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14 Best IRA Accounts of October 2022

An individual retirement account, or IRA, is one of the best places to save for retirement. Here are the best IRA accounts available right now. Alana Benson Oct 21, 2022 Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. An individual retirement account, or IRA, is a tax-advantaged investment account that can help you save for retirement. And, spoiler alert: It typically takes just 15 minutes to open an account. We’re here to help you find the best IRA account for your situation. (Note: The star ratings on this page are for the provider overall. Some brokers with a lower overall rating are included here because IRAs are where they excel.) How (and why) to open an IRA account To open an IRA, you’ll need to provide some personal information, including your birthdate and Social Security number. Even if you have a 401(k) or other workplace plan, it can make sense to save in an IRA — as long as you also make sure to get any company 401(k) match you may be offered — because IRAs often offer more investment choices. This is important, because your investment returns will have a big impact on your savings over time. Say you put $500 every month into an IRA. An annual average return of 8% would get you more than $475,000 after 25 years. Even if you earned a more conservative 6%, you’d end up with more than $345,000 after 25 years. Every year, we evaluate a broad swath of major U.S. online brokers and robo-advisors for the best IRA account offerings. The IRAs that score the highest in our assessment are below. An individual retirement account, or IRA, is a tax-advantaged investment account that can help you save for retirement. And, spoiler alert: It typically takes just 15 minutes to open an account. We’re here to help you find the best IRA account for your situation. (Note: The star ratings on this page are for the provider overall. Some brokers with a lower overall rating are included here because IRAs are where they excel.) How (and why) to open an IRA account To open an IRA, you’ll need to provide some personal information, including your birthdate and Social Security number. Even if you have a 401(k) or other workplace plan, it can make sense to save in an IRA — as long as you also make sure to get any company 401(k) match you may be offered — because IRAs often offer more investment choices. This is important, because your investment returns will have a big impact on your savings over time. Say you put $500 every month into an IRA. An annual average return of 8% would get you more than $475,000 after 25 years. Even if you earned a more conservative 6%, you’d end up with more than $345,000 after 25 years. Every year, we evaluate a broad swath of major U.S. online brokers and robo-advisors for the best IRA account offerings. The IRAs that score the highest in our assessment are below.

Best IRA Accounts

BrokerNerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.FeesAccount minimumPromotionLearn more Fidelity IRALearn more on Fidelity's website 5.0/5 Best for Hands-On Investors$0no account fees to open a Fidelity retail IRA$0Get $100when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply.Learn more on Fidelity's website Interactive Brokers IBKR LiteLearn more on Interactive Brokers' website 5.0/5 Best for Hands-On Investors$0per trade$0Noneno promotion available at this timeLearn more on Interactive Brokers' website Merrill Edge IRALearn more on Merrill Edge's website 4.5/5 Best for Hands-On Investors$0per trade$0Up to $600when you invest in a new Merrill Edge Self-Directed account.Learn more on Merrill Edge's website E*TRADE IRALearn more on E*TRADE's website 4.5/5 Best for Hands-On Investors$0$0Noneno promotion available at this timeLearn more on E*TRADE's website SoFi Automated InvestingLearn more on SoFi Invest's website 4.9/5 Best for Hands-Off Investors0%management fee$0Freecareer counseling plus loan discounts with qualifying depositLearn more on SoFi Invest's websiteView More Our pick for Hands-On Investors

Fidelity IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.5.0/5Learn more on Fidelity's website Fees $0 no account fees to open a Fidelity retail IRA Account minimum $0 Promotion Get $100 when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply.Our Take Pros $0 trade commissions. Free research and data. Strong customer support. Quality trading platform. Cons Relatively high broker-assisted trade fee. Why We Like It Fidelity’s lineup of services for investors goes well beyond retirement accounts. The company’s brokerage arm features $0 commissions, a wide investment selection, plenty of research and advanced trading capabilities (including a strong mobile app).

Interactive Brokers IBKR Lite

Merrill Edge IRA

E*TRADE IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.4.5/5Learn more on E*TRADE's website Fees $0 Account minimum $0 Promotion None no promotion available at this timeOur Take Pros No minimum balance. Extensive research and tools. Commission-free stock, ETF and options trades. 4,400+ no-transaction-fee (NTF) mutual funds. Cons $19.99 cost for trading non-NTF mutual funds. Why We Like It Retirement investors will find a lot to love with E*TRADE’s IRA offering, including a large line-up of no-trading-fee mutual funds and an extensive library of retirement advice and tools. Plus, there’s no minimum account balance and no fee for stock or ETF trades. Our pick for Hands-Off Investors

SoFi Automated Investing

Wealthfront IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.5.0/5Learn more on Wealthfront's website Fees 0.25% management fee Account minimum $500 Promotion Get $50 customer bonus when you fund your first taxable Investment AccountOur Take Pros Get $50 customer bonus when you fund your first taxable Investment Account (NerdWallet promotion). Automatic rebalancing. Digital financial planning tools. Low management fee. Cons No large-balance discounts. No access to human advisors. No fractional shares. Why We Like It Wealthfront takes the hassle out of IRA investing. The robo-advisor manages accounts by constructing portfolios out of low-cost ETFs, with a flat and low-cost fee structure that appeals to investors seeking a hands-off approach. What’s more, the company has built client trust by offering free management on the first $5,000 invested (for NerdWallet readers).

Betterment IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.5.0/5Learn more on Betterment's website Fees 0.25% management fee Account minimum $10 Promotion 1 Year of free management on up to $5,000Our Take Pros Multiple investment options. Robust goal-based tools. Fractional shares mean all your cash is invested. Low management fee. Cons $100,000 minimum and higher fee for access to financial advisors. Why We Like It With its low-cost ETFs, automatic rebalancing, extensive tax strategies and retirement advice, Betterment is a strong bet for retirement investors. Betterment’s planning tools include advice on “asset location” — which types of investments are best for different types of accounts — and investors can sync outside accounts, as well.

E*TRADE Core Portfolios

Ally Invest Robo Portfolios

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.4.5/5Learn more on Ally Invest's website Fees 0.0% with Cash-Enhanced Managed Portfolio; 0.3% otherwise Account minimum $100 Promotion None no promotion available at this timeOur Take Pros Solid investment selection. Integration for Ally bank and brokerage clients. Cons No tax-loss harvesting. Why We Like It Ally Invest Robo Portfolios is best suited to retirement accounts or loyal Ally customers who want to house a managed account, a trading account and their bank accounts under one roof. The lack of tax-loss harvesting will be an issue for investors with taxable brokerage accounts. Want to compare more options? Here are our other top picks:Charles Schwab IRATD Ameritrade IRAAlly Invest IRASchwab Intelligent PortfoliosFidelity Go Note: Some of these promotions won’t apply for first-time depositors, due to IRA contribution limits of $6,000 per year in 2022 and $6,500 in 2023. We’ve included promotions with low deposit requirements where available. Last updated on October 21, 2022

SoFi Checking and Savings

5.0NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.APY2.50% SoFi members with direct deposit can earn up to 2.50% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rates of 2.50% APY (with direct deposit) and 1.20% APY (without direct deposit) are current as of 09/30/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheetWith $0 min. balance for APY Bonus$300 Earn up to $300 with direct deposit. Terms apply.Learn more at SoFi, Member FDIC

Varo Savings Account

LendingClub High-Yield Savings

4.5NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.APY3.12% With $0 min. balance for APYLearn more at LendingClub Bank, Member FDIC

Methodology

NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers and robo-advisors. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity. We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star. For more details about the categories considered when rating providers and our processes, read our full broker ratings methodology and our full robo-advisor ratings methodology To recap our selections...

NerdWallet' s Best IRA Accounts of October 2022

Fidelity IRA: Best for Hands-On InvestorsInteractive Brokers IBKR Lite: Best for Hands-On InvestorsMerrill Edge IRA: Best for Hands-On InvestorsE*TRADE IRA: Best for Hands-On InvestorsSoFi Automated Investing: Best for Hands-Off InvestorsWealthfront IRA: Best for Hands-Off InvestorsBetterment IRA: Best for Hands-Off InvestorsE*TRADE Core Portfolios: Best for Hands-Off InvestorsAlly Invest Robo Portfolios: Best for Hands-Off InvestorsCharles Schwab IRA: Best for Hands-On InvestorsTD Ameritrade IRA: Best for Hands-On InvestorsAlly Invest IRA: Best for Hands-On InvestorsSchwab Intelligent Portfolios: Best for Hands-Off InvestorsFidelity Go: Best for Hands-Off Investors

Frequently asked questions

How do I choose an IRA? Picking the best IRA account will depend a bit on what matters most to you. Below we detail some criteria to keep in mind, but don’t forget that the most important thing is to get started saving for retirement. The sooner you get started, the better off you’ll be. Before decision paralysis slows you down, consider simply opening an account at one of our top picks — we’ve done hours of research already. Here are some important criteria to keep in mind as you pick the best IRA account: Low-cost investments: For long-term retirement-savings success, make sure high fees don’t eat into your investment returns. Open your IRA at a broker or robo-advisor that offers low-cost investments (if you’re thinking of opening your IRA at a bank, check out the FAQ below for more on bank IRAs). For many retirement investors, a smart investment is a low-cost mutual fund. Investing in a handful of mutual funds is an easy way to own a diversified portfolio, because each mutual fund invests in dozens, hundreds or even thousands of companies. With mutual funds, one of the main fees to focus on is the expense ratio. Ideally, you’re investing in mutual funds with an expense ratio of less than about 0.5%. Low fees: While you’re keeping an eye on expense ratios, also keep others fees in mind. If you’re a do-it-yourself investor who plans to open an IRA at a broker, make sure you pick a broker with no trading commissions (or a high number of commission-free ETFs and no-transaction-fee mutual funds) and low transfer and other fees. Investment help: If you want guidance picking investments, a robo-advisor likely is a better choice for you than a broker. All robo-advisors offer either ready-to-go investment portfolios or provide some help picking investments. Customer support: Make sure the broker or robo-advisor offers customer support that meets your needs, whether that’s live chat, telephone support or access to human financial planners.Which bank has the best IRA? You might have noticed we don’t include any bank IRA accounts in our roundup of the best IRAs. Generally, an investment broker or robo-advisor is a better option than a bank for an IRA account, because for a long-term goal like retirement you want to tap into the power of the stock market to grow your money. Bank IRAs generally offer access to savings products such as certificates of deposit. CDs are savings products that guarantee a rate of return as long as you leave your money in for a specific period of time. Historically, stock market returns average about 10% a year. CDs are currently offering about 2% at best. Yes, the stock market comes with the risk that, in any given year, your account may lose value — but investors who leave their money in the market, even through those down days, generally enjoy hefty gains over time. If, despite that, you decide to go with a bank CD, be sure to pick among the IRA accounts with the best IRA CD rates so you know you’re getting the best possible rate of return for that type of account.Can I lose all my money in an IRA? While unlikely, it is possible for an IRA account to lose value and, potentially, drop to zero. That’s much likelier to happen if you invest in a single company stock. The key to sidestepping this risk is to make sure your investments are diversified. That means investing in a variety of companies — of different sizes and in different industries and locations — and in both stocks and bonds. That way, when any one slice of your investments faces trouble, the others are there to keep your overall portfolio on a steady course. The easiest path to a diversified portfolio is with mutual funds and exchange-traded funds. One single fund can invest in thousands of companies, making it a simple one-stop shop for investment diversification.Am I eligible to save on taxes with an IRA? Anyone can open a traditional IRA — there are no income limits — but if you’re also covered by a workplace retirement plan like a 401(k), the amount of your contribution that you can deduct on your tax return may be phased down or eliminated based on your income. If you exceed the income limits, you can still make the maximum annual contribution, but a portion or all of it will be considered a nondeductible contribution. There’s no immediate tax benefit on nondeductible contributions, but you’re still able to defer taxes on investment income until retirement. Read more about the traditional IRA deduction limits. Roth IRAs have income limits for eligibility; if you earn too much, your contribution limit is phased down or eliminated completely. To see if you’re affected, use our Roth IRA calculator.What are the benefits of an IRA? IRA accounts offer significant tax benefits over traditional savings and brokerage accounts. As long as your money stays in an IRA, you’ll owe no tax on your investment earnings — that means you have a bigger nest egg to compound and grow each year. In contrast, with a traditional brokerage account, taxes may eat into your savings every year, depending on how you invest. And if you qualify for a deductible IRA, the benefits are even greater, because you’ll reduce your taxable income for the year you contribute. For example, if your marginal tax rate is 25%, a $6,000 IRA contribution can reduce your tax bill by $1,500. See if you’re eligible for a deductible IRA here.What is the difference between a traditional IRA and a Roth IRA? There are a few differences between these accounts, but the main way they differ has to do with taxes: A traditional IRA earns you a tax deduction on contributions for the year they are made. You’ll then pay income taxes on the distributions you take in retirement. Because you’re delaying taxes until retirement, the investment growth in a traditional IRA is tax-deferred. A Roth IRA offers no tax deduction when you make contributions, but qualified distributions in retirement are not taxed. That makes the investment income in a Roth IRA tax-free — you won’t pay taxes on it at all, so long as you wait until retirement to access it. Generally, a traditional IRA is best if you expect your tax rate to be lower in retirement than it is now — by putting off taxes until retirement, you’ll pay that lower rate. If you expect the opposite to be true — your taxes are lower now and will be higher in retirement — you may want to choose a Roth IRA. For more on this decision, dig into our comprehensive comparison of Roth and traditional IRAs.What is the IRA contribution limit? In 2022, you can contribute up to $6,000 to an IRA each year, or $7,000 if you’re 50 or older. For 2023, the contribution limit increases to $6,500 and $7,500 for those 50 and older. That’s a combined limit shared by the two types of IRA — you can have both a Roth and a traditional IRA, but that maximum limit applies to all of your IRA contributions combined. But the contribution limit doesn’t include amounts rolled over, such as from a 401(k).How easily can I access that money? This is a retirement account, so the money is intended to stay put until age 59½ or later. That said, traditional IRA withdrawal rules are stricter than Roth IRA withdrawal rules: With a traditional IRA, you may be taxed and hit with a 10% early withdrawal penalty if you pull money out before age 59½. There are a few exceptions. With a Roth IRA, you can pull your contributions out at any time — remember, you’ve already paid taxes on them. You may be taxed or penalized on early distributions of investment earnings, however.How do I open an IRA? It’s a simple process: You can open an IRA online, at any broker or robo-advisor (though we’re partial to the ones above, for the reasons we outlined). It takes about 15 minutes and you’ll need to provide some personal information, including your name, birthdate, mailing address and Social Security number. Here’s our guide to opening an IRA, which also includes information about how to fund and invest the account.What do you mean by "invest the account"? Unlike savings accounts, IRAs don’t pay a set interest rate or return. Once you’ve put money into the account, you need to select investments; otherwise, your money will sit in cash, which isn’t ideal for a long-term goal like retirement. Most IRA providers offer a wide range of investment options, including individual stocks, bonds and mutual funds. If that sounds out of your league, you can open your IRA at a robo-advisor which will manage your investments for you for a small fee.

About the author

Alana Benson

Alana Benson is an investing writer who covers socially responsible and ESG investing, financial advice and beginner investing topics. Her work has appeared in The New York Times, The Washington Post, MSN, Yahoo Finance, MarketWatch and others. Read moreEmail

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