I ranked the best online brokers in a recent article for TheSimpleDollar.com, which gave me a head start here, with regard to ranking “the best” Roth or Traditional IRA accounts. Needless to say IRA accounts help you save for the long term as well as provide a nice IRS tax break!
In 2015, one of the biggest changes to the IRA landscape has been the rise of online financial advisors (aka “OFA” or “Robo-Advisors”). While the more traditional money management firms are still your best bet, I’ve included a small section on OFAs in this article, as they do warrant discussion for some people.
After looking at the IRA offerings from several firms, I recommend E*Trade as the best IRA-provider (for most people), based on a number of factors that I’ll cover later in this article. There are also three other companies worth consideration, depending on your preferences.
The four (4) best IRA companies for 2015:
3. TD Ameritrade
The common features of these four companies:
• Access to a variety of investment products;
• Several types of IRA accounts;
• Introductory deals on rollovers or new accounts;
• Access to quality support, research, and education.
So what makes these companies the best?
All four offer a variety of resources beyond acting as a vehicle to establish an IRA account. Three of the four companies offer brick and mortar office locations that allow you to go in and actually talk to a live person, but TradeKing (no brick and mortar offices) offers less expensive fees and trading costs than the others.
Since I’ve acquired a solid understanding of all the best online brokers, it was fairly easy to review several of the same companies to determine the best Roth IRA and Traditional IRA accounts. You can’t go wrong with any one of these companies. It’s really a matter of personal preference – they are all great choices.
Get up to $600 for opening a new IRA account with E*Trade.
E*Trade is known as one of the all-around best brokers year after year because they offer access to every investment product and resource you could possibly need. E*Trade is loaded with information on how to rollover your IRA, complete an IRA conversion, or just open a new account.
Depending on how much you deposit or transfer, you can receive up to $600 just for opening an account with E*Trade. You can also invest in over 8,000 mutual funds, and 1300+ do not charge transaction fees. With just 28 locations nationwide some locations, there are some E*Trade branches that offer face-to-face customer service.
5 Reasons to Open an IRA account with E*Trade:
1. Wide range of investment choices;
2. No account minimum;
3. Deposit $10k or more and trade free for 60 days;
4. Ranked as the #1 broker by Kiplinger’s in 2012;
5. Access to extensive research (Morningstar, S&P, Credit Suisse) and professional guidance.
A reason not to open an IRA account with E*Trade: Trading commissions can be twice as much as some brokers.
An E*Trade IRA is best for:
• Those who want a variety of investments in their IRA;
• Low-frequency traders;
• Long-term mutual fund investors.
TradeKing offers the lowest commissions and fees.
TradeKing is an online broker that only continues to improve after merging with Zecco in 2013. Since both companies were ranked in my top 20 brokers, I’m sure the combination of the two will only make things better for TradeKing in 2015 and beyond.
TradeKing is known for providing great value, as evidenced by their low trading fee of $4.95 per stock or options trade. Upon opening an IRA account you’ll have access to all of their trading tools, which surpass the other best Traditional IRA and Roth IRA accounts in terms of options trading.
TradeKing will not, however, hold your hand as much as the other full-service brokers. This type of IRA account is designed for self-directed investors and people looking to save money on trading costs more so, but the savings can really add up over time (even if you’re just making a few trades each year).
5 Reasons to open an IRA account with TradeKing:
1. No account minimum;
2. $4.95 per trade and only $0.65 per options contract;
3. Ranked #1 in customer service by SmartMoney from 2010-2012;
4. Rated among the best options brokers by Barron’s;
5. Trader network allows you to see what others are doing with their money.
One reason not to open an IRA account with TradeKing: Lacks the account resources of a full-service broker.
A TradeKing IRA is best for:
• Higher-frequency traders or options traders;
• Self-directed investors;
• Deal seekers.
Get up to $600 for a rollover with TD Ameritrade.
TD Ameritrade is ranked as one of the best online brokers for trading and even investing long term. As a client, you have access to any resource you need, from banking services to advanced trading tools and trading platforms.
If all that isn’t enough, you can get up to $600 when you rollover your old 401k. TD Ameritrade’s Chartered Retirement Planning Counselors are available to guide every step of the way during your rollover so everything is covered. You also have access to planning tools, like a 401k Rollover Calculator, an IRA Selection Wizard, and WealthRuler to help you plan your goals.
5 Reasons to open an IRA account with TD Ameritrade:
1. No account minimum;
2. Access to 100+ no-fee ETFs;
3. Speak with a Chartered Retirement Planning Counselor before making any decision;
4. Ranked #1 by Barron’s for long-term investing and novices;
5. Ranked as “best broker for your IRA” in 2012 by Kiplinger’s.
One reason not to open an IRA account with TD Ameritrade: Higher-than-average trading costs and fees at $9.99 per stock or options trade.
A TD Ameritrade IRA is best for:
• All levels of experience;
• Those who want to rollover a 401k;
• Beginners who don’t understand IRAs;
• Less active investors or low-frequency traders.
Scottrade gives excellent guidance and customer support.
Scottrade is known in this industry for their superior customer support and service. They take care of their clients, regardless of how much money you have in your account. (I personally had a great experience dealing with multiple Scottrade representatives who provided me with everything I needed to test out a Scottrade account for my review.)
Scottrade also offers many of the same account features and investment products of the top full-service brokers. Their commissions are even slightly cheaper at $7 per trade. One unique thing that helps Scottrade be home to one of the best Roth IRA and Traditional IRA accounts is their Flexible Reinvestment Program.™
The program also allows you to invest dividends from stocks or ETFs into other eligible stocks or ETFs without paying a commission. Basically, you collect your dividends and then put them back to work immediately, but at no cost to you. Scottrade also offers up to $1,000 cash when you open a new account (depending on how much you fund the account with).
5 Reasons to open an IRA account with Scottrade:
1. $0 to open a retirement account;
2. Over 3,100 mutual funds with no transaction fee;
3. Over 500 branches nationwide;
4. Rated as highest customer satisfaction by J.D. Powers and Associates;
5. Decent commission prices on trades.
One reason not to open an IRA Account with Scottrade: Trading tools are slightly behind the curve.
A Scottrade IRA is best for:
• New investors;
• People who want a full-service broker and lower commissions.
*Disclaimer: The views or opinions presented in this article are solely those of the author and do not represent those of the Northern California Human Resources Association (NCHRA). The Simple Dollar and its authors promote and write about only those products or services that have been thoroughly investigated and that will add value to readers.
About the Author
Mike Jelinek is the Co-Founder of Soda, Business Manager of The Simple Dollar. After graduating from the University of Wisconsin, Mike started his career path as proprietary day trader in Chicago. During that time he learned the ins and outs of the global financial markets and had the opportunity to build a solid network of financial experts. Three years later, armed with a passionate interest for creating valuable online content--whether it was writing, editing, or strategy--Mike decided to leave the trading business, move to Florida, and take a completely different career path: digital media. Later, armed with great learning experiences in Florida, he had the opportunity to move to Seattle to help start Reviews.com and contribute to building The Simple Dollar. As the co-founder of Soda, Mike’s goal is to ensure his company’s brands generate the most useful products and content available on the Internet today.