4.5-star brokerage firm rating

TD Ameritrade is one of the most recognizable names in the financial sector, and it has been an award-winning online brokerage for the past 7 years. It bought another brokerage giant - Scottrade. As a result, TD Ameritrade has become one of the largest online brokerages with over to 10 million customer accounts holding assets totaling over $1 trillion.

There are several IRA choices at TD Ameritrade. These include Roth, Traditional, SIMPLE, SEP, Rollover, and Minor (in both Roth and Traditional formats). The broker does not charge any fees for a retirement account. There are no setup, closeout, annual, maintenance, inactivity, or low-balance fees at this top rated IRA account. There is also no required minimum deposit to open an IRA.

The broker's website has good educational information on saving for retirement. There are articles and videos that cover a wide range of topics. These include annuities, rolling over a 401(k), and withdrawals from an IRA. Calculators on the TD Ameritrade website help investors see the advantages and potential disadvantages of converting a Traditional IRA to a Roth, determine when distributions must be taken from an IRA, and whether converting a 401(k) to an IRA is a good idea.


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Retirement savers who are looking for some securities to invest in should check out TD Ameritrade's large selection of mutual funds. This top rated IRA brokerage firm provides over 13,000 funds. Over 2,000 of these are no-load, no-transaction-fee products. The funds are easy to find using the website's mutual fund screener. It can search by many different criteria, including asset class, Morningstar style box, portfolio turnover rate, category rank, and total assets.

The broker offers ALL(!) ETF's for free. Many of these funds have expense ratios below 0.50%. With such low annual costs, these products are perfect for long-term investors.

An account with TD Ameritrade can have checks and a Visa debit card added free of charge. The debit card can be used at any ATM in the United States without incurring transaction costs, because the broker reimburses any fees charged. TD Ameritrade clients who would like some in-person service will benefit from the firm's 450+ branch locations.

Professional investment advice is also available for clients who need some financial guidance. This service costs extra, but would likely benefit investors who want help planning for their future.

Read full TD Ameritrade IRA Review.

TD Ameritrade promotion: $0 commission stocks/ETFs + get up to $600 cash.

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Ally Invest rating

Ally Invest offers a selection of Individual Retirement Accounts, including Roth, Traditional, SEP, SIMPLE, and Rollover accounts. The broker also provides the Coverdell Education Savings Account, which is ideal for parents who are trying to save for their children's education. An account at Ally Invest has no annual, inactivity or setup fees.

More than 8,500 mutual funds are available on the Ally Invest website. No-load funds cost $9.95 to buy and sell, while load funds have no transaction fees. The broker's screener makes searching through these funds easy. Many different criteria can be selected, such as total return, expense ratio, dividend yield, and Sharpe ratio. Lipper ratings are available on a fund's profile page free of charge.


Ally Invest Mutual Funds Screener


Ally Invest customers also have access to a large selection of debt offerings. The firm's bond screener can narrow down thousands of debt offerings using variables like maturity, coupon rate, yield, and payment frequency. Income-paying bonds could be a good addition to a retirement account.

Investors who prefer to trade stocks and ETF's pay $0. A well-designed web-based trading platform is available free of charge. Long-term investors will benefit from the broker's low commissions and fees, which help reduce lifetime costs.

Investors who would like some help managing their investment accounts should check out Ally Invest Cash-Enhanced Managed Portfolios . For 0.00% of a portfolio's value, the broker will choose a selection of low-cost index funds to invest in. The portfolio is automatically managed by a software program and makes adjustments. Even better, commissions are waived with this service.

Read full Ally Invest IRA Review.

Ally Invest promotion: Up to $3,500 cash bonus + free trades.

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Overview of IRA Brokerage Companies

When grading online retirement companies there are several important variables that should be considered. Which issues are chosen could affect the outcome of the analysis significantly because some brokers differ widely from other firms only on certain issues.

Customer Service

One of the most important characteristics that must be analyzed when looking at online investing firms is customer service. This issue cannot be underestimated because investors oftentimes need assistance from their broker. Levels of service vary widely from one brokerage house to another. For example, some firms provide 24/7 service, while others take a break at night, while still more skip the weekend, and some, like Robinhood, only provide customer support during market hours.

Besides phone support, brokers differ in this category in other ways. For instance, some broker-dealers have on-line chat support, which many traders like. But not all companies have this feature. Still other brokers have brick-and-mortar locations for in-person service. Besides the traditional firms like Raymond James and Edward Jones, some online discount firms also have branch locations—companies like Fidelity and E*Trade.

Trading Technology

For self-directed accounts, trading technology is an important issue to consider, and it's even more important for stock and ETF traders. Because mutual funds trade intra-day, trading tools will be less important here; although some brokers don't have mobile apps that can trade mutual funds, while others do.

Some brokers, like TradeStation, have advanced desktop programs that are capable of some very sophisticated tasks, including research, backtesting, and charting. Other firms have no desktop platform at all. Building a software program that functions well can be expensive, so brokerage houses often have account minimums or trading requirements to use their platforms. Requirements can vary, so looking at what a broker requires and comparing it to its competitors is a good idea.

Fund Availability

When comparing broker-dealers, another category to pay close attention to is the funds that can be traded. A lot of variation exists here. Some brokers will advertise all their no-load, no-transaction-fee funds, but what they don't tell you is that they don't have a lot of total funds. Other brokers have small selections in both categories, and yet still, some firms don't offer mutual funds at all.

Hidden charges exist with mutual fund trading. Some brokers will charge a short-term redemption fee for selling an NTF fund in less than a certain amount of time, such as 30 or 90 days. This fee can vary significantly from one firm to another, from $0 to $49.95 or even higher.

Transaction fees for mutual funds can also vary widely. Some brokers may charge just $10, while other firms can be as high as $49.99 on the buy side.

Research and Educational Materials

This is an often overlooked area, but very important for beginners; and research tools can also be vital even for seasoned pros. Brokers like E*Trade provide many learning materials in multiple formats that novices can use to learn the ropes. Other brokers, such as Ally Invest, provide fewer resources to teach new traders.

Researching securities to buy can be a different experience, depending on which broker you're using. Fidelity, for instance, provides many stock reports from several independent analysts. All of these are free of charge. Other online investing companies may provide just one stock report from one analyst or no reports at all.

Costs

Here we come to the all-important category: how much does it cost to trade at a particular firm? Like the other categories, this one varies widely as well, especially when looking at multiple securities and account types. Some brokers charge an annual account fee, while others do not. Some firms charge IRA fees, including annual or closeout fees, while other broker-dealers have eliminated them. The difference can be significant, with fees ranging between $0 up to $100 or even more.

Commissions on trades must also be considered. Active traders especially need to take this issue into account when analyzing brokers. A small difference can really add up at the end of the year. Stock and ETF trades can range from $0 to $8.95 nowadays in the discount industry. Traditional firms can be as high as $20.

Alternative Investments

Not all brokers offer a wide selection of assets for trading. Robinhood, for example, only provides stocks and ETF's. Option contracts are not available, nor are bonds or mutual funds. Capital One Investing, while it's owned by a well-known financial institution, does not offer bonds.

A few securities firms provide access to the forex and futures markets, but most do not. Knowing what products you want to trade before opening an account can be very helpful. Brokers usually act as dealers for many bond traders, meaning that they trade with their clients. Large firms will have bigger selections of debt than small brokers.

Financial Advice

More brokers today are offering investment advice and portfolio management, but the level and quality vary quite a bit. Some online brokerage companies provide only traditional human management—these are firms like Merrill Lynch. Other companies, such as Wealthfront, have only a robo advisor; while others, like Fidelity, provide both. Robo advisors only buy and sell securities, usually just low-cost ETF's; while human advisors can do much more.

Fees for portfolio management definitely need to be taken into account because they can vary substantially. Schwab, for example, charges nothing for its robo service, while brick-and-mortar firms may charge over 2% of assets for its traditional management. Of course, the level of service provided typically is very minimal at the bottom price range.

Summary

Grading online investing companies isn't overly complex, but it's important to have all the facts before issuing a rating. Wide variation exists in pretty much all categories, so a comparative analysis can help separate the winners from the losers.


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Best No-Fee IRA reviewed by TopRatedFirms.com. Rating: 4.5