After some research, I’ve gathered the best sources for opening Traditional and Roth IRAs below.
*See all the best online stock broker promotions and deals here!
Do you need to know the difference between a Traditional Vs. a Roth IRA first? Read my basics overview on IRAs here.
For many folks, if you think your tax rate will be lower in the future then it makes sense to avoid paying more taxes now by investing in a Traditional IRA, which is eligible for tax deductions.
If your future foretells that your tax rate will increase, the best retirement account for you, if you qualify, is a Roth IRA.
In general, most consider a Roth IRA more beneficial.
Best Places To Open A Roth IRA: Discount Brokers
Options for opening an IRA include discount brokers, full service brokers, and directly through a mutual fund.
You can create a basic portfolio with the follow discount brokerage firms.
Scottrade
As well as being online, Scottrade also had brick-and-mortar locations (more than 500 in the U.S.). This not only gives you access to lower transaction costs, but allows for face-to-face interaction with a real person.
Roth IRA Account Set Up Fees: None
Roth IRA Account Maintenance Fees: None
Minimum Deposit To Open Account: $500
Commissions On Stocks, ETFs And Mutual Funds: $7 per stock or ETF trade, maximum of $17 per mutual fund trade
Scottrade IRA is best for: New investors and those who want a full-service broker with lower commissions
*Special Offer: Open a new account or fund an existing account and get up to a $2,000 cash bonus
E*TRADE
E*TRADE has always been one of the leaders and pioneers in the industry. E*TRADE has physical locations, but only a handful compared to Scottrade. As a online discount brokerage firm, though, they’re one of the best.
Roth IRA Account Set Up Fees: None
Roth IRA Account Maintenance Fees: None
Minimum Deposit To Open Account: $0
Commissions On Stocks, ETFs And Mutual Funds: $9.99 per stock or ETF trade, maximum of $19.99 per mutual fund trade
E*TRADE IRA is best for: Investors who want a variety of products in their IRA, low-frequency traders, and long-term mutual fund investors
*Special offer: Get up to $600 when you open an IRA
TD Ameritrade
TD Ameritrade has roughly four times as many brick-and-mortar locations as E*TRADE, and also is very popular as an online solution as well. Aside from higher than normal fees for mutual funds, they are very competitive with stock and ETF fees. They have all the popular retirement options, but their IRA shines.
Roth IRA Account Set Up Fees: None
Roth IRA Account Maintenance Fees: None
Minimum Deposit To Open Account: $0
Commissions On Stocks, ETFs And Mutual Funds: $9.99 per stock or ETF trade, maximum of $49.99 per mutual fund trade
TD Ameritrade IRA is best for: All levels of experience, those who want to roll over a 401K, and less active investors/traders
*Special Offer: Open an IRA or roll over your old 401k and get up to $600 cash
ShareBuilder
ShareBuilder is owned and operated by Capital One. Their target audience appears to be the beginner investor. Again, fees are in-line with all of the other competitors.
Roth IRA Account Set Up Fees: None
Roth IRA Account Maintenance Fees: None
Minimum Deposit To Open Account: $0
Commissions On Stocks, ETFs And Mutual Funds: $4 per stock/ETF/mutual fund trade if using automatic investment; $7.99 per stock or ETF trade with $12 monthly subscription to ShareBuilder Advantage; $9.99 per stock or ETF trade for ShareBuilder Basic accounts, and $19.95 per mutual fund trade
ShareBuilder IRA is best for: Beginner investors and deal seekers
*Special Offer: Up to a $600 bonus with your opening deposit
OptionsHouse
OptionsHouse specializes in Options, but they are also another good choice for opening a Roth IRA. Fees for trades are very low for stocks and ETFs. Fees for Mutual Funds aren’t too shabby either.
Roth IRA Account Set Up Fees: None
Roth IRA Account Maintenance Fees: None
Minimum Deposit To Open Account: $1,000
Commissions On Stocks, ETFs And Mutual Funds: $3.95 per stock or ETF trade, $9.95 per mutual fund trade
OptionsHouse IRA is best for: Investors looking for low fees who may dab into Options also
*Special Offer: Open an IRA @ OptionsHouse Today and Receive 100 Commission-Free Trades and up to $125 in Transfer Fees!
TradeKing
TradeKing is one of the best options out there if you are looking to trade often within your Roth IRA account as the stock trade commissions are $4.95. This firm as provides low costs for Mutual Funds as well.
Roth IRA Account Set Up Fees: None
Roth IRA Account Maintenance Fees: $50 for accounts with no activity within 12 months that also have a balance of less than $2,500; otherwise $0
Minimum Deposit To Open Account: $0
Commissions On Stocks, ETFs And Mutual Funds: $4.95 per stock or ETF trade, maximum of $9.95 per mutual fund trade
TradeKing IRA is best for: Higher frequency traders, Options traders, self-directed investors and deal seekers
*Special Offer: Open a no-fee TradeKing IRA today
Charles Schwab
Charles Schwab is more of a full-service brokerage firm, but they do have decent commissions on stock and ETFs at $8.95. However, their mutual fund fees are extremely high.
Roth IRA Account Set Up Fees: None
Roth IRA Account Maintenance Fees: None
Minimum Deposit To Open Account: $1,000
Commissions On Stocks, ETFs And Mutual Funds: $8.95 per stock or ETF trade, maximum of $76 per mutual fund trade
Charles Schwab IRA is best for: Investors looking for features of a full-service brokerage firm with decent stock/ETF commissions
Best Places To Open A Roth IRA: Mutual Fund Companies
With discount brokers you have to be wary of Mutual Fund costs. Be careful of the difference between advertised no-transaction fees and no-load mutual funds. No-load funds refer to there being no sales load cost as a percentage of assets on your investment. No-transaction fee means there is no fee to trade in and out of the mutual fund. No-load funds can have transaction fees.
That’s where the advantage of opening your IRA through a Mutual Fund Company comes into play. You can cut out the middleman, the discount broker, by going directly to the Mutual Fund companies themselves. There are a few Mutual Fund Companies that will allow you to open a Roth IRA and I’ve listed them below.
Vanguard
With some of the best low cost index Mutual Funds on the market, Vanguard has always been one of the top choices.
Fees for Roth IRA: $0 (with electronic statements and confirmations; otherwise $20)
Minimum Required Investment: $1,000 for “starter” mutual funds; most other funds $3,000
Minimum Subsequent Investment: Varies, usually between $100 and $1,000 (electronic transactions only have a $1 minimum)
Commissions: If you invest in Vanguard mutual funds only, $0. Commissions vary for mutual funds outside of Vanguard or for ETFs.
T. Rowe Price
T. Rowe Price also has competitive expense ratios for index funds and is another market leader. .
Fees for Roth IRA: $0 (with electronic statements and confirmations; otherwise $20 if your balance is less than $10,000)
Minimum Required Investment: $1,000
Minimum Subsequent Investment: $100
Commissions: If you invest in Fidelity mutual funds only, $0. Commissions vary for mutual funds outside of T. Rowe Price or for ETFs.
Fidelity
Fidelity
The third big player among the Mutual Fund Companies is Fidelity. They have the highest minimum required investment for opening an account at $2,500. Luckily, there is no minimum additional contributions afterwards.
Fees for Roth IRA: $0 for IRAs
Minimum Required Investment: $0 (although most Fidelity mutual funds have a $2,500 investment minimum)
Minimum Subsequent Investment: $0 for Fidelity mutual funds
Commissions: If you invest in Fidelity mutual funds only, $0. Commissions vary for mutual funds outside of Fidelity or for ETFs.
Complete List Of Bank Promotions
If you like this offer, be sure to check out my complete list of all the best bank bonuses and promotions here. You'll find the most popular offers nationally available with the large banks (like the popular Chase coupons), and also a ton of locally available ones with smaller banks and credit unions.