Online discount brokers have a variety of resources that the average investor might not know about. One of those resources is housing your Independent Retirement Account, commonly known as your IRA. Whether you are looking to open a traditional IRA, Roth IRA, rollover or SEP IRA, an IRA is an excellent way to set aside funds for your future.
Not every online broker, however, offers IRA accounts. And with those discount brokers that do, the minimums, fees, and resources available can vary significantly from one brokerage firm to the next.
Before we look at specific brokers, there is one additional option to consider–Betterment. While not a traditional broker, Betterment makes investing in an IRA a snap. You simply pick the stock / bond allocation you want, and Betterment invests your money in a handful of excellent ETFs and extremely low costs. Particularly if you aren’t an active trader, Betterment is an excellent option.
With that in mind, let’s take a look at the best options available for IRA accounts within the discount broker’s space.
- IRA’s available: Traditional / Roth / Rollover / SEP
- 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: Editor’s Choice–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.
- IRA’s available: Traditional / Roth / Rollover / SEP / Educational
- 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: Editor’s Choice–OptionsHouse offers one of the lowest fee structures you’ll find anywhere (e.g., $2.95 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.
- IRA’s available : Traditional / Roth / Rollover / SEP / SIMPLE / IRA for Minors /Beneficiary / Roth IRA CD / Traditional IRA CD
- Fees associated with account: $25 annual custodial fee + additional fees
- Account minimums: To avoid additional custodial fees, a minimum of $25,000 between all E*Trade accounts need to be kept
- 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.
- IRA’s available: Traditional / Roth / Rollover / SEP / SIMPLE
- Fees associated with account: Conversion fee – $50 / Transfer out fee – $50 / Termination fee – $50
- Account minimums: None (No initial minimums and/or account requirements)
- Takeaway: TradeKing is a mix of good and bad. It has low cost trading (you can trade stocks for as low as $4.95), but the fees are less than ideal. For more information, check out our TradeKing review.
- 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.
- IRA’s available: Traditional / Roth or Conversion / Rollover
- 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)
- Takeway: Ideal for those looking to make automatic monthly investments into one or more stocks. For more information check out our ShareBuilder review or visit ShareBuilder.
- IRA’s available: Traditional / Roth / Rollover / Inherited / Custodial
- Fees associated with account: As long as account minimums are maintained, no fees of any kind.
- Account minimums : $1000 minimum on all accounts except Custodial ($100 minimum)
- Takeaway: As long as you deposit at least $1,000 into your account, Charles Schwab is a reasonable choice for a full service brokerage. Charles Schwab, however, is not the lowest cost broker on the list. For more information, visit Charles Schwab.
- IRA’s available: Traditional / Roth / Rollover / SEP
- 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: $2,500 initial deposit minimum to invest and a minimum of $200 monthly contribution
- Takeway: Fidelity offers full brokerage services, but the trading and mutual fund costs are high. For more information visit Fidelity.
- IRA’s available – Traditional / Roth / Rollover
- Fees associated with account – No set-up, maintenance or annual fees but there is a $75 termination fee.
- Account minimums – None (No initial minimums and/or account requirements)
- Takeway: Well known for its trading platfrom, TradeMonster is a good choice for experienced and active traders. For more information check out our TradeMonster review or visit TradeMonster.
When 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.
Rob Berger
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Published or updated December 20, 2012.
{ 6 comments… read them below or add one }
For Canadian investors they can look at Questrade.
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
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
@ 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
Liked how this article went over a lot of the big guys in the industry. Would like to see a review of some of the 2nd tier options as well.
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?