Investing

Best IRA Accounts in September 2022

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You deserve the best IRA account for your retirement savings. From low fees and opening balance requirements to great customer service, the best IRA account for you will be the one that melds the perfect mix of features that suit your investment needs. But how do you find the best without having to go through… all the rest?

MagnifyMoney’s done the hard work for you. We’ve reviewed a wide range of features at IRA account providers and rated each on how well they stack up to our exacting standards. From there, we crafted our top picks for the best IRA accounts for September 2022 and broke our picks out into the best for hands-off and hands-on investors.

Why? Because you also deserve an IRA account that matches your investment style.

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The best IRA accounts in September 2022

Best IRA accounts for hands-off investors
IRA provider / robo-advisorAdvisory feeBest for...
Fidelity / Fidelity GoNone (less than $10,000); $3 a month ($10,000-$50,000); 0.35% a year (above $50,000)Investors who want access to a wide variety of investment types without expense ratios
Betterment /Betterment Digital Plan0.25% per yearInvestors who have multiple retirement accounts and want to maximize tax savings
Charles Schwab / Charles Schwab Intelligent PortfoliosNone, but clients must hold 6%-30% of deposited funds in cash at Schwab BankConservative investors with $50,000+

Best IRA accounts for active investors
IRA providerAnnual feeBest for...
Vanguard$20 for each brokerage account, but this can be easily avoidedInvestors who want a wide variety of investment types with low expense ratios
E*TRADENoneInvestors who want to focus on mutual funds, stocks and exchange-traded funds (ETFs)
Merrill EdgeNoneInvestors who are also Bank of America customers

Best IRA accounts for hands-off investors

Robo-advisors are automated investing services operated by established brokerages and stand-alone companies. They’re designed to be less expensive and to help people who lack the specialized knowledge necessary to make the best possible retirement investments.

Fidelity

Fidelity Go is a simple and smart robo-advisor that doesn’t nickel and dime you. It also offers great tools for beginners. You can take a short quiz — à la Buzzfeed style — and Fidelity Go recommends a strategy based on your risk appetite, from conservative to aggressive. To open an account, you don’t need to meet a minimum balance requirement; Fidelity will start investing your funds once you deposit $10.

Fees: No advisory fees when you’re investing less than $10,000; over that is $3 a month and more than $50,000 is 0.35% a year. And you don’t have to worry about layered fees. There are no trading fees, transaction fees or rebalancing fees. Fidelity Go strongly invests in Fidelity Flex® mutual funds that largely have zero expense ratios. They do not charge management fees or fund expenses, with limited exceptions.

ProsCons
  • $10 to start investing
  • Wide range of investment types
  • Low management fee
  • Many funds have zero expense ratios
  • For on-demand advice from an advisor, you need a minimum balance of $25,000 and to pay a 0.50% fee

Betterment

Betterment’s Digital plan offers a full suite of robo-advisor features for IRA investors at low cost, with no minimum deposit. You can customize your portfolio, accept recommendations and set specific goals. Available tools include automated dividend reinvestment, recurring deposits and features like the Tax Loss Harvesting+ and Tax-Coordination; Both aim to decrease your tax bill and come at no extra cost.

Fees: Betterment’s robo-only Digital plan costs 0.25% per year with no required minimum balance. For personal advice, the Premium plan costs 0.40% annually and requires a minimum balance of $100,000. If you invest an exceptional amount, the Digital plan charges 0.15% and the Premium charges 0.30% on balance portions over the $2 million mark. Overall, Betterment itself does not levy other fees — for transactions, trades, transfers or rebalancing — but individual funds charge separate fees that add to your total investment cost. For example, if your Digital plan funds charge 0.11% (which is Betterment’s average expense ratio), you would pay that plus the 0.25% for a total annual fee of 0.35%.

ProsCons
  • No required minimum balance
  • Free tools to lessen tax effects
  • Large degree of customization possible
  • Most funds do have expense ratios
  • Professional advice requires a Premium plan

Charles Schwab

Charles Schwab Intelligent Portfolios can be best for conservative investors who want a robo-service and have more than $50,000 to invest. Portfolios typically have up to 20 asset classes and you don’t pay a management, advisory or commission fees for online trades on thousands of assets: listed stock, ETFs and mutual funds. Instead, Intelligent Portfolios clients must hold 6%-30% of deposited funds in cash at Schwab Bank, which currently pays 0.09% APY. This is a very conservative requirement that other robo-advisors generally don’t have. And while tax-loss harvesting is available for free to help reduce your tax bill, you need a minimum of $50,000 invested to activate it.

Fees: While many online trades are free, other online trades do come with fees, the largest being up to $74.95 per purchase of mutual funds that are not part of Schwab Mutual Fund OneSource. Schwab’s ETF expense ratios range from 0.04% to 0.18%. If you want more personalized attention, broker-assisted trades typically have a $25 service charge and a premium subscription provides 1:1 access to a CFA and more planning tools, though it requires a minimum balance of $25,000 and charges advisory fees — a one-time fee of $300 for initial planning and then $30 a month.

ProsCons
  • 24/7 live support
  • No advisory, management or commission fees
  • High cash allocation requirement
  • $5,000 minimum balance requirement
  • $50,000 minimum to activate tax-savings tool

Best IRA accounts for hands-on investors

If you are confident in making financial decisions and are willing to put in the time and effort needed to maintain investment portfolio assets, a traditional brokerage IRA can be a good option. With the selected IRA providers below, you have complete control over how investments are allocated within the account. The best part: You pay no management fees.

Vanguard

Vanguard Brokerage Services offers a wide selection of funds at low costs. From individual stocks to money market accounts, you have a full spectrum of assets to choose from. Mutual fund options include target-retirement funds with automatic rebalancing, indexed, social and actively-managed assets. Vanguard’s average expense ratio of 0.09% is well below the industry average, which is around 0.55%. There are no commission fees for almost all types of online trading and you can avoid most service fees by signing up for electronic paperwork delivery. To start, you only need enough funds to buy an investment. Vanguard doesn’t have a minimum account balance and ETF prices typically start at $50.

Fees: Roth, traditional and simplified employee pension (SEP) IRAs have a $20 annual fee for each brokerage account; and $20 for each Vanguard mutual fund in a mutual-fund-only accounts. You can avoid these by signing up for electronic delivery of paperwork or investing $10,000 in Vanguard assets in each account. Simple IRAs charge $25 for each Vanguard mutual fund in each account, which can be avoided if you invest a total of $50,000 in Vanguard assets. Personal advising plans cost 0.30% per quarter. Vanguard Digital Advisor charges a 0.20% annual fee.

ProsCons
  • Easily avoided service fees; no commission fees for almost all types of online trading
  • No required minimum account balance
  • Spectrum of asset choices
  • Few beginner-friendly tools
  • Personal advising and robo-advising will incur further costs

E*TRADE

E*TRADE Securities offers no annual IRA fees, no account minimums, no commission fees for stocks and ETFs, and one of the broadest assortments of no-transaction-fee mutual funds in the industry with over 4,500 no-transaction-fee mutual funds available. As Morgan Stanley owns E*TRADE, you can access their robust selection of market research resources, from beginner basics to current market news.

Fees: E*TRADE’s trading fees are higher than some peers, like the $1.00 per bond online trading fee. And E*TRADE discourages short-term trading with a $50 fee on certain funds held for less than 90 days.

ProsCons
  • Over 4,500 no-transaction-fee mutual funds
  • Other trading fees apply

Merrill Edge

Merrill Edge self-directed retirement accounts have no minimum investment, no annual account fee and $0 trades. It offers an array of tools, like friendly investment news and research, a calculator for mutual fund expenses and advice videos for beginners. Owned by Bank of America, you also have the additional conveniences of easily linking a Bank of America account and transferring money using Zelle®.

Fees: Each fund you choose will have its own associated fees. Expense ratios for Merrill Edge’s domestic mid-cap equity funds range from 1.04% to 1.85%, as of November 2021.

ProsCons
  • 24/7 customer service
  • Few trading fees
  • Clear articles, videos and tables present investment research
  • For your investment balances to qualify you for Bank of America rewards, you have to select a guided account; Merrill Guided investing has a high price tag, starting at 0.45%

What are the benefits of an IRA account?

IRAs help you save for retirement in a tax-advantaged way. But what does that mean? This may be one of the few times you feel like the IRS is actually on your side.

With an IRA, you’re able to save for retirement without worrying about capital gains taxes. This means you can buy and sell investments in an IRA without worrying about a current tax liability. Your investments get to grow tax-deferred with a traditional IRA and tax-free with a Roth IRA.

In retirement, you can make withdrawals from your IRA but your IRA type determines whether you’ll have to pay income tax on those withdrawals. With a traditional IRA, you’ll pay income tax on your withdrawals. With a Roth IRA, however, your withdrawals are tax-free.

Are there contribution limits for IRAs?

The IRS sets contribution limits for all retirement accounts. For 2022, all types of IRAs (Roth and traditional) have an annual maximum contribution of $6,000. That limit bumps up to $7,000 if you’re age 50 or older.

How we chose the best IRA accounts

To determine our list of the best IRA accounts for hands-off investors, we focused on management fees, account minimums and expense ratios.

To determine our list of the best IRA accounts for hand-on investors, we focused on low account fees (yearly fees, transfer fees and trading fees), account minimums and the diversity of investment products offered (stocks, bonds, ETFs and mutual funds).

For both, we considered the ease of use and the amount and quality of other resources offered, such as quizzes to determine risk appetite and market research resources.

Frequently asked questions

An individual retirement account (IRA) is a type of investment account that receives special tax treatment from the IRS. These accounts are designed to help you save for retirement and build your wealth by offering features like tax-deferred or tax-free growth (depending on the IRA type you choose), and even the potential for tax-free withdrawals during retirement with Roth IRAs.

It depends. If you meet the income guidelines for Roth IRAs, you may prefer to open a Roth. However, if you don’t meet Roth income guidelines or need to deduct your contributions on your income taxes, a Traditional IRA may be the better choice. We’ve created a guide that compares Roth and traditional IRAs to help you make the best choice.

You can have an unlimited number of IRA accounts. However, the maximum annual contribution limit for all accounts you have is cumulative. For example, if you’re subject to a $6,000 annual contribution limit in 2022, you can only contribute a total of $6,000 across all IRAs you own, not $6,000 in each IRA.

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