Best Overall: Equity Trust
Equity Trust is one of the largest stock market investment companies in the world. Founded in 1970, the company specializes in providing individualized advice to clients. Through its network of over 400 financial advisors, Equity Trust helps people build long-term wealth. In addition to offering traditional brokerage accounts, the company also offers exchange-traded funds (ETFs). This allows customers to diversify their portfolios without having to buy each individual security.
The firm is known for its high-quality customer service. Clients are able to access their account information online 24/7. Advisors are available to answer questions and provide guidance throughout the day. The company prides itself on being accessible and responsive to its clients.
The best audit protection: IRA Financial
Setting up an SDIRA can be complicated, but it offers many advantages over other financial institutions. IRA Financial is one of the few companies offering an SDIRA. This type of account lets you hold investments like stocks, bonds, real estate, gold, silver, and cryptocurrency. You can use funds to pay off debt, save for college, buy a home, or plan for retirement.
The firm offers a variety of investment choices and allows you to invest in cryptocurrencies such as Bitcoin and Ethereum. Its checkbook IRA provides more freedom than traditional IRAs because it gives you access to cash without having to sell securities. You can withdraw money anytime and even borrow against your assets.
IRAF offers educational resources and tools to help investors understand how to best prepare for retirement. Clients receive personalized advice and guidance every step of the way. They can contact Ira via phone, chat or email.
Best for investing in real estate: uDirect IRA
uDirect IRA specializes in SDIRAs. This means that you can invest in real estate without opening a traditional brokerage account. Instead, you can use a self-directed IRA to buy property.
uDirect IRA gets its name because it was founded by an expert in real estate investment. He wanted to make sure that people could easily invest in real estate without having to deal with the complexities of setting up a traditional brokerage account.
uDirect IRA charges a $50 account set-up fee and $275 per year for record-keeping and reporting. However, its first six transactions are completely free.
uDirect IRA does charge $35 transaction fees, though its first six transactions are waived.
Best Internet Site: The Entrust Group
Entrust is a leading provider in providing software solutions to the retirement industry. Their products include the Retirement Income Advisor® (RIA), Retirement Income Planner®, and Retirement Planning Toolbox™. They provide clients with a variety of tools to help manage their finances including portfolio management, tax planning, asset allocation, investment advice, and much more.
The Entrust Group offers its client base a wide range of options for managing their money. From checking accounts to retirement plans, they offer a solution for every stage of life. Their product offerings are designed to make it easy for people to plan for their future without having to worry about
Best Investor Experience: Alto IRA
Alto IRA is a technology platform that makes investing in alternative assets simple and fast. We offer low fees and a straightforward, automated process of investing that allows investors to invest in multiple asset classes without having to manage many different accounts. Our goal is to provide a great customer experience, while still offering competitive pricing.
Recommended for Larger Portfolios: Rocket Dollar
Rocket Dollar is a new player offering a flat fee structure and automatic investment options for small investors looking to diversify their portfolios. Rocket Dollar is designed specifically to meet the needs of larger portfolios where it is difficult to manage multiple accounts manually.
The firm launched earlier this month and already has over $1 billion under management. In addition to the flat fee structure, Rocket Dollar offers automatic investing options and access to free educational resources.
What Is a Self-Directed IRA?
A self-directed IRA is a special kind of retirement plan where you decide what to put into it. You are responsible for managing the investments yourself. If you want to do something different, such as investing in real estate, stocks, bonds, cryptocurrencies, etc., you can. However, there are risks involved.
The IRS requires that you follow certain rules to make sure you don’t run afoul of the law. For example, you must keep detailed records of your account activity. This includes keeping track of purchases, sales, dividends, interest, and withdrawals. You must file annual reports with the IRS. And, you cannot touch your money without getting approval from the IRS.
You can open an IRA online with a brokerage firm like Vanguard. But, you might consider opening one with an independent financial advisor. They’ll help you set up the proper structure for your investment strategy, including how much risk you’re willing to take. Then, they’ll manage your portfolio for you.
What Does a Self-Directed IRA Cost?
Self-directed IRAs are great options for those looking to invest outside of traditional retirement plans like 401(k)s and Roth IRAs. They offer many benefits, including tax advantages and flexibility. However, self-directed IRAs come with some costs that you might not know about. Here we break down what it costs to open a self-directed IRA account, and how much money you could save each month.
The setup fee is one of the most important aspects of opening a self-directed IRA because it determines how much you pay each month. A good rule of thumb is to look for a custodian that charges no setup fee. This way, you won’t have to worry about paying anything extra every month. Many custodians charge a one-time setup fee ranging anywhere from $0 to $1000. If you’re considering investing in a self-directed IRA, make sure to check out our best self-directed IRA accounts list to find the lowest cost option.
Annual Administrative Fee
Another important aspect of setting up a self-directed IRA is understanding the annual administrative fee. Most custodians charge a monthly fee based on the total value of assets held in the account. For example, if you have $100,000 worth of investments in your portfolio, you’ll likely pay around $10/month. Other custodians charge a yearly fee that varies depending on the size of your investment portfolio. You can learn more about the different types of fees here.
Finally, there’s the transaction fee. While this isn’t technically part of the setup process, it’s something to keep in mind when choosing a custodian. Transaction fees range widely, from $0 to $25 per transaction. If you plan on making frequent transactions, such as buying and selling stocks, you’ll want to choose a custodian that offers low transaction fees. Otherwise, you may end up spending more than necessary just to buy and sell shares.
Who Should Get a Self-Directed IRA?
An SDIRA is perfect if you want to invest without worrying about taxes or fees. If you don’t qualify for an employer retirement plan, it’s worth considering whether a self-directed IRA makes sense for you. You’ll pay lower fees and receive better tax benefits. And, unlike traditional IRAs, you won’t have to wait until age 59½ to start taking distributions.
Self-directed IRAs are great options for investors who want higher returns and less risk. They allow you to choose investments based on your personal goals and financial situation. As long as you meet certain requirements, you can put money into stocks, bonds, real estate, annuities, and even venture capital funds.
A self-directed IRA isn’t for everyone. But if you’re interested in investing outside of 401(k) plans, it could be a good option for you.
How We Selected the Top Self-Directed IRA Providers
We looked at 12 SDIra custodian companies and chose three of them for each of the following categories:
1. Best Custodians for Individual Investors
2. Best Custodians For Small Businesses
3. Best Custodians With High Fees
4. Best Custodians with Low Fees
5. Best Custodians Based in the United States
6. Best Custodians Offering Hybrid Accounts
Frequently Asked Questions
What Are the Risks of a Self-Directed IRA Custodian?
The Securities and Exchange Commission (the SEC) recently issued an investor advisory warning about fraudulent investment opportunities involving self-directed retirement accounts. These types of accounts allow investors to choose their own investment options within certain guidelines. Investors are responsible for choosing the best option for themselves. However, some products purport to offer protection from loss, while others suggest specific investment choices. In either case, it is important to understand what you are getting into.
Self-directed IRA custodians do not verify the legitimacy of investments or make sure that claims are accurate. They do not provide the level of protection that, say, Fiduciary or Transamerica provides their clients. Instead, they simply act as a middleman between you and your broker/investment adviser. As such, they do not hold you accountable for anything. So, even though you chose the custodian, you still bear responsibility for how well your money does.
In addition, there are no requirements that ensure that self-directed IRA custodian is approved by the Internal Revenue Service (IRS). There are no rules that require them to check whether brokers/advisers are registered with the IRS. And there are no safeguards that prevent scam artists from claiming to be IRS-approved.
So, beware of anyone promising to vet your investments or to protect you from losses. If someone tells you otherwise, ask questions and find out where they stand.
Can I rollover or transfer my existing retirement account to a self-directed IRA?
The rules governing when you can move money out of one type of retirement plan into another vary depending on whether it’s a traditional IRA, Roth IRA, SEP IRA or SIMPLE IRA. You may be able to do so immediately, but there may be penalties if you take too long or make a mistake. Here are some important things to know about rolling over your retirement accounts:
• When you roll over an IRA, you generally must begin contributing to the new IRA within 60 days of making the contribution to the old IRA. If you don’t start contributing within that window, you’ll owe taxes and possibly fees on the amount you didn’t contribute.
• You can roll over up to $5,500 per person ($6,500 if married filing jointly). But keep in mind that the IRS allows taxpayers to deduct contributions to a traditional IRA, including those made during 2017, even though they weren’t rolled over. So if you’re rolling over a tax-advantaged account, consider setting aside enough to cover both the initial contribution and any additional amounts you want to add.
• There are no limits on how much you can roll over into a Roth IRA, but you can’t withdraw the money without paying a 10% penalty.
• For a SEP IRA, you can transfer up to $50,000 per individual ($100,000 if married filing jointly), but you won’t be able to contribute to the new account. And if you try to transfer more than 50%, you could face a 10% early withdrawal penalty.
• A SIMPLE IRA lets you choose either a traditional or Roth option. In addition, you can transfer up $10,000 per individual ($20,000 if married filing joint) and still avoid the early withdrawal penalty.