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Unlike 401(k)s, IRAs — or individual retirement accounts — are generally independent of employers and can be set up by individuals who are over age 18 with taxable income.
Traditional IRAs let you make tax-deferred contributions, meaning you’ll use pre-tax dollars to grow your account. And — like with Roth IRAs — you can set up these accounts through most online brokerages, robo-advisors, and banks. Both the traditional and Roth IRA accounts also feature the same contribution limits ($6,000 for people under 50 and $7,000 for people above age 50).
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With traditional IRAs, though, you won’t pay taxes up front; you’ll simply pay them once you start making withdrawals (you can make withdrawals as early as age 59 ½ ). You’ll also likely be required to take minimum distributions after age 70.
A competitive IRA account should offer an expansive investment selection with commission-free and/or low-fee trading and investing options. The best accounts should also offer other features like retirement planning resources, human advisor access, mobile investing opportunities, and customer support.
Below, we’ve listed out top picks for the best IRA accounts. We also list each account’s strengths and weaknesses and include expert insights on traditional IRAs.
Our expert panel for this guide
We consulted financial advisors, retirement planners, and our own wealth-building reporter to inform our picks for the best traditional IRA accounts. You can find the full transcript of our interviews with these experts at the bottom of this page.
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We’re focusing our attention on what makes an IRA account most useful. When comparing accounts, it’s best to consider fees, investment options, retirement resources, and more.
How our list compares to other publications
Research is an important part of narrowing down the best IRA accounts, and Business Insider isn’t the only publication comparing the best retirement savings accounts. We’ve compared our roundup with lists from other publications to help you make a well-informed decision.
Personal Finance InsiderNerdWalletInvestopedia Charles Schwab✓✓✓Fidelity✓✓✓TD Ameritrade✓✓ Ellevest✓ Merrill Edge✓✓✓E*TRADE✓✓ Betterment✓✓✓SoFi✓✓
Best all around: Charles Schwab IRA
Why it stands out: Schwab’s traditional IRAs are completely free to set up and don’t include any account or trading fees. Traditional IRAs include $0 online equity trades, 24/7 customer support, retirement planning resources and access to the following investments: stocks, bonds, ETFs, mutual funds, and CDs.
The brokerage’s traditional IRAs also feature access to investing and market insights from Schwab experts. And – if you’re looking for automated or professionally managed portfolios – you can take advantage of Schwab Intelligent Portfolios or Schwab Intelligent Portfolios Premium. However, you’ll have to pay a $300 one-time fee and $30 monthly fee for Schwab Intelligent Portfolios Premium.
Each automated investing account is also compatible with Roth IRAs, SEP IRAs, SIMPLE IRAs, and inherited IRAs.
What to look out for: Though you’ll pay $0 for stock and ETF trades, certain transactions will cost you. For example, you’ll likely pay commissions on transactions that require special handling, restricted stock transactions, foreign exchange trades, transaction-fee mutual funds, fixed income investments, and futures.
Best for retirement saving: Fidelity IRA
Why it stands out: Fidelity’s traditional IRAs come with $0 account minimums and commission-free trades on stocks, ETFs, and options. The brokerage also offers several other retirement accounts, including Roth IRAs, rollover IRAs, small business retirement plans, and Roth IRAs for Kids. And the company offers a wide range of retirement planning resources, including its learning center which explains complex financial topics.
Fidelity IRA also offers an automated option, Fidelity Go, that provides personalized advice for hands-off investors. This account is free as long as you make under $10,000, but you’ll pay $3 per month if you’ve got a balance between $10,000 and $49,000. A balance of at least $50,000 will produce a 0.35% fee.
In addition, its investment selection — which includes no-transaction-fee funds, 7,000+ commission-free stocks and ETFs, and zero expense ratio index funds — might appeal to those looking to minimize trading costs.
What to look out for: You can use automated investment and retirement planning services for free as long as you’ve got an account balance below $10,000. Higher account balances will cost you.
Best for mobile trading: TD Ameritrade IRA
Why it stands out: Traditional IRAs at TD Ameritrade IRA don’t require minimum account sizes and feature a vast selection of commission-free stock and ETF trades, transaction-free mutual funds, and fixed income products. This brokerage is also a competitive choice for active traders since it offers multiple digital and mobile trading platforms, such as thinkorswim.
Though TD Ameritrade formerly offered its own managed portfolios, new clients will now have to set up any managed accounts through its affiliate, Charles Schwab. If you’re looking to take the hands-off route through automated investing, you can do so through Schwab Intelligent Portfolios or Schwab Intelligent Portfolios Premium.
Both automated accounts accept traditional IRAs (and other types of IRAs, as mentioned earlier), but you’ll need at least $5,000 for Schwab Intelligent Portfolios and at least $25,000 for Schwab Intelligent Portfolios Premium.
What to look out for: Charles Schwab acquired TD Ameritrade, so many of the companies’ product offerings have merged.
Best for access to human advisors: Ellevest IRA
Why it stands out: You can set up any retirement or investing accounts at Ellevest without meeting minimum balance requirements. The company offers three membership plans: Essential, Plus, and Executive. Essential costs $1 per month, Plus costs $5 per month, and Executive includes a $9 monthly fee. Each account includes access to certified financial planners and career coaching sessions.
The robo-advisor provides six different goal-based investment accounts that are designed to meet various savings goals. Ellevest also offers account strategies such as automatic rebalancing and asset allocation.
What to look out for: Ellevest welcomes all clients, but it specifically focuses on closing the gender pay gap for women and offering gender-specific strategies. Another thing to point out is that Ellevest Essential members can’t open traditional IRA accounts. To do so, you’ll need to sign up for either the Plus or Executive membership plans.
Best for DIY traders: Merrill Edge IRA
Why it stands out: Merrill Edge’s traditional IRA accounts come with $0 commissions on online stock, ETF, and option trades. Retirement accounts are also devoid of minimum balance requirements, and they give account holders a choice between the following three platforms: Merrill Edge Self-Directed, Merrill Guided Investing, and Merrill Guided Investing with an advisor.
Your investment choices here include stocks, bonds, ETFs, options, and mutual funds. In addition to educational content and retirement planning tools, Merrill Edge offers 24/7 customer service support and a live chat option.
What to look out for: Professionally managed portfolios are more expensive than self-directed traditional IRA accounts. For example, Guided investing has fees that range from 0.45% to 0.85%.
Best for passive investors: E*TRADE IRA
Why it stands out: Like most advisors mentioned in our roundup, E*TRADE’s traditional IRAs feature commission-free stock, ETF, and options trades. The brokerage also charges $0 account fees, and it offers a robo-advisor called Core Portfolios.
A major distinction, though, is that E*TRADE provides more than 4,000 no-load, no-transaction fee mutual funds (the brokerage has more than 9,000 total mutual funds). This means that you won’t pay sales charges or commissions for 4,000 of the brokerage’s mutual funds. If you prefer passive investments, E*TRADE could be suitable for you.
The brokerage also offers automated investing through its Core Portfolios platform. You’ll need at least $500 to set up this account, though.
What to look out for: You’ll pay more for options contracts if you don’t make at least 30 trades per month.
Best for robo-advice: Betterment IRA
Why it stands out: Besides its annual fees, Betterment IRA is a free choice for those looking for automated retirement account management. The robo-advisor offers two plans: Digital and Premium. You can set up the digital plan without an account minimum, but it’ll cost you an annual 0.25% account fee. The Premium plan has a 0.45% annual fee and a $100,000 minimum balance requirement, but it also includes unlimited access to certified financial planners (CFPs).
Betterment additionally offers features such as tax-loss harvesting, socially responsible investing, automatic rebalancing, and more.
What to look out for: You’ll need to sign up for the Premium plan to get unlimited financial planner access. But you can still sign up for one-time advisor consultations. Costs for such consultations range from $199 to $299.
Best for beginner investors: SoFi IRA
Why it stands out: SoFi IRA is a great choice for traditional IRAs. In addition to other investing, loans and savings options, the advisor provides Roth and SEP IRAs. The company also offers $0 commissions for stocks and ETFs, and you can set up automated investing with as little as $1. If you’re looking for financial resources and tools, SoFi IRA offers several help centers, guides, and calculators.
The company provides certified financial planners, and it even offers Stock Bits, or fractional shares, for account holders looking to buy smaller portions of companies.
What to look out for: SoFi IRA has compete product offerings, but the company has a limited selection of investments compared to other popular brokerages.
Other IRA accounts we considered, and why they didn’t make the cut
Vanguard: This brokerage offers several competitive features, including retirement planning resources and educational content, copious investment accounts, customer support and mobile access. It has a $0 minimum, but you’ll need at least $1,000 invest in many of its retirement funds.Fundrise: Fundrise is a great option for those interested in alternative investing. The company lets you use your IRA to invest in REITs, or real estate investment trusts, but Fundrise may not be the best option for those who aren’t interested in real estate investing. Interactive Brokers: This broker provides an array of retirement account types – namely Roth IRAs, Roth Inherited IRAs, traditional IRAs, traditional inherited IRAs, traditional rollover IRAs, and SEP IRAs. But you’ll need at least $5,000 to get started.Webull: Like Robinhood, Webull is a popular fee-free investment brokerage for options trading. The app also offers traditional IRAs, but it may not be the best option if you’re looking for a strong suite of educational resources and retirement guidance. M1 Finance: M1 Finance provides low fees, automated investing, and fractional shares. But the $500 minimum may be a bit high for those looking for $0 minimum balance requirements.
How we determined the winners
At Personal Finance Insider, our goal is to help smart people make the best decisions with their money. Because “best” is usually subjective, we not only highlight the advantages of a financial product or account – for example, no commissions or trading fees – but we also point out the limitations.
We spent hours comparing and contrasting the features and offerings of various financial products so you don’t have to.
Frequently asked questions
How did we choose the best IRA accounts?
We reviewed and compared more than a dozen IRA accounts to determine the top brokerages and robo-advisors with strong retirement account options. Some of the factors we considered included minimum account balances, account fees, account types, investment selection, and retirement planning resources. We also cross-referenced our list with popular comparison sites like NerdWallet and Investopedia to make sure we didn’t miss anything.
We also looked into each account’s customer service offerings, mobile app access, and human advisor offerings.
What is an IRA account?
A traditional IRA account is a tax-deferred retirement savings vehicle that allows almost anyone to contribute pre-tax dollars towards retirement. We say “almost” because you can only contribute to these accounts if you meet certain income requirements.
For instance, in 2022 single filers under age 50 can contribute a maximum of $6,000 if their modified adjusted gross income is below $124,000 (if you’re 50 or older and filing single, you can contribute $7,000).
Married couples filing jointly can contribute up to $6,000 if their collective income falls below $196,000. However, if you’re married and filing separately, you can only make partial contributions if you make below $10,000. You won’t be eligible to contribute if you make above $10,000.
Are IRA accounts worth it?
That depends on your long-term savings goals and expectations. Traditional IRA accounts rely on pre-tax contributions, and you’ll usually be penalized for making withdrawals before age 59 ½ . So if you’re okay with waiting to pay taxes on your account’s earnings at retirement age, traditional IRAs could be a good fit for you. These accounts might also be worth considering if you expect to pay less in taxes as you age.
However, you may want to consider opening a Roth IRA if you plan on paying more in taxes as you get older. This is because Roth IRAs are funded with after-tax contributions, meaning you generally won’t pay taxes on any withdrawals you make.
The experts’ advice on choosing the best traditional IRA account for you
We interviewed the following four investing and retirement experts to see what they had to say about traditional IRA accounts:
Lazetta Rainey Braxton, MBA, CFP, co-founder and co-CEO at 2050 Wealth PartnersBrian Fry, CFP, founder at Safe Landing FinancialCharlotte Geletka, CFP, CRPC, managing partner at Silver Penny Financial PlanningRickie Houston, wealth-building reporter, Personal Finance Insider
Here’s what they had to say about traditional IRA accounts. (Some text may be lightly edited for clarity.)
What are the advantages and disadvantages of opening a traditional IRA account?
Lazetta Rainey Braxton, MBA, CFP:
Contributions to the traditional IRA are not considered a part of the taxable income for the year that that contribution was made to that traditional IRA.
As you allow that traditional IRA to grow, you’re going to have both tax-deferred contributions and tax-deferred growth and earnings. So when it is time for you to retire and take out those funds, it will be subject to ordinary income tax rates, based on your income during retirement.
Brian Fry, CFP:
A traditional IRA generally offers better flexibility, freedom, and transparency than a 401(k). If you’re under income phaseout limits, then there is a tax-deduction for IRA contributions.
If you’re above income phaseout limits, there are still planning considerations for IRA contributions, for example an advanced planning strategy such as a backdoor Roth IRA. [Note: The 2021 income phase out range for single taxpayers is $66,000 to $76,000. For married couples filing jointly, the range is $105,000 to $125,000.]
A disadvantage is that there are no company match opportunities for a traditional IRA. Traditional IRAs also have hefty penalties for withdrawing funds before age of retirement.
Charlotte Geletka, CFP, CRPC:
A significant advantage of opening an IRA includes an above-the-line tax deduction if you are within the IRS income limitations for 2021 (ask your tax professional or financial advisor to double check based on your income). The IRS website also has good guidance on IRAs. In a traditional IRA, the money grows tax deferred. This is great for long term growth.
However, you will pay taxes on the money when it comes out. Also keep in mind that an IRA is what I like to call a “pay now, play later” plan. What I mean by that is that once the money goes into an IRA you will not be able to take the money out until you reach the age of 59 and a half.
Rickie Houston, Personal Finance Insider:
Like traditional 401(k)s, traditional IRAs allow you to avoid paying taxes now. The earliest you can withdraw money, without penalty, is age 59 ½. You’ll also be taxed on any distributions you withdraw later in life. However, a Roth IRA might be a better choice if you expect to make more money as you get older.
Who should consider opening a traditional IRA?
Lazetta Rainey Braxton, MBA, CFP:
[If] you want to keep your tax brackets low, a lot of people go traditional because the contributions — at the time you’re earning it and making those contributions — are in fact reducing your taxable income.
Brian Fry, CFP:
Households projecting lower taxes in the future than in the present can prefer a traditional IRA over a Roth IRA. Single households earning under $66,000 and married filing jointly households earning under $105,000 are a good fit for a traditional IRA.
If uncovered by an employer retirement account, a traditional IRA can be a good fit regardless of income.
Charlotte Geletka, CFP, CRPC:
A traditional IRA is a great option if you do not have a retirement plan through your employer or if you are self-employed. You must have earned income to contribute each year. The other good news is that you have until April 15, 2021 for your contributions to count for the 2020 year.
Rickie Houston, Personal Finance Insider:
Consider opening a traditional IRA if you’re okay with paying taxes on the withdrawals you’ll be eligible to make once you reach age 59 ½. You can also open these accounts in addition to employer-sponsored plans like 401(k)s, so this could be a great way to boost your retirement savings.
What makes a traditional IRA account good or not good?
Lazetta Rainey Braxton, MBA, CFP:
If you are age 50 or older, you are also eligible for the catch-up provision, which is also allowed for a [Roth] IRA as well as an employer-based plan. But the important fact to know about a traditional IRA versus an employer’s plan is that traditional IRAs, in terms of its deductibility, aren’t based on your adjusted gross income.
[Note: The catch-up provision allows you to contribute an additional $1,000 for IRAs if you’re 50 or older. For employer-sponsored retirement plans, you can contribute an additional $6,500 if you’re 50 or older.]
And since there is a cap on your income that relates to deductibility, it might make it less attractive as well because you might not just be eligible to make a deductible contribution.
Brian Fry, CFP:
A traditional IRA is good in providing tax advantages. Unlike a brokerage account, investors are not taxed on capital gains. There can be a deduction for contributions. Investments grow tax-deferred until distributions are made.
There are several reasons a traditional IRA could be considered a bad account type. Investors are taxed on withdrawals, which are usually much larger than initial contributions. Tax rates can be potentially higher for investors during retirement.
Charlotte Geletka, CFP, CRPC:
A traditional IRA is great for retirement savings, tax savings and investing. However, you are just pushing the tax liability down the road since you are required to pay income taxes on distributions.
The good news is that you are allowed to let the money grow tax deferred until you begin to take distributions. You may begin at age 59.5 but you must begin by age 72.
Rickie Houston, Personal Finance Insider:
One of the good things about traditional IRAs is that they allow for tax-deferred contributions of up to $6,000 per year, if you’re under age 50, and $7,000 per year (for those 50 or older). The downside is that early withdrawals on contributions will get you a 10% tax penalty.
Is there any other advice you’d offer someone who’s considering opening a traditional IRA?
Lazetta Rainey Braxton, MBA, CFP:
Know of all your options related to investments that can help support you in retirement. Think about whether you want to pay taxes now or later. With the traditional IRA, you would be paying taxes later.
Brian Fry, CFP:
Don’t open a traditional IRA or roll over your 401(k) without considering all of your options. If you’re unsure, make sure to put in the research or ask a financial professional that serves as a fiduciary to have confidence in how to best move forward.
Charlotte Geletka, CFP, CRPC:
The investments inside an IRA are chosen by the account owner. This makes the options almost endless. Also keep in mind it is designed for you to save money to be used in retirement, so do not put money in an IRA that you might need in the short term. This is not a good place for your emergency fund.
Rickie Houston, Personal Finance Insider:
Make sure to weigh the pros and cons of both traditional IRAs and Roth IRAs. Both independent accounts can be opened in addition to an employer-sponsored plan, but each account has different tax implications.