years of his career working primarily in financial planning and wealth management. He is a FINRA Series 7 and Series 66 license holder and CFA Level II candidate.Read More
- Updated: December 5, 2022
- 5 min read time
- This page features 10 Cited Research Articles
Are There Fees on an IRA?
Both types of individual retirement accounts (IRAs) — the traditional IRA and the Roth IRA — can be highly beneficial in helping you save for retirement in a tax-advantaged manner. By allowing you to amplify the effect of compound interest, an IRA can accelerate the growth of your retirement savings. However, opening and maintaining IRAs is not always free.
Let’s go over the common fee structures of IRAs and some of the providers with the lowest IRA fees.
Traditional IRA Fees and Roth IRA Fees
Let’s start with a breakdown of the fees you’re likely to encounter with both traditional IRAs and Roth IRAs. These fees are important to consider when you’re saving for retirement.
- Account setup fees are the first cost you could encounter. They are rare and can usually be avoided by funding your account with a specified amount of money. Ultimately, you should avoid IRA providers with mandatory account setup fees.
- Account maintenance fees (or custodial fees) are also fairly unusual and avoidable, depending on the size of your account. Nevertheless, some IRA providers charge a fee to administer your account. The most expensive providers charge over $50 per year.
- Transaction fees and commissions on investment trades are fairly common and can range from a few dollars 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. Self-directed investors can easily avoid this expense, but if you need any advisory services, you’ll have to pay for them If your investments are managed by human advisors, expect to pay fees of around 0.80% to 1.20%. Accounts managed by automated robo-advisors have lower fees, as they use artificial intelligence and data analysis technology instead of human-to-human service. Expect fees of around 0.20% to 0.45% with accounts managed by robo-advisors.
IRA Rollover Fees and Account Closing Fees
You should also consider the fees involved with closing your IRA or rolling it over to another provider. If you open an IRA and lose confidence in the provider, you can move your money to a new IRA from another provider. If this process is executed in a way that aligns with IRS guidelines, you won’t be charged taxes or penalties. However, it’s not uncommon for the original service provider to charge a termination fee of $25 to $100.
In addition to the fees above, management fees and sales charges relating to any fund-style investments held within them can impact your IRA. These fees are commonly associated with mutual funds and ETFs, with ETFs being a significantly cheaper option. Pay close attention to these fees when comparing your investment options.
How Do IRA Fees Impact My Retirement?
When IRA fees are excessive, they can have a serious drag on your retirement savings. It can also increase the chance that you’ll run out of money in retirement. To avoid this situation, it’s important to carefully review the fees involved with any account you’re considering investing in.
IRA Fees by Company
Now that we’ve reviewed common IRA fees, let’s look at the fee structures of several popular IRA providers, including Charles Schwab IRA fees and Vanguard Roth IRA fees.
The chart below provides a summary of the companies with the lowest fees in the more than $10 trillion IRA market.
Provider Description Fees Minimum Best For
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 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 is an industry leader, providing access to all publicly traded assets with a reputation for being the lowest-cost broker in the market
- 0.35% annual fee for robo-advisor
$0 Investors who want economical access to all markets
Merill Edge offers a spectrum of services, from self-directed accounts with minimal fees to research-based accounts with added services
- 0.45% annual fee for robo-advisor; 0.85% for human
- $0 for self-directed account
- $1k for robo-advisor
- $20k for human advisor
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 $0 Investors focused on minimizing costs, while having access to analytics resources
Vanguard is the original proponent of low-cost, index-style investing, 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 strategiesPlease seek the advice of a qualified professional before making financial decisions.Last Modified: December 5, 2022
10 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.
- Corporate Finance Institute. (2021, October 22). Robo-Advisors. Retrieved from https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/robo-advisors/
- E-Trade Securities LLC. (n.d.). Our Accounts: Retirement. Retrieved from https://us.etrade.com/what-we-offer/our-accounts#tab_2
- Fidelity Brokerage Services LLC. (n.d.). Retirement and IRAs. Retrieved from https://www.fidelity.com/retirement-ira/overview
- Internal Revenue Service. (2021, November 5). Traditional and Roth IRAs. Retrieved from https://www.irs.gov/retirement-plans/traditional-and-roth-iras
- Investor.gov. (n.d.). Exchange-Traded Fund. Retrieved from https://www.investor.gov/introduction-investing/investing-basics/glossary/exchange-traded-fund-etf
- Investor.gov. (n.d.). What Is Compound Interest? Retrieved from https://www.investor.gov/additional-resources/information/youth/teachers-classroom-resources/what-compound-interest
- Merrill Edge. (n.d.). Homepage. Retrieved from https://www.merrilledge.com/
- TD Ameritrade Inc. (n.d.). Retirement Account Types. Retrieved from https://www.tdameritrade.com/account-types/retirement.html
- The Charles Schwab Corporation. (n.d.). Retirement Accounts (IRAs). Retrieved from https://www.schwab.com/ira
- The Vanguard Group Inc. (n.d.). IRAs. Retrieved from https://investor.vanguard.com/accounts-plans/iras
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