Individual retirement accounts, or IRAs, were established by the Internal Revenue Service (IRS) to help people save and invest money for their retirement years. IRAs allow people to contribute money to an account where it grows tax-free, earning profits for the owner over many years. There are many types of IRAs available, and each one has its own set of fees.

How Does an IRA Work?

The various types of IRAs basically work in similar ways. Each year, the owner of the IRA deposits money into the account. The IRS determines the maximum contribution a person can make. After years of consistent investing, you have built up a retirement fund. When you reach retirement age, you can start to withdraw money to live on.

Why Get an IRA?

An IRA helps with retirement planning. This is in addition to any pension fund or social security benefits you will receive. One important advantage of an IRA is that you increase your financial assets, but you don’t have to pay taxes on the profits you make. The taxes are deferred until after you retire. The youngest age to start withdrawing the money is 59 1/2. Since you are retired, your overall income is likely lower, which will reflect in your (likely lower) tax liability. Many online investment sites also have a fast and easy way to set up your IRA without any hassle.

How Can IRAs Be Invested?

In most cases, you can invest your IRA in stocks, bonds, mutual funds and CDs (certificate of deposit), but some types of IRAs allow you to invest in precious metals, real estate, tax liens, mortgages, foreign currencies and franchises.

What Are the Fees for an IRA?

The fees for setting up and maintaining an IRA vary greatly depending on many factors. The type of investment you choose also determines how much you will pay in fees. For example, if you choose an IRA that allows you to invest in precious metals, you also have to pay storage fees and insurance. The financial institution you choose to set up your IRA, whether a trust company, bank or credit union, has its own set of fees. However, there is one fee that is relevant to all IRAs — early withdrawal fees. You can withdraw money at any time, but if you withdraw money from your account before age 59 1/2, you are subject to a 10 percent penalty fee. You also have to pay taxes on the withdrawn amount.

Before setting up any type of IRA, it’s important to know what the fee structure is. Online investing sites offer a way for you to shop around for financial institutions that offer lower fees. After all, the lower the fees, the more of your money you get to keep for your retirement.

Here are some special offers from the top investment sites that will help you pay for the fees associated with IRAs:

E*Trade: E*Trade will give you up to $600 in IRA fees if you set up an IRA with them. Learn more here.

TD Ameritrade: The site will actually give you up to $600 in IRA fees for free. Learn more here.

OptionsHouse: If you transfer an IRA to OptionsHouse, you will get 100 free trades and up to $125 in transfer fees. Learn more here.