Best IRA Investment Accounts in 2024

IRA stands for Individual Retirement Account. It is one of the most important parts of financial planning. IRA accounts allow individuals to save their hard-earned money for retirement while enjoying important tax benefits.

An IRA account holder contributes a portion of every paycheck to the account and gradually builds up a retirement fund.

Once retirement kicks in, a small portion of the accumulated money is withdrawn regularly in order to pay for living expenses. These withdrawals from the IRA account become crucial because there is no salary income after retirement.

The contributions made to an IRA account can be invested in stocks, bonds, mutual funds, and a variety of asset classes. The key difference between directly investing in such asset classes and doing so through an IRA account is the tax treatment.

Tax laws allow deductions on contributions made to traditional IRA accounts. Therefore, a working individual can ensure regular contributions to a traditional IRA account and claim tax deductions for all of his/her working life.

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However, the withdrawals made from that account during retirement are taxed.

You are essentially deferring paying taxes on your money to allow it to compound and grow faster but get taxed down the road when you start withdrawing the funds in retirement.

There is another individual retirement account known as a Roth IRA account that forgoes tax deductions on contributions but allows tax-free withdrawals during retirement.

Early withdrawals from IRA accounts can lead to penalties and taxes. There are limits on how much one can contribute to an IRA account every year.

There are also income caps for which full or partial tax deductions can be allowed. The exact benefit will depend from person to person.

However, in general, the benefits of a traditional IRA account are significant enough to warrant every working professional to have one.

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Naturally, the next question in your mind will be about where to open an IRA account. We looked at many of the top names in the industry and came up with the following list that we believe offer the best value:

Fidelity

Fidelity is one of the best-known asset management companies in the US.

Since it already has a lot of ETFs and mutual funds of its own, having an IRA with Fidelity makes sense because you can invest in those products without trading fees.

Fidelity offers traditional IRA, Roth IRA, self-employed IRA, and rollover services. There is no minimum opening balance requirement either.

Fidelity’s platform offers financial planning tools for young and experienced professionals. There is a self-service offering as well as a robo-advisory product for those who follow a passive style of investing.

The sheer scale of Fidelity means you can enjoy a low $4.95 trading fee on stocks and ETFs and also access over 10,000 no-transaction-fee mutual funds.

Merrill Edge

If you happen to have an account with Bank of America, then opening an IRA account with Merrill Edge offers some interesting benefits. Not only will your bank account get integrated with your IRA account, but you may also get commission-free trades per month depending on the size of your account.

So, if you are the kind of person that likes to be more active when making your IRA investments, then Merrill Edge might just be the most economical option for you.

Merrill Edge also offers a host of educational tools like reports, videos, and webinars. One unique offering is the Merrill Stock Story feature which provides details about a stock’s ESG rating.

There is no account minimum for a traditional IRA account and no monthly fee either. The cost per trade is slightly expensive at $6.95.

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Charles Schwab

Just like Fidelity, Charles Schwab is a well-known asset management company. It has a pretty decent IRA offering as well.

The Schwab IRA account allows users to trade using a top trading platform at a low $4.95 per trade fee. Charles Schwab also offers access to research reports and high-quality customer service.

There is no account minimum to worry about and Schwab Intelligent Portfolios offers a low-cost robo-advisory option as well for the cost-conscious customer. However, the robo-advisory platform has a $5,000 minimum balance requirement.

Betterment

Betterment is the older and largest independent robo-advisory firm in the US. It offers several IRA accounts such as traditional IRA, Roth IRA, and SEP IRA.

Betterment is great for those who simply want to invest and forget. A passive style of investing which allows technology to do its thing while wealth compounds is what Betterment is all about.

The company’s entry-level plan is called Digital Level. It is for account balances of up to $10,000 and the annual fee is 0.35%. The next plan is for balances between $10,000 and $99,000 for a fee of 0.25%.

If you have more than $100,000 in your account, then the Premium Plan offers the services of human advisors and financial planners along with the robo-advisory plan. The fee for the Premium Plan is 0.4%.

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Wealthfront

For as little as $500, you can open an IRA account with Wealthfront. Just like Betterment, Wealthfront also offers a technology-driven robo platform for investing.

It is also more economical for investors with low balances because there is no annual fee for the first $10,000 in account balance.

Wealthfront also has a neat planning tool called the Path tool through which you can plan for all of your financial and retirement goals.

The annual fee for most accounts is around 0.25%. For balances above $100,000, there are many options to customize portfolios. Wealthfront charges no trading fees or commissions for withdrawals or transfers.

You Invest by JP Morgan

JP Morgan is a huge and well-known bank in the US. It offers traditional and Roth IRA accounts through its service You Invest.

If you like trading stocks and do so frequently, then You Invest is a great option because it charges no trading fees. There are no fees if you are capable of putting together your portfolio except any third-party fee depending on the mutual funds or ETFs that you choose.

There is no account minimum and anyone can get started with even $1. You can put together the portfolio yourself or use You Invest Portfolios to follow a more guided path.

You Invest Portfolios charge a 0.35% annual fee. You Invest Portfolios also has a simulation tool through which you can test whether your investment choices help meet your financial goals.

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