Best Online IRAs

Written By Jeff Hindenach
Last updated January 28, 2021

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December 27, 2017

Simple. Thrifty. Living.

Opening an Individual Retirement Account (IRA) is one of the most recommended steps for people of any age to take in preparation for retirement, whether that day is decades away or just a year around the corner. Deciding to take action in securing a better financial outlook for your retirement is easy; making the follow-up decisions about the type of IRA to open, how much to contribute, investment strategies and more can be more challenging. This guide intends to help in making one of the first choices you’ll need to consider after deciding to open an IRA: What are the best investment companies and which company should you use? Below is a roundup and overview of the best online IRA companies in 2019.

Nearly all large financial institutions, including banks, mutual fund companies and brokerage firms, can set up an IRA. Online companies, primarily broker-dealers, also can setup and manage IRA accounts, frequently at significantly lower costs than the conventional institutions. The best online IRA companies should provide customers with good investing options for the long term and low fees. The companies highlighted here share at least the following in common:

  • Customers have access to a variety of investment products and advice; some provide access to individualized advice from financial experts.
  • Several types of IRA accounts are available (at minimum, traditional, Roth and rollover IRAs, though most also offer SEP IRA accounts).
  • All give introductory deals on rollover or new accounts. Most provide promotions for customers and referral programs. These change periodically and should be checked before opening an account.
  • Customer support by multiple methods, such as phone, email and live chat, is provided.
  • Quality resources, tools and education are offered to those looking to learn a little or a lot more about IRAs and investing.

Here are the best IRA account options

  1. Best Overall: Ally Invest
  2. Best for Beginners: Betterment
  3. Best for Simplicity: Wealthfront
  4. Best for Socially Conscious Investors: Motif Investing
  5. Best for In-Person Investing: TD Ameritrade

After a decade of operating independently, TradeKing was purchased by Ally Financial in 2016, so changes to product offerings may expand in the near future as a result of the merger. For now, TradeKing remains a highly respected discount broker known for providing excellent value; the fees are among the lowest in the industry but the investment options and available trading tools are numerous.

Who It’s Good For: People looking for quality IRAs at a rather low cost probably would like this broker, as would investors who want to enjoy greater diversification of options.

Product Features: You can choose from a variety of investment options when trading with your IRA. These include basic option strategies, stocks, mutual funds, bonds and more.

Pricing: TradeKing is especially known for its very competitive charges. Commissions are only $4.95 per equity trade as well as per option trade, though the latter also costs an additional $0.65 per contract. TradeKing fees do not include an annual fee for IRAs. A TradeKing inactivity fee of $50 will be assessed if your account has had no activity for 12 months and the balance is less than $2,500. Both transfer out and closing of an IRA account incurs a $50 charge.

TradeKing penny stock traders likely will find fault with TradeKing’s commission structure, since stocks still cost $4.95 per trade even if the value is less than $2. Additionally, another penny per share is added to the cost, up to 5 percent of trade value.

Is Ally Invest good? Is it safe? Ally Invest has established itself as a reputable firm in its relatively short existence, winning industry awards and praise. The broker is heavily regulated by entities such as the Securities and Exchange Commission (SEC), and it is a member of the Financial Industry Regulatory Agency.

Platform, Tools and Resources:

  • Customers can manage their portfolios in real-time with the streaming TradeKing platform, TradeKing Live1.
  • Participate in the world’s most traded market through TradeKing Forex. If you’re new to currency trading, you can begin learning with a $50,000 Practice Account.

Betterment is the largest independent robo-adviser. You can open an IRA account, answer a few questions and a portfolio is created and then managed on your behalf. If you want to learn as you go along, you can access one of Betterment’s financial experts or use one of the many online and interactive tools to learn how trading works.

Who It’s Good For: Betterment is a good place to open an IRA if you don’t want to make decisions about specific mutual funds or exchange-traded funds (ETFs) and prefer a portfolio that suits your level of risk be made for you.

Product Features:

  • The Betterment SIMPLE IRA product is anticipated to be made available in the near future as the platform develops further.
  • A Betterment 401(k) rollover takes just 60 seconds to set up and just two days to gain full access, and there is Betterment customer service dedicated to each customer rolling over retirement assets.
  • Betterment also offers fractional shares, which is good for those who are looking to invest for less.

Pricing and Promotions: Betterment pricing plans depend on the account’s balance. Betterment fees begin at 0.25 percent annually, with no minimum balance and no fees for trades, transactions or rebalancing. Other account plans for higher balance accounts are available that add access to personal financial advisers.

Betterment promotions for 2017 include one month commission-free and up to 12 months free when opening a SEP IRA. The company also has a referral program that rewards you with 30 days free when one of your referrals funds an account and rewards that friend with six months free. If three of your referrals fund an account, you are rewarded with 12 free months.

Is Betterment worth it, you might wonder? Is Betterment safe to invest in? Though not FDIC-insured, as most banks are, Betterment is Securities Investor Protection Corporation, or SIPC, insured for up to $500,000 per IRA and other accounts. Additionally, all investors’ funds are kept in separate accounts from the broker-dealer accounts; your money in the underlying securities always remains yours. The online trading platform uses high-level encryption and security measures. Additionally, all investors’ identities and external linked accounts are verified prior to opening.

Platform, Tools and Resources:

  • The Betterment app for mobile investing is available for both Android and iOS and allows customers to manage accounts, including IRAs, from their smartphones.
  • The Betterment safety net fund calculator provides advice about saving for emergencies tailored to your age and income.
  • Betterment for Business provides 401(k) services to companies that offer retirement savings for employees.
  • Betterment retirement guidance is found in the newly improved RetireGuide, which streamlines retirement planning with interactive tools based on your answers to questions about your financial situation.

Wealthfront, one of the largest and fastest-growing online financial advisors, offers a range of benefits and resources, including tax loss harvesting, automatic portfolio rebalancing and a single stock diversification program.

Who It’s Good For: People who want sophisticated asset allocation that they do not need to select should consider Wealthfront. This robo-adviser is a good choice for people looking to invest for the long-term with minimal effort on their part.

Product Features: Available products include Wealthfront Roth IRA accounts as well as traditional and SEP IRAs. Wealthfront will accept rollover transfers from 401(k) and 403(b) accounts also. A $500 minimum balance is required to open an account.

Pricing: Wealthfront manages your first $10,000 for free; all amounts beyond that size are charged an annual advisory fee of 0.25 percent. Because the flat fee remains the same no matter the portfolio size, if you have a large account to invest you might find lower advisory fees elsewhere. There are no Wealthfront fees for trading and no hidden fees. There are no custodial, maintenance or closing fees.

Is Wealthfront safe? A third-party custodian holds your assets in protection. All brokerage accounts are SIPC-insured up to $500,000, and Wealthfront obtained an additional $150 million coverage for added security.

If you are looking for an option that is similar to Wealthfront, check out our Wealthsimple review.

Motif Investing’s main differentiating selling point is that people can invest in companies and industries that they value. When investing in an IRA through Motif, customers know exactly where their funds are being used and they can adjust those locations as they feel appropriate.

Who It’s Good For: IRAs through Motif are good for people wanting to do good with their money, as well as those who don’t want to have to actively manage that money.

Product Features: Motif IRA products include Roth, traditional and rollover accounts. You can buy a prepackaged “bucket” of up to 30 stocks that share a common theme, or you can customize your own collection of Motif stock either through customizing one of the pre-made motifs or assembling your own collection of individual stocks. Motif offers social features that allow you to share your investment ideas with people in your networks.

Pricing: There are no Motif fees for opening or maintaining an IRA account, though a $95 termination fee applies when closing or transferring out an account. Commissions are $9.95 per motif trade or $4.95 per single stock trade. The Motif minimum investment depends on the type of account. Motif Impact accounts have a minimum balance of $1,000 that must be maintained over the lifetime of the account. Trading accounts, however, do not have an account minimum.

Is Motif safe? As a member of SIPC, accounts are insured for up to $500,000 for losses in certain circumstances. As a member of the Financial Industry Regulatory Agency, Motif is thus heavily monitored.

TD Ameritrade is especially popular for its accessibility and user-friendly model, making it particularly attractive to first-time investors. With its one-on-one support system, which is monitored by licensed brokers, it’s also popular with consumers who are interested in investing money but would prefer to be guided by a professional with expertise in trading. To make it even more user-friendly, TD Ameritrade offers a wide variety of downloadable platforms where you can have access to live-streaming stock market action to help you follow your stocks and manage your portfolio.

Are TD Ameritrade Fees Higher or Lower than Those of Competitors?

At first glance, TD Ameritrade fees may seem higher because its online broker commissions are indeed slightly higher than those of its competitors. Current internet pricing, as of fall 2016, is $9.99 per stock trade. To compensate for this, however, TD Ameritrade does not charge fees on a variety of its services. It also is currently offering a deal of up to $600 free when you trade for 60 days.

Fee-free services include an extensive range of mutual fund transactions, streaming news, third-party research and invaluable mock charting and trading tools. In addition, TD Ameritrade’s free desktop trading application, Thinkorswim, provides real-time stock scanners and data streaming, as well as charting and research reports. TD Ameritrade also offers commission-free ETFs. Curated by Morningstar, an independent investment resource that specializes in fund investing, ETFs are similar to mutual funds in that they pool investor funds into a security package, thus enabling investors to diversify their investments without having to buy and manage different individual assets. TD Ameritrade does not, however, allow you to invest in cryptocurrency. A company like BitIRA will allow you to set up a retirement IRA with cryptocurrency. To learn more, check out our best cryptocurrency reviews to get the details about cryptocurrency products.

In addition, TD Ameritrade offers access to the Trade Architect platform, a sophisticated tool that, with one click, shows you a variety of different trades that correlate with your search. Access to Trade Architect is free, as opposed to other companies, such as Fidelity Investment and E*Trade, which charge for this service.

An online IRA works essentially the same as an IRA through a brick-and-mortar institution. You select the brokerage and then open an account with an initial balance of cash, cash equivalents or rolled over funds from an existing retirement account. That money is then allocated to specific types of investments, which you might select or which might be selected on your behalf, depending on the brokerage selected. Investments tend to be less risky since the point of an IRA tends to be long-term growth for future retirement.

Online IRAs help people invest in a savings account for their future retirement. These savings accounts grow through investments in ETFs, stocks and mutual funds, primarily. If left alone, chances are the funds in the IRA would grow steadily over time. To help the funds grow more quickly, many people choose to be more involved in the selection and management of the funds held by their IRA accounts.

The best online IRA for you will depend on your particular circumstances. Your investment preferences, in terms of the level of trading you anticipate participating in, the risk level you’re comfortable with, your current and expected future income, how close you are to retirement and other factors will influence your decision.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Simple. Thrifty. Living. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of financial journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing on personal finance for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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