The post Best IRA Accounts of October 2024 by Anna Yen appeared first on Benzinga. Visit Benzinga to get more great content like this.
Benzinga found that the best IRA accounts to open this month are from SoFi or Rocket Dollar.
An Individual Retirement Account (IRA) is a tax-advantaged investment vehicle designed to help individuals save for retirement. It allows contributors to set aside a portion of their income, which can grow tax-deferred until withdrawal during retirement age. There are several types of IRAs, including Traditional IRAs, which offer tax deductions on contributions and tax-deferred growth, and Roth IRAs, where contributions are made with after-tax dollars and funds can be withdrawn tax-free in retirement. The contribution limits, tax treatments, and eligibility requirements differ between these types, making it essential for individuals to choose the right one based on their financial situation and retirement goals.
Ready to save and invest now? Here are Benzinga’s top picks for the best IRA account providers for this month, considering factors like account type, fees, investment options and customer service.
Quick Look at the Best IRA Accounts 2024:
- Best Overall No-Fee IRA Account: SoFi
- Best for Self-Directed Investing: Rocket Dollar
- Best for Tax-Deferred Crypto Investing: Bitcoin IRA
- Best for Low-Cost Crypto IRAs: iTrustCapital
- Best for Traditional Brokerage: Fidelity
- Best for Online Brokerage: E*TRADE
- Best for Beginners: Betterment
- Best for Roth IRA: Vanguard
- Best for Rollover IRA: Charles Schwab
- Best for Robo-Advisor Account: Wealthfront
Table of contents
[Show]
The 10 Best IRA Accounts to Open in October 2024
Benzinga’s top 10 picks cover a diverse range of IRA providers, each offering unique features tailored to satisfy the needs of investors.
1. Best Overall No-Fee IRA Account: SoFi
Get Started
securely through SoFi’s
website
SoFi’s mission is simple: to help reach clients like you reach their financial independence and realize their ambitions. SoFi knows that this independence comes from making decisions that help your money start to work for you in the long run. The brand helps individuals make these decisions through personal financial products such as personal loans, student loans and automated and active investing.
The brand additionally provides in-person experiences such as educational and networking events, personalized guidance from experienced financial planners and one-on-one advising with professional career coaches. SoFi’s services have been highlighted in outlets such as Forbes, Medium, and CNBC’s Make It.
Best For
- IPO Investing
- ETF and Mutual Fund Investors
- No Contract Fees
- Highly-rated mobile app for iPhone and Android
- No account fees; Transfer and Inactivity Fees are easily avoided
- More than most tradable securities included alternative asset funds
- Only available in the U.S.
- Limited selection of research and tools.
SoFi Invest offers Traditional IRA, Roth IRA and Simplified Employee Pension (SEP) IRA where you can invest in various assets without worrying about trading fees, commissions, minimum balances or minimum deposits.
You can choose between SoFi active or automated investing and also get free access to certified financial planners who can assist you with your retirement strategy.
Why We Picked It: SoFi lets you invest for your retirement without paying extra costs. This means that more of your hard-earned money goes directly towards your retirement savings, rather than being eaten up by unnecessary fees.
2. Best for Self-Directed IRA: Rocket Dollar
get started
securely through Rocket Dollar Retirement’s
website
Founded in 2018, Rocket Dollar Inc. offers a product that enables its customers to purchase nontraditional or private investments using their individual retirement accounts (IRAs). Investments such as a real estate investment property, cryptocurrencies, a startup company or another type of alternative investment can be made in your retirement account via Rocket Dollar. Rocket Dollar even lets you make investments on a local level that are personally relevant to you instead of just giving your money to a money manager or investing in a public company’s stock. Rocket Dollar could suit anyone who wants to use their IRA to invest in alternative assets.
Best For
- Experienced investors
- High net-worth individuals
- Self-directed investors
- Use retirement funds for alternative investing
- Invest in more asset classes than competitors
- Both IRAs and 401(k)s are available
- Expedited option for funding a deal quickly
- High one-time setup fee
Rocket Dollar empowers users to open self-directed retirement accounts and invest in a wide range of alternative assets including real estate, cryptocurrency, crowdfunding and private equity.
Rocket Dollar will set up a Limited Liability Company (LLC) or a trust for your account, which directly holds the assets, streamlining the process of setting up and managing a self-directed IRA or solo 401(k) account.
Unlike traditional retirement account providers that charge a percentage of assets under management (AUM), Rocket Dollar’s fees are fixed and do not increase as the value of the account grows. Users pay a one-time setup fee and a flat annual fee that covers custodial services, record-keeping, and account maintenance. This means that users can accurately predict and budget for the fees associated with their self-directed retirement account.
Why We Picked It: Rocket Dollar offers a unique opportunity to diversify your retirement portfolio with off-the-market investments. This allows investors to potentially earn higher returns than they would with more conventional investments like stocks and bonds.
3. Best for Tax-Deferred Crypto Investing: Bitcoin IRA
get started
securely through bitcoinIRA’s
website
Bitcoin IRA provides a solution for those looking to take their retirement account outside the traditional market. It partners with BitGo Trust to facilitate the setup of an individual retirement account (IRA) and a digital wallet to hold and trade cryptocurrency. Bitcoin IRA offers a proprietary always-on, self-directed trading platform that empowers you to invest in your future. In addition to digital currency, you can also use Bitcoin IRA to purchase gold, another popular alternative asset for savvy investors.
Best For
- Large Bitcoin holders
- New Bitcoin investors who have a handle on their overall financial strategy
- People who have room in their budget for a $100 monthly contribution for an easy set-and-forget savings and investment strategy
- Investors who can tolerate high levels of risk associated with trading crypto and who are able to hold precious metals investments for at least 10 years
- Great rollover options
- Investments stored offline for greater security
- Easily create an account and digital wallet in under 3 minutes
- 24/7 trading platform
- Due to U.S law, cannot transfer existing cryptocurrency holdings into a Bitcoin retirement account
- No financial advisory or planning services
Bitcoin IRA enables you to buy and sell cryptocurrencies within a tax-advantaged individual retirement account. It assists you to roll over existing retirement accounts into a crypto IRA and provides options for gold investing.
You’ll also enjoy a user-friendly web and mobile interface, access to over 60 cryptocurrencies and multiple IRA options. While Bitcoin IRA offers self-directed IRAs for cryptocurrency and gold investing, it doesn’t support other alternative assets like silver or real estate.
Why We Picked It: Bitcoin IRA provides a simple way to diversify your retirement savings with crypto and gold while enjoying the tax benefits of an IRA. By diversifying their retirement portfolio with these alternative assets, individuals can potentially benefit from the high returns and growth potential of cryptocurrency, while also hedging against the volatility of traditional markets.
4. Best for Low-Cost Crypto IRAs: iTrustCapital
get started
securely through iTrustCapital’s
website
iTrustCapital is a self-directed IRA provider that gives you the opportunity to invest in cryptocurrencies, gold and silver through your retirement account. iTrustCapital focuses on providing investors with a straightforward and easy-to-understand platform, which can be a major asset if you’ve never bought or sold alternative investments in the past.
When you reach retirement age, iTrustCapital allows you to choose whether you’d like to take your disbursements in cash or in the assets you’ve invested in. Though the platform does offer a limited range of cryptocurrencies when compared to brokers like Coinbase, its simple structure and unique IRA offerings make iTrustCapital a great place to invest.
Best For
- Investors who want to add gold, silver or cryptocurrencies to their IRA
- Those who are interested in taking a long-term approach to cryptocurrency or metal investing
- Beginner cryptocurrency investors
- Straightforward platform allows you to buy and sell assets in a few minutes
- Orders clear within 5 minutes
- 24/7 order placements and portfolio monitoring services
- Both live chat and phone customer service service available
- Limited number of cryptocurrencies to buy and sell
- No mobile app currently available
iTrustCapital allows investors to easily trade and hold cryptocurrencies and precious metals within tax-advantaged IRAs. It boasts a straightforward fee structure, with no account setup or monthly fees.
It stands out for having some of the lowest fees among crypto IRA investing options and is highly regarded by customers.
Why We Picked It: iTrustCapital makes it easy and affordable to include crypto and precious metals in your retirement portfolio. With low fees, a user-friendly interface and top-notch security features, iTrustCapital is a valuable resource for individuals who are looking to expand their investment options.
5. Best for Traditional Brokerage: Fidelity Investments
get started
securely through Fidelity Investments’s
website
Fidelity is a comprehensive and responsive brokerage suitable for both new and experienced traders alike. With complete access to the full U.S. stock and options markets, a set of state-of-the-art education and research tools, as well as a wide fee-free fund selection, Fidelity is equally useful for the veteran swing traders to novices opening their first accounts. Mobile traders will be especially happy with Fidelity’s app, which mirrors full capabilities of the platform. Though there isn’t much to criticize about Fidelity, the broker does have a few areas where it can afford to improve. Margin rates are significantly higher than most other brokers, especially for traders borrowing less than $25,000. It also doesn’t offer any access to the futures markets. Despite these minor flaws, Fidelity remains a strong choice for most investors.
Best For
- Easy-to-navigate yet functional platform strikes the perfect balance between expert tools and comfort for beginners
- Mobile trading app is fully-optimized and mirrors full functionality of the desktop platform
- Wide range of education and research options make learning more about securities and the market easier and less time-consuming
- Complete range of both independent and managed services available at exceptionally affordable prices
- Offers access to both domestic markets and 25 foreign markets, as well as a wide range of options contracts and over 10,000 mutual funds
- Mobile app that is well-integrated and works just as well as the desktop platform
- Wide selection of education tools and resources available free of charge
- Margin rates higher than many other competing brokerages
- No access to futures trading
- High fees for buying a non-Fidelity mutual fund (with over 3,300 fee-free funds available)
Fidelity Investments offers various Individual Retirement Account options, including Traditional IRA, Roth IRA, and Rollover options, to help investors save for retirement with tax advantages. Fidelity’s IRA accounts come with various features, such as no minimum investment requirements for certain funds, competitive fees, and robust research tools to help clients make informed decisions. Additionally, their user-friendly online platform and mobile app provide easy access to account management, making it simpler for investors to monitor performance and adjust strategies as needed.
Why We Picked It: With no account minimums for traditional and Roth IRAs, investors can get started easily and affordably.
get started
securely through eTrade’s
website
Boasting one of the best mobile brokerage platforms on the market and a competitive fee structure, Power E*TRADE is a popular platform for options and futures trading, especially among high frequency traders. It boasts intuitive tools and beginner-friendly options for active traders and investors.
Best For
- High frequency traders who execute more than 30 options trades per quarter
- Investors who want to be able to trade via their phone or tablet
- Among the most advanced mobile apps, complete with a customizable dashboard
- Lower fees and margin rates for frequent traders
- Prebuilt portfolios, preset scans and automation tools that are great for passive investors and new investors.
- Fees are higher for less frequent traders
- Forex and international markets are not available
get started
securely through Betterment’s
website
Betterment is a smart robo-money manager that helps you save, invest and even spend your money. It has more than 500,000 registered customers and manages over $21 billion in assets. As a fiduciary, Betterment is committed to act in your best interest at all times. The investing platform lets you manage your money, guide your investments and plan your retirement at your convenience.
Best For
- Investors with defined financial goals
- People who are new to investing
- Passive investors who want to diversify their portfolio
- Investors who want to invest heavily in ETFs
- Investors looking for low-cost investment options
- Investors looking to plan their retirement
- Can open an account with a $0 minimum balance
- Offers goal-based investing
- Charges low annual management fees
- Offers a wide range of stocks and ETFs
- Provides access to advanced investing tools
- Provides personalized financial advice plans
- Charges a high fee for personalized financial advice comparatively
- Not suitable for day traders and short-term investors
- Does not offer any real estate stocks, commodities and foreign exchange
get started
securely through Vanguard’s
website
Vanguard was the first to offer low-commission trading on inexpensive index funds based on consumer-friendly investment principles. Day traders might not find Vanguard’s old-school style appealing, but retirement savers, buy-and-hold investors and companies that seek employer-sponsored programs might want to take a gander. Vanguard is a sensible choice for common-sense investment advice and efficient products. It’s a company that sticks to the morals of its hardy pioneer, Jack Bogle.
Best For
- Retirement savers
- Buy-and-hold investors
- Investors looking for a simple stock trading platform
- Large family of inexpensive ETFs and mutual funds
- Strong stock research selections
- Non-intimidating platform and mobile app
- Only 10 technical indicators available for charts
- No futures or forex trading
- Not ideal for day traders
get started
securely through Charles Schwab’s
website
Charles Schwab is one of the longest-standing private brokerages in America, with a history of personalized TV ads and boutique-style service. Today Schwab offers a range of investment services, including retirement planning and investing.
Best For
- Holistic approach to retirement savings
- Boutique-style service
- Long track record of success
- Quality customer care
- Branches around the country
- Several retirement investing options
- You may not have access to a branch or wish to pursue other options
get started
securely through Wealthfront’s
website
Wealthfront is an integrated wealth-building platform. It brings long-established investment strategy and state-of-the-art financial planning and investment management technology together to simplify the science of money-making.
You can bank, invest, borrow and plan from the convenience of your smartphone. Wealthfront optimizes every deposit to help you make more money from every account.
Best For
- Long-term investors
- Anyone who wants to manage their financial control panel from a smartphone
- Investors with enough capital to get the full benefit of Wealthfront technology
- All-in-1 digital financial management
- Money intuitively diverted to your various checking, investment and savings accounts by priority and financial need
- Low fee or fee-free accounts
- No direct relationship with a human advisor
- Not best for those who can’t keep much money in their banking and investing accounts
What Is an IRA?
An individual retirement account (IRA) is a special type of savings account designed to help you save for retirement while offering certain tax advantages. Its primary goal is to help your money grow over time, providing a source of income during your golden years.
Contributing to a traditional IRA may qualify you for tax deductions, depending on your income and eligibility. The money invested in a traditional IRA grows tax-deferred, meaning you only pay taxes on your investment earnings when you withdraw them in retirement. This tax deferral allows your money to compound faster compared to a taxable account.
Benefits of an IRA
- Contributions to a Traditional IRA are tax-deductible, leading to annual tax savings. The money in the IRA grows tax-deferred until withdrawals are made in retirement.
- IRAs enable investment in various assets to protect retirement savings from market changes and maintain a balanced portfolio.
- Contributing to an IRA can help build a substantial retirement savings through the power of compound interest, especially when started early and contributed to consistently.
- IRAs offer flexibility in fund access. For Traditional IRAs, penalty-free withdrawals start at 59 ½.
- IRAs can be part of your estate planning by naming beneficiaries who can inherit the funds. This is a way to ensure your loved ones are taken care of and benefit from your savings.
- IRAs are protected by the Federal Deposit Insurance Corporation (FDIC), which insures deposits up to $250,000 at member banks and savings associations in case of financial institution failure.
Which Type of IRA is Best?
Contributing to an IRA is an important step in securing your financial future, so it’s essential to select the best option available. Here are the three common types of IRAs you can choose from.
- Traditional IRA: This retirement account lets you contribute money before taxes and delay paying taxes until you retire. Depending on your income and if you have a retirement plan at work, you might deduct your contributions from your taxable income.
- Roth IRA: With a Roth IRA, you contribute money after taxes and withdraw it tax-free in retirement. While you won’t receive a tax deduction for your contributions, you also won’t pay taxes on your investment earnings or distributions.
- Rollover IRA: A rollover IRA is a method of moving funds from another retirement account, like a 401(k) or 403(b), to an IRA. It helps consolidate your retirement savings and gives you greater control over investment choices.
Is a Roth IRA Better Than a Traditional IRA?
Choosing between a Roth IRA vs. traditional IRA depends on your current and future income tax rates and personal preferences.
- A Roth IRA lets you contribute post-tax dollars and withdraw them tax-free in retirement. This feature is helpful if you expect to be in a higher tax bracket when you retire or want flexibility with withdrawals.
- A traditional IRA allows you to contribute pre-tax dollars, reducing your current tax bill. However, you’ll pay taxes on withdrawals in retirement. It’s advantageous if you expect to be in a lower tax bracket when you retire or want to lower your adjusted gross income (AGI) to reduce taxes.
Both types offer tax-deferred growth of investments but with different withdrawal rules. Roth IRAs have no required minimum distributions (RMDs), allowing you to keep money in the account indefinitely or pass it to heirs tax-free. Traditional IRAs have RMDs starting at age 72 (73 if you reach age 72 after Dec. 31, 2022), requiring you to withdraw a certain percentage annually and pay taxes on it.
How Do I Choose an IRA Account?
When choosing an IRA account, consider these factors.
- Account type: Decide between a traditional IRA, a Roth IRA and others based on your tax situation and preferences.
- Contribution limits: The Internal Revenue Service (IRS) sets annual limits on IRA contributions. For 2023, it was $6,500 ($7,500 for those 50 and older). In 2024, the limit increases to $7,000 ($8,000 for those 50 and older). These limits apply to all your IRA accounts combined.
- Investment options: Look for an IRA provider offering a variety of low-cost investment options like index funds, ETFs, stocks and bonds. Ensure they provide tools and resources for portfolio management, such as robo-advisors, financial planners and research materials.
- Fees and expenses: Seek providers with low or no commissions, account fees, transfer fees and management fees. Pay attention to fund expense ratios, ideally aiming for less than 0.5%.
- Customer service: Choose an IRA provider with customer service options that suit your preferences, whether it’s live chat, phone support or email. Check its reputation through customer reviews, ratings, awards and complaints to ensure satisfactory service.
How to Open an IRA Account
To open an IRA account, follow these steps:
- Choose between a traditional IRA or Roth IRA based on tax treatment.
- Compare IRA providers.
- Check minimum balance requirements before opening an account.
- Start investing in stocks and bonds once the account is open and the minimum balance is met.
When Should You Open an IRA?
This will vary depending on your individual financial situation and retirement goals. But one of the best times to open an IRA is as soon as you start earning income. The earlier you start saving for retirement, the more time your investments have to grow. Even if you can only contribute a small amount each month, starting early can make a significant impact on your retirement savings over time.
Can I Switch my IRA?
Yes, you can switch your individual retirement account to a new provider without penalty, but it must be to the same type of account. This process is called an IRA transfer and here’s how to do it:
- Contact the new provider and give them your details.
- Fill out any necessary forms they provide.
- Wait for the transfer to finish, which might take a while.
- Check your new IRA to make sure the money is there.
A Comprehensive Guide to IRAs
Whether you opt for a traditional or Roth IRA, choosing the right individual retirement account involves looking out for low fees, diverse investment choices and reliable customer support. Opening an IRA is straightforward — select a provider and meet minimum balance requirements and you’re good to go. Remember, planning for retirement wisely now can lead to financial security later on.
Frequently Asked Questions
Who has the highest interest rate on IRA?
The interest rates on IRA accounts can vary depending on the financial institution. The best IRA rates (IRA CDs) typically range from 2% to 5.40% APY (Annual Percentage Yield).
Answer Link
What is better than an IRA account?
There isn’t a single best retirement account, as various alternatives have advantages and drawbacks depending on your circumstances. However, some alternative investment options to consider include certificate of deposit (CD), Treasury securities and taxable investment accounts.
Answer Link
What is the best IRA to avoid taxes?
The best IRA to avoid taxes would be a Roth IRA. With a Roth IRA, contributions are made after taxes, so withdrawals in retirement are tax-free. This can be advantageous for individuals who anticipate being in a higher tax bracket during retirement. Traditional IRAs, on the other hand, allow for tax-deferred contributions, but withdrawals are taxed as ordinary income in retirement.
Answer Link
The post Best IRA Accounts of October 2024 by Anna Yen appeared first on Benzinga. Visit Benzinga to get more great content like this.