Once you’ve decided to open a traditional or Roth IRA, it’s important that investors find the best IRA account provider. The best IRA account providers seek to help you grow your money for retirement by offering the highest returns with the lowest fees. With it being tax season, now is the best time to focus on putting aside money for retirement if you haven’t already.
Our top picks for the best IRA accounts in 2016 are two brokerages: E*Trade and Scottrade. This is not to say there aren’t other good IRA account providers. Each discount broker offers a little something different and what may be a fit for some and not others. When you’re looking for the top IRA accounts, you want to consider some of the following:
- Available investment options
- Customer service
- Fee and commission structure
- Account minimums
- Trading platform
- Access to research reports
- Adequate educational/training resources
With that in mind, here are the best IRA account providers for 2016.
Best Overall IRA Account Providers
The best place to open a traditional or Roth IRA in 2016 is E*Trade or Scottrade. We’ve reviewed both discount brokerages and they stand out from the rest due to their low fees and commissions, variety of investment options, strong trading platforms, wide array of services, great customer service and cash promotions.
E*Trade stands out among other discount brokerages for IRA accounts. While E*Trade does charge $6.95 for their stock trades, the company more than makes up for it in value. The following are some of the reasons why you should open an IRA account with E*Trade:
- They offer over 8,000 mutual funds, 1,300+ no-load, no-transaction fee funds.
- There is no minimum balance to open an IRA account with E*Trade.
- There are no hidden or inactivity fees.
- E*Trade provides free 3rd-party research from Morningstar and Reuters.
- Wide array of IRA options – Roth, Traditional, SEP, SIMPLE, etc.
- E*Trade offers over 100 commission-free ETFs.
- You can get up to $600 cash back and 60 days worth of free trades if you rollover at least $10,000 to an IRA retirement account.
Read our E*Trade Review for a greater breakdown of the company’s services and how they can help with your retirement needs.
Scottrade, like E*Trade above, offers one of the best IRA accounts in the industry. Scottrade has lower fees and commissions than E*Trade with a flat $7 per trade. Here are some of the reasons why you should open an IRA account with Scottrade:
- Scottrade offers over 13,000 mutual funds, with 3,100+ No Transaction Fee funds. No other discount brokerage firm gives access to as many.
- Scottrade has over 500 branch locations, again, more than any other online broker.
- No hidden or inactivity fees.
- You can open virtually any kind of IRA – Traditional, Roth, SEP, SIMPLE, Solo 401(k), etc.
- Scottrade requires $500 to open an IRA. This is a relatively low account minimum, especially if you need to rollover an old 401(k) plan.
- Diverse investment options ranging from international investing, options trading, CDs, Treasuries and more.
- You can get up to $2,000 cash back when you open an IRA with Scottrade.
Read our Scottrade Review for additional details on whether Scottrade is the best IRA broker for your retirement needs.
Best IRA Accounts for Beginners
Saving for retirement can be overwhelming. Whether it is having little money to invest, lack of investing knowledge or no access to a 401(k) account for retirement can be a challenge. While each situation is unique, the last thing you want to do is put off saving for retirement. Thankfully, there are discount brokerages that can help in this fashion, so you don’t feel overwhelmed.
In both cases, the best IRA account providers for beginners are robo-advisors. Robo-advisors provide the benefits of a financial advisor without the added cost. It’s a win-win for the beginner or passive investor as they can start investing with confidence and guidance. As such, the best IRA accounts for beginners are Betterment and Wealthfront.
Betterment is perhaps the best online broker for beginners for one simple fact – they have no minimum balance requirement. Anyone can open an account with Betterment and start investing for retirement. The following are some of the reasons why you should open an IRA account with Betterment:
- Betterment has no minimum balance requirement; you can start with $20, $100, or $500.
- Betterment constructs a portfolio for you from a selection of 13 different ETFs, which are usually low-cost Vanguard or iShares funds.
- Betterment personalizes your portfolio to your needs and risk profile. You answer 10-12 questions and Betterment builds you a diverse portfolio of investments.
- Betterment actively rebalances your account free of charge.
- Betterment is a low-cost IRA provider with no hidden fees.
- You can get up to six months commission-free when you open an account with Betterment now.
Read our Betterment Review for a more in-depth breakdown of why Betterment is one of the top robo-advisors and how they can help you achieve your retirement goals.
The other pick for best IRA accounts for beginners is Wealthfront. When you look at Betterment vs. Wealthfront, you will see a fair number of similarities yet differences to make them both worth considering. Here are some reasons Wealthfront is a good place to start investing for beginners:
- Wealthfront offers a more diverse selection of ETFs for your IRA account; however, your portfolio will be limited to only 10 ETFs.
- Wealthfront boasts one of the top investing minds on their investment committee, Burton Malkiel, who wrote the famous “A Random Walk Down Wall Street”.
- Wealthfront does not have any hidden fees. In fact, the first $10,000 you invest with Wealthfront is commission-free and the company only charges a flat 0.25% fee on your assets after that. This is significantly cheaper than any financial advisor or CFP.
- Like Betterment, Wealthfront actively rebalances your portfolio and takes dividend reinvestment into consideration.
- You get your first $15,000 managed commission free when you sign up today.
Read our Wealthfront Review for a comprehensive overview of why the company and asset manager is a top IRA provider in 2016.
Best IRA Account for Active Traders
Not everyone likes to actively trade in their IRA account, especially since playing the stock market and picking individual stocks goes against basic investment advice for average investors. While not every discount broker will even allow you to actively trade in a retirement account, if you choose to do so, it’s important to find a stock broker with low fees, strong research tools, and a robust trading platform.
Our pick for the best IRA account for active traders is TradeKing. While TD Ameritrade, E*Trade and Scottrade are also excellent stock trading sites, TradeKing gives active investors the lowest stock trading costs. The following are some of compelling reasons to open an IRA account with TradeKing:
- There is no minimum balance to open an IRA with TradeKing.
- TradeKing boasts a cheap $4.95 per stock trade. This is the lowest fee and commission pricing among the largest discount brokerages.
- TradeKing offers over 12,000 mutual funds, behind only Scottrade and TD Ameritrade.
- TradeKing delivers one of the best trading platforms in the industry, as recognized by numerous finance publications.
- The company provides potential clients a service similar to what you’d find with a robo-advisor – TradeKing Advisors. You can start with as little as $500 and TradeKing does not charge any fees for the first year. If you want or need investment guidance, TradeKing Advisors is a great option with a ton of value.
- TradeKing offers forex trading, advanced stock screeners, technical analysis tools, education and training programs, and other platform features that can help you meet your investment needs beyond your retirement account.
- You get $1,000 in free commissions when you fund an account with $5,000 within the first 30 days of opening an account.
Read our TradeKing Review to learn more about how this true discount brokerage firm can help you exceed your retirement goals.
Best Roth IRA Providers – Open A Roth IRA Account Online
Roth IRA accounts can be a great way to catapult your retirement planning. You don’t get the benefit of a tax deduction the year you fund the account, but your investments grow without incurring capital gains taxes and you get to withdraw the funds tax-free when you retire.
You can open a Roth IRA at any brokerage, but you want a brokerage that provides great value. With that in mind, the best place to open a Roth IRA is TradeKing and Motif Investing. Since we’ve already discussed the benefits of TradeKing, we will focus on Motif Investing below.
Motif Investing is part robo-advisor and part standard online brokerage. With Motif Investing’s online platform, you can either build your own unique exchange-traded fund or trade individual stocks. In either instance, Motif Investing provides a number of benefits, making the company a great option for your Roth IRA account.
Below are some of the top reasons to open an IRA account with Motif Investing:
- Investors can choose from or create their own unique investment theme or “motif” – a basket of up to 30 stocks or ETFs. The company provides a selection of over 150 pre-made motifs and each trade for $9.95.
- If you want to trade individual stocks, you can do so for $4.95 per trade. This put Motif at the same level as TradeKing, with the lowest fees in the industry.
- Motif Investing has a minimum balance requirement of $250. While it’s not a “no minimum” account, this minimal balance is smaller than most.
- Like Betterment and Wealthfront, Motif Investing offers active rebalancing. Investors can determine the interval and Motif will manage it for you at a $9.95 charge.
- Motif does not have any hidden or inactivity fees.
- You can get up to $150 cash back when you open an account with Motif Investing.
Read our Motif Investing Review to determine whether this unique investment firm is the right fit for your retirement goals.
Deciding between the best IRA account providers can be a challenge. Fortunately, all of the online discount brokers and asset managers discussed above are reputable companies that can help you achieve financial independence and security in retirement.