Best Brokers for IRA Retirement Accounts in 2016

Where to open an IRA can be an intimidating question. Options range from online discount brokers to robo advisors to mutual fund companies. With all of these choices, it can be difficult to know which is best. Whether you are looking to open a traditional IRA, Roth IRA, rollover or even a SEP IRA, in this article we’ll cover the top IRA accounts based on how you want to invest.

Best Brokers for IRAs FB

The key to choosing where to house your retirement account is your investing style. If you want to invest in a single family of mutual funds, an account at the mutual fund company is sensible. If you want somebody else to handle your investments, including rebalancing, a robo advisor is an ideal choice. And if you want to trade stocks and ETFs, an online discount broker is the way to go.

I’ve personally used all of the above options, which are covered below. We’ll first look at the top choices for IRA accounts, and then cover a longer list of options in more detail.

The Best Options by Investing Style

Best IRA Account Brokers in 2016

  • Betterment: The best IRA option for first-time investors. Very easy to use and extremely low fees.
  • Vanguard: The lowest cost mutual funds in the industry.
  • Wealthfront: Sophisticated automated investment service. First $5,000 invested without any Wealthfront fees. Just 25 basis points plus ETF fees after that.
  • TradeKing: Best hybrid approach. You get access to TradeKing Advisors, an automated investment service, as well as its award winning low cost brokerage services.

Scottrade

Scottrade offers very low cost trades, excellent trading tools, and locations throughout the country where clients can talk to real people in person. Its physical locations was the primary reason I opened my SEP IRA at Scottrade back in 2010. Making trades is very easy an super fast. All of my trades were completed in seconds.

  • IRA’s available: Traditional / Roth / Rollover / SEP / SIMPLE
  • Fees associated with account: None (No opening, maintenance, custodial or closeout fees of any kind)
  • Account minimums: None (No initial minimums and/or account requirements)
  • Takeaway: Scottrade offers the best mix of low cost, excellent trading tools, and branch locations. For more information check out our Scottrade review or visit Scottrade to open an IRA.

Betterment

Betterment IRABetterment is the easiest way to get started with an IRA and an excellent choice for first-time investors. Simply select how much you want invested in stocks and bonds, and Betterment does the rest. It rebalances your investments and reinvests your dividends automatically.

  • IRA’s available: Traditional / Roth / Rollover / SEP
  • Fees associated with account: None (No opening, maintenance, custodial or closeout fees of any kind). Betterment does charge a fee based on account balance that ranges from 0.15% to 0.35%.
  • Account minimums: None (No initial minimums and/or account requirements)
  • Takeaway: Betterment is ideal for those who want low cost passively managed investments, but don’t want the hassle of picking mutual funds and rebalancing. For more information check out our Betterment review or visit Betterment.

Vanguard

Vanguard is the king among low cost index mutual funds. Because the firm is not seeking to make a profit, it passes the savings on to investors. I’ve had multiple accounts at Vanguard for years, including Individual Retirement Arrangements and other retirement accounts. In addition to mutual funds, Vanguard offers ETFs and brokerage services.

  • IRA’s available: Traditional / Roth / Rollover / SEP
  • Fees associated with account: None (No opening, maintenance, custodial or closeout fees of any kind)
  • Account minimums: $1,000
  • Takeaway: An excellent choice for those who want to invest in Vanguard funds and have a minimum of $1,000 to invest.

Wealthfront

Wealthfront is a sophisticated robo advisor that is very easy to use, low cost, and with excellent features. Much like Betterment, all you need do is select the allocation you want between stocks and bonds. From there, Wealthfront invests your IRA in several low cost well diversified ETFs. It rebalances your investments and reinvests your dividends automatically.

  • IRA’s available: Traditional / Roth / Rollover / SEP
  • Fees associated with account: None (No opening, maintenance, custodial or closeout fees of any kind). Wealthfront does charge a 0.25% fee based on account balance (first $5,000 is free).
  • Account minimums: $500
  • Takeaway: Wealthfront is ideal for those who want sophisticated asset allocation at a low cost and with minimal effort. For more information visit Wealthfront.

TradeKing

TradeKing is unique among IRA accounts. It offers both traditional online brokerage services with trades as low as $4.95. It also offers what it calls TradeKing Advisors, an automated investment service. It’s like getting Betterment and Scottrade in one.

  • IRA’s available: Traditional / Roth / Rollover / SEP / SIMPLE
  • Fees associated with account: None (No opening, maintenance, custodial or closeout fees of any kind). TradeKing Advisors, like all robo advisors, charges a small fee.
  • Account minimums: None for brokerage services. $500 for TradeKing Advisors.
  • Takeaway: TradeKing offers both brokerage and automated investment services. Ideal for those wanted a wide range of IRA account types and investment options. For more information check out our TradeKing review or visit TradeKing to open an IRA.

OptionsHouse

  • IRA’s available: Traditional / Roth / Rollover / SEP
  • Fees associated with account: None (No opening, maintenance, custodial or closeout fees of any kind)
  • Account minimums: $1,000 for a cash account and $2,000 for a margin account
  • IRA Bonus: Open an IRA and get 100 free trades and up to $125 in transfer fees.
  • Takeaway: OptionsHouse offers one of the lowest fee structures you’ll find anywhere (e.g., $4.95 flat fee to trade stocks) and is one of the few brokerages that allow you trade options in an IRA account. For more information check out our OptionsHouse review or visit OptionsHouse.

E*Trade

ETrade

  • IRA’s available: Traditional / Roth / Rollover / SEP / SIMPLE / IRA  for Minors /Beneficiary / Roth IRA CD / Traditional IRA CD
  • Fees associated with account: No annual fees
  • Account minimums: None
  • Takeaway: If you can avoid some of the fees with high balances, E*Trade is a full service brokerage option. For more information check out our E*Trade review or visit E*Trade.

OptionsXpress

OptionsXpress

  • IRA’s available: Traditional / Roth / Rollover / SEP / SIMPLE
  • Fees associated with account: No open, maintenance, or custodial fees, however there is a fee for closing out an IRA dependent on your account status
  • Account Minimums: None (No initial minimums and/or account requirements)
  • Takeway: Editor’s Choice–OptionsXpress is our top pick if you are looking to buy and sell options in your IRA. Its options tools, pricing, and education are first rate, in our opinion. For more information you can check out our OptionsXpress review or visit OptionsXpress.

TD Ameritrade

TD Ameritrade is a trusted brokerage house with excellent IRA options. Its research tools are unparalleled, and it even offers up to $600 when you rollover a 401k to an IRA. You can open an account online in just minutes.

  • IRA’s available – Traditional / Roth / Rollover / SEP
  • Fees associated with account – No set-up, maintenance or annual fees.
  • Account minimums – None (No initial minimums and/or account requirements)
  • Takeway: Well known for its trading tools and research, TD Ameritrade was ranked #1 for IRA accounts by Kiplinger. For more information check out our TD Ameritrade review or visit TD Ameritrade.

Final Thoughts

Best Brokers for IRAsWhen deciding which online discount broker is the best place to transfer an existing IRA, or start investing into a new one, there are a few important factors to consider. First you should make sure that the broker offers the specific type of IRA you are interested in. While most online discount brokers carry the same IRA accounts, there are a few unique options available.

The next and most important question you need to ask is “What are the fees associated with opening, maintaining and closing my IRA?” If you are paying a high premium, then the tax benefits may not be worth it in the long-run. Finally, when you factor in account minimums and customer service, you should find the online discount broker that’s right for you.

Published or Updated: May 23, 2016
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. For Canadian investors they can look at Questrade.

  2. Cynthia Bradley says:

    I just lost my job and I have to rollover my 401k to a IRA. I’m considering TradeKing but I would like some advice on what to do once I have rolled over my funds. I have only bought drips using the dollar cost average method of accumulating stocks. I just need to know once I rollover my funds can they sit there until I get educationed on making eft and/or stock trades.
    Cynthia

  3. will richards says:

    After years and years investing with fidelity, i am leaving because of rudness, hostility, reps who dont care, high fees, they cost me a lot of money, be careful dealin with the devil

  4. Kerry Pickett says:

    @ Cynthia, consider seeking out a financial planner, they will be able to guide you into what product suit your individual goals, but will only charge a fee for their knowledge. At least to get you started, this is pretty important stuff to go alone

  5. Ryan says:

    I use Scottrade for my Roth IRA, but they do not offer automatic reinvestment of dividends. Is there a company with similar fees to Scottrade that offers automatic dividend reinvestment?

    • Rob Berger says:

      Ryan, that’s a great question. There are several brokers on the list above that offer automatic dividend reinvestment: E*Trade and OptionsXpress. I have an account at OptionsXpress. All you need to do is an online chat with them and they can set you up with the DRIP. It took all of 60 seconds.

      Also, Betterment reinvests dividends automatically, but as you may know, it’s not a traditional broker.

  6. Neelu says:

    Hi,
    You can also use other traders like Interactive Brokers who charge very less trading costs and they also support DRIP. I have personally used TradeKing and Interactive Brokers which are both good.

  7. Charles says:

    I am trying to locate a broker that will allow me to write credit spreads in my roth ira account. Can anyone tell me who allows this?

  8. hec says:

    I’m trying to open a Roth IRA but looking for low cost brokerage firms.
    Can anybody recommend a good brokerage firm?

    How about opening up a ROTH with a bank or credit union, would that be a better option?

    Advice on this answer would be much appreciated.

    • Rob Berger says:

      hec, I think one of the best brokerages for an IRA is Scottrade. That’s where I opened my first SEP IRA. They have offices throughout the country, excellent customer service, and low cost trades.

  9. Ed says:

    Hello Rob,

    I need some advise. I went from using a financial advisor at Well’s Fargo to a financial advisor with wealth financial services, transferred my IRA account to TD ameritrade. I was told there was a charge of 1.75% annual. It’s more like 1.75% per qt. With the market being what it is and the fees my advisor is charging I am out $14,000 to date.
    Can I stay with TD ameritrade and do away with this advisor? I have to do something fast/please advise.

    • Rob Berger says:

      Ed, you can use TD Ameritrade without a financial advisor. Absolutely.

  10. Jas Mais says:

    Thanks for the reviews Rob, very helpful. I am 31 years old and am wanting to start investing and opening up a ROTH IRA…. would it be advisable to open it up with my credit union? Otherwise I was thinking about TDAmeritrade as I have read mostly good things about them, including your article.

    • Jas Mais says:

      …P.S….. I have some money in mutual funds and already a ROTH IRA with Edward Jones(I just opened it)….. What are your thoughts about Edward Jones? —– Thanks.

      • Rob Berger says:

        Jas, I’ve never used Edward Jones. My concern, however, would be with fees. If you can find low cost index funds to invest without paying an advisor, they may be fine. But I’ve heard Edward Jones can charge really high fees.

    • Rob Berger says:

      A lot depends on how you want to invest the money you contribute to the Roth IRA. If you plan to buy stocks and ETFs, I think TDAmeritrade is a fine choice. If you want to invest primarily in mutual funds, I’d open the IRA at the mutual fund company whose funds you plan to buy (e.g., Vanguard or Fidelity).

  11. Chip Pettirossi says:

    Rob, I’m looking for an app that will compare mutual fund performance (return minus fees(mgmt, mkt, etc) minus sales charge) to other funds in the same class AND to all relevant industry benchmarks.
    Do you have an opinion/review on GardVest?
    Will Personal Capital provide this info?

    Thanks!

    • Rob Berger says:

      Chip, I’d suggest using Morningstar. I’ve not used GardVest, but will check it out. I don’t think Personal Capital provides this type of information.

  12. Marco Van Baster says:

    Hello Rob,

    I am 27 years old, the company I work for does not provide 401k so I am looking into a Roth IRA for when it comes time to retire.. I basically want to set it and let grow on it’s own with minimal intervention. Entry with no minimum account or maintenance fees. What would you suggest.

    • Rob Berger says:

      If you must have no minimum, it’s going to be tough to find an option with no fees. Vanguard has a $1,000 minimum. You won’t pay maintenance fees, just the expense ratios of the funds. Betterment has no minimum, but they do add an extra charge on top of the ETF fees.

  13. Bob says:

    Hi, I want to open a SEP IRA. I have a traditional trading account with tdameritrade but I’m not an active trader. Do you think it’s better to open the SEP with them or with a mutual fund company like Fidelity? If with a mutual fund company, which one would you recommend?
    I’m 39 years old.

    Thank you.

    • Rob Berger says:

      Bob, it really depends on what you want to invest in. If you like a specific mutual fund company, opening the SEP with them is generally a smart move. I use Vanguard because I prefer its index funds.

  14. Mike says:

    Hi Rob, i’m looking on investing my money with high yielding interest for retirement purposes. I just had an IRA with vanguard but would like to check other companies with excellent teack record and low fees. any investment companies you recommend for bonds, stocks, etc.?

    • Rob Berger says:

      Mike, Vanguard is my personal favorite. But there are plenty of other options for low-fee index funds, such as Fidelity.

  15. Florida says:

    Interesting analysis ! I learned a lot from the points – Does someone know where my company might be able to get access to a fillable Canada T2125 document to complete ?

    • alvin davey says:

      Hi Florida, my partner pulled a sample Canada T2125 form using this https://goo.gl/BQpCTi.

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