IRAs offer all the tax advantages of a 401(k) with more flexibility to invest how you want to, making them one of the best ways to save for retirement. But to get started investing in everything from stocks to funds, you'll need to open an IRA account at a brokerage to start making trades.
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Let's review how one of the largest discount brokers,TD Ameritrade, stacks up on features that are especially important to IRA investors.
Commission prices by investment
As commission prices decline across the industry, the differences in trading costs is becoming less important. TD Ameritrade's pricing is within the range of most online discount brokers, as its commission prices start at under $10 for most transaction types.
Data source: company website.
Like many brokers, TD Ameritrade offers a number of ways to reduce your true trading cost. Thanks to special offers for opening an account, you may qualify for commission-free trades and cash bonuses, which act as an effective discount. Likewise, many brokers have long lists of commission-free funds that you can buy or sell without paying a commission.
Mutual fund selection and commission-free choices
TD Ameritrade shines in fund selection, offering thousands of funds to choose from, many of which are completely free of any trading costs (commissions, loads, or transaction fees). Here's how its fund selection stacks up by type of fund.
Data source: company.
Some popular brokerages offer only 1,000 mutual funds in total, so TD Ameritrade's vast selection of funds may be more of an advantage than investors think.
Minimum deposit requirement for IRAs
TD Ameritrade doesn't require investors to make a minimum initial deposit when opening an IRA account. That said, many mutual funds have their own minimum investment requirements. Stock and ETF investors can get started for less, asyou simply need to be able to afford a single share and pay any commissions to make an investment.
TD Ameritrade's no-minimum account policy makes it possible to start small. Image source: Getty Images.
International stocks and ADR investments
TD Ameritrade clients can invest in foreign companies via ADRs, mutual funds, and ETFs, but it doesn't allow for clients to trade directly on foreign markets. In fairness, only a handful of brokerages offer access to international markets.
Data source: company.
Many of the largest foreign companies have ADRs listed in the United States, making them available for trading on TD Ameritrade's platform. However, ADRs are less common for small and mid-cap stocks. If you prefer to get your foreign stock exposure from funds rather than individual stocks, you shouldn't have any difficulty finding a great foreign stock mutual fund or ETF on its platform.
TD Ameritrade allows you to make a trade with mobile phones or tablets. Here's how its users and customers rated its app, as of Jan. 18, 2017.
Data source: relevant app stores.
IRA account fees
Occasionally, discount brokers charge an administration fee, maintenance fee, and/or inactivity fee for people who trade infrequently or maintain smaller account balances. TD Ameritrade isn't one of them, making it a good choice for all accounts, large or small, active or inactive.
Clients of TD Ameritrade will find a full library of research material at their disposal. The company provides access to third-party insights from S&P Capital IQ, Morningstar, Moody's, and others. And when it comes to retirement planning, it has a long line-up of tools that focus on its clients' retirement needs. For example, TD Ameritrade's Portfolio Planner tool helps you score your current portfolio against your goals, to see whether you're ahead of the game or falling behind on your savings.
We've just touched on a few of the research and retirement tools that TD Ameritrade has to offer. Truly, depending on your needs, it's likely that you'll find plenty that is relevant to how you invest.
Is a TD Ameritrade IRA right for you?
TD Ameritrade has a lot to offer investors in research, accessible account sizes, and no-fee IRAs (Roth or traditional). It also has one of the lengthiest lists of mutual funds and commission-free ETFs. That said, while fund investors might love its no-fee choices, investors who trade stocks or options frequently might find that its commissions are higher than other brokerages.
To be clear: The Motley Fool does not endorse any particular brokerage, but we can help you find one that is a good fit for you. Visit Fool.com's IRA Center to compare leading discount brokers and see if you qualify for a special offer just for opening an account.
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