An IRA (individual retirement account) is an investment account with tax benefits. Since most brokerage firms offer traditional IRAs and Roth IRAs (the two main types), choosing the best IRA account comes down to fees, investing features, and customer support.
For our 2021 Annual Review, we reviewed and rated 11 of the top online brokers. To find the best IRA accounts, we first focused on the fees and available retirement account options. Then we tested each broker’s market research tools, retirement education offerings, customer service quality, multi-account management capabilities, and mobile apps. We also tested how easy it was to perform everyday tasks such as placing trades and transferring funds. Here are the results of our research:
Best IRA Accounts for 2021
Here are the top five online brokers for IRA retirement accounts, based on over 80 variables.
- Charles Schwab - Best for IRA accounts overall
- TD Ameritrade - Best education and trading tools
- Fidelity - Excellent for traditional and rollover IRAs
- E*TRADE - Balanced offering
- Merrill Edge - Best for ESG research
Best for IRA accounts overall
For investors seeking $0 stock and ETF trades, excellent research, quality trading tools, and access to professional retirement planning, Charles Schwab will not disappoint. Charles Schwab is our number one pick for IRA accounts and broader retirement investing thanks to its combination of excellent IRA account options, including optional automated portfolio management (robo-advice) and on-demand advice from Certified Financial Planners (CFPs). Read full review
Best education and trading tools - Open Account
Exclusive Offer: Get up to $375 and trade commission-free with TD Ameritrade.
While not our top pick for IRA accounts, TD Ameritrade finished No. 1 overall in our 2021 review. TD Ameritrade offers no-fee IRAs and charges $0 for stock and ETF trades. Even better, we found that TD Ameritrade offers the largest selection of investment education, which every investor needs while saving and planning for retirement. Read full review
Excellent for traditional and rollover IRAs - Open Account
Trade Commission-Free: No commissions to trade online U.S. stocks, ETFs, and options.1
From industry-leading research for stocks, funds, and bonds to excellent education and tools for retirement planning, Fidelity delivers a terrific IRA experience. Stock trades are $0 per trade, and Fidelity charges no miscellaneous fees for IRA accounts. Serving over 32 million customers, Fidelity is a winner for everyday investors. Read full review
Balanced offering - Open Account
Limited Time Offer: Open and fund an E*TRADE account & get $600 or more w/ code: BONUS21
E*TRADE provides a variety of trading tools and educational resources for investors saving for retirement. Unfortunately, the areas most important to IRA accounts, such as research and education, are also areas where E*TRADE trails its closest competitors. That said, E*TRADE's IRA account experience will undoubtedly satisfy the majority. Read full review
Best for ESG research
Merrill Edge offers $0 trades with industry-leading research tools (especially ESG research) and excellent customer service. Better yet, for current Bank of America customers, Merrill Edge's Preferred Rewards program provides the best rewards of any bank broker we tested in 2021. Read full review
IRA account features comparison
When comparing accounts from different IRA providers, important considerations include: minimum deposit requirements, IRA annual account fees, account closure fees, stock and ETF trading fees, and any other miscellaneous fees.
Here's an IRA account comparison for Charles Schwab, Fidelity, TD Ameritrade, E*TRADE, and Merrill Edge. (Use our online brokerage comparison tool to compare even more account offerings.)
|ETF Trade Fee||$0.00||$0.00||$0.00||$0.00||$0.00|
|Mutual Fund Trade Fee||$49.95||$49.95||$49.99||$19.99||$19.95|
|Options (Base Fee)||$0.00||$0.00||$0.00||$0.00||$0.00|
|Options (Per Contract)||$0.65||$0.65||$0.65||$0.65||$0.65|
|Futures (Per Contract)||$1.50||N/A||$2.25||$1.50||N/A|
|Broker Assisted Trades Fee||$25.00||$32.95||$44.99||$25.00||$29.95|
|IRA Annual Fee||$0.00||$0.00||$0.00||$0.00||$0.00|
|IRA Closure Fee||$50.00||$0.00||$0.00||$60.00||$49.95|
|Account Transfer Out (Partial)||$25.00||$0.00||$0.00||$25.00||$0.00|
|Account Transfer Out (Full)||$50.00||$0.00||$75.00||$75.00||$49.95|
|Returned ACH Fee||$25.00||$0.00||$25.00||$0.00||$30.00|
|Returned Wire Fee||$25.00||$0.00||$25.00||$0.00||N/A|
|Stock Certificate Processing Fee||$100.00||$0.00||$0.00||$0.00||$500.00|
|Stock Certificate Delivery Fee||N/A||$100.00||$500.00||$75.00||N/A|
|Paper Statement Fee||$0.00||$0.00||$0.00||$2.00||$5.00|
|Paper Confirmation Fee||$0.00||$0.00||$0.00||$0.00||$3.00|
|Domestic Wire Fee||$25.00||$0.00||$25.00||$25.00||$24.95|
|International Wire Fee||$25.00||$0.00||$25.00||$25.00||$24.95|
How to choose an IRA provider
Before opening your new retirement account, consider these six tips for success:
1. Choose a broker with no IRA fees. The more you pay in fees, the less money you have to invest for your future. Watch out for maintenance fees, fees for opening the IRA, fees for closing it, fees for transferring your money elsewhere, etc. (None of the brokers we recommend as top IRA accounts charge these types of fees.)
2. Decide which type of IRA to open. Should you go with a traditional IRA or a Roth? The main difference is when you get your tax break. A traditional IRA provides an up-front tax break: Contributions are tax-free (meaning you may be able to deduct them from your taxes today). Taxes come due when you withdraw money from the traditional IRA in retirement. With a Roth IRA, contributions are taxed up front and withdrawals down the road are completely tax-free. (Check out the more detailed Roth vs. traditional IRA explanation below.)
3. Make sure the account can age with you. You’re going to have an IRA for years — maybe decades — up to and throughout retirement. Take the time to make sure the platform is easy for you to navigate, the service has retirement investing tools you’ll use, and that you’re satisfied with the customer service. Don’t worry if you discover your first IRA choice is not the right fit: It’s easy to move your IRA to a new broker. (Check out our full online broker reviews for more information about the providers we recommend.)
4. Maximize investment returns by making early contributions. The younger you are when you open and begin contributing to your IRA, the longer your portfolio will grow without being taxed. Even a few extra months of having your money in the market can make a significant difference in your long-term investment returns. Each year try to make your IRA contribution as early as possible. And remember, the IRS gives you until April 15 (the tax filing due date) to make your contribution for the prior tax year!
5. Expand your options with a 401(k) to IRA rollover: If you have money sitting in a former employer’s 401(k) plan, moving it into a self-directed IRA will give you much more control over your investment dollars. You’ll maintain the tax benefits of the 401(k), and expand your investment choices beyond the limited number of mutual funds offered in most employer-sponsored plans. Rollovers are easy: Simply tell the new broker what you want to do and they’ll walk you through the process.
6. Look for new account bonuses: Competition for your retirement savings among discount brokers is fierce. As long as you’re looking for a place to put your retirement savings dollars, take advantage of the current offers and get a bonus for opening a new account.
What securities can I trade with an IRA account?
You can trade stocks, ETFs, mutual funds, bonds, basic options, and even bitcoin in an IRA account.
Can I use margin in an IRA account?
No. You cannot trade with margin in an IRA account. To access margin and trade with leverage, you have to use a traditional, taxable brokerage account. Margin trading is restricted in IRA accounts because it is considered too risky.
Do I have to pay fees each year to maintain an IRA account?
You shouldn’t have to. Most U.S. brokers charge no annual IRA maintenance fees. If you run into one that does, we recommend you look elsewhere. Some brokers will, however, charge an IRA closure fee when you close the account (or even a transfer fee to move your money). But even that is rare among the biggest, most well-known brokerages. (Our online brokerage comparison tool will help you compare account fees and more.)
Can you lose money in an IRA?
Absolutely. IRA accounts are like any other brokerage account: You’re investing your money in securities like stocks, ETFs, and mutual funds, all of which carry some degree of risk.
The idea is you take on that risk for the opportunity to earn a higher reward (a bigger return on your investment) over the long term. That said, if you invest in lower-risk securities like bonds or money market funds, then the risk of losing all your money will be far lower. But so, too, will any potential payoff.
What is an IRA?
An Individual Retirement Account (IRA) is a type of retirement account for U.S. taxpayers. An IRA lets you invest in stocks and save for retirement while enjoying certain tax benefits, right from within an online brokerage account. The three most common retirement account types are traditional IRAs, Roth IRAs, and SEP IRAs.
What is a Traditional IRA?
A traditional IRA is an account that provides an up-front tax break for saving money for retirement. Contributions to the account are pre-tax (meaning you may be able to deduct all or part of the amount from your current year’s taxes). Furthermore, all earnings over the course of the account's life are tax-deferred until you start withdrawing for retirement. At that point you pay income taxes on your withdrawals.
More details: With a traditional IRA, you can contribute up to $6,000 per year if you’re under the age of 50, and $7,000 per year if 50 or older. However, any withdrawals before the age of 59 and a half are subject to an early distribution penalty of 10%. See this Wikipedia page for more information.
What is a Roth IRA?
Contributions to a Roth IRA are made with after-tax dollars. Although you get no up-front tax deduction, your withdrawals during retirement are completely tax-free. Like a traditional IRA, earnings growth over the course of the account’s life are not taxed.
More details: You’re allowed to contribute up to $6,000 a year to a Roth IRA ($7,000 if you’re over age 50). Eligibility for the Roth IRA is based on your income. Unlike Traditional IRAs, contributions to a Roth IRA (not earnings) can be withdrawn without penalty at any time and for any reason. Early withdrawal rules are different for earnings, which require a "seasoning period" (currently five years). See this Wikipedia page for more information.
Roth vs. Traditional IRA: For more information, see this IRS chart comparing traditional and Roth IRAs.
What is a SEP IRA?
A Simplified Employee Pension IRA (or SEP IRA) is a traditional IRA modified for business owners and any employees they might have. SEP IRA contribution limits are much higher than what’s allowed in traditional and Roth IRAs.
More details: Employers can contribute as much as 25% of their net income or $58,000 per year in 2021 (whichever is lower). Like a traditional IRA, SEP IRA contributions are tax-deferred (and deductible from your taxable income now). Distributions during retirement are taxed at your then income tax rate. See this Wikipedia page for more information.
What is a 401(k)?
A 401(k) is a type of retirement account American employers offer their workers. Like a traditional IRA, the regular 401(k) is a tax-deferred investment account. Some employers also offer a Roth version of the account — a Roth 401(k) — where contributions are post-tax and qualified withdrawals are tax-free.
More details: In 2021, employees can contribute up to $19,500 to a Roth or regular 401(k), or $26,000 if you are age 50 or older. Many employers match a portion of employee 401(k) contributions as an incentive to save (typically between 3% and 6% of an employee’s salary). Different variations of profit sharing can also be incorporated, although they are less common.
Have money in an old 401(k) plan? That money is yours to roll into an IRA with a brokerage you choose. See this IRS page for more information.
Can I have a 401(k) and an IRA at the same time?
Yes, you can contribute to a 401(k) and an IRA in the same year, as long as you stay within IRS contribution limits.
What is the best way to save for retirement?
A good retirement savings strategy is to first contribute enough to your 401(k) to max out any company match. Next, direct your savings into an IRA account where you have a broader investment selection and more control over account fees. Finally, after you’ve capped your IRA for the year, return to your 401(k) with any remaining savings.
Who has the best rollover IRA?
The best online brokers for 401(k) rollovers are Charles Schwab, Fidelity, TD Ameritrade, Merrill Edge, and E*TRADE. All of these brokers — the best IRA companies in our roundup — offer excellent rollover IRA accounts. Plus, they make the process easy to transfer your funds from a former employer’s 401(k) plan or an IRA at a different brokerage.
What are the best IRA accounts?
Our testing found that the best IRA accounts come from Charles Schwab, Fidelity, TD Ameritrade, Merrill Edge, and E*TRADE. All of these large online stock brokers offer IRA accounts (traditional, Roth, SEP, spousal, etc.), and most offer the choice of self-directed or managed accounts. Not only that, but fees are low, the websites are easy to use, and all five brokers provide thorough retirement education.
To recap, here are the best IRA accounts for 2021.
Explore our other online trading guides:
- Best Online Brokers
- Best Online Brokers for Beginners
- Best Brokers for Day Trading
- Best Brokers for Penny Stocks
- Compare Online Brokers
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