If you are leaving your current job and don’t want to have an orphan 401k, or if you just want to switch from a 401k to an IRA, opening a rollover IRA will allow you to transfer funds from your old retirement account seamlessly into a new IRA account.
Many different brokers offer rollover IRAs, so before you choose a provider, compare the fees, requirements and account offers each one provides. Check out this comparison of the best IRA accounts to decide which 401k rollover option is right for you.
Click here to learn what a 401k rollover is.
What Is a Rollover IRA?
A rollover IRA is an account that allows you to move funds from your old employer-sponsored retirement plan into an IRA. With an IRA rollover, you can preserve the tax-deferred status of your retirement assets without paying current taxes or early withdrawal penalties at the time of transfer. A rollover IRA can provide a wider range of investment choices — including stocks, bonds, CDs, ETFs and mutual funds — that might meet your goals and risk tolerance.
Here’s a look at some of the best IRA brokerages:
|Best IRA Brokerages|
|Broker||Trade Commission||Min. Deposit/Balance||Fees||Promotion/Bonus|
|Charles Schwab||$0||$1,000||$0 in opening and maintenance fees
Options trading: $4.95 + $0.65 per contract
|500 commission-free online equity and options trades good for two years|
|TD Ameritrade||$0||$0||$0 annual fee
No platform fees
|Up to $600 cash bonus for opening an IRA|
|E*TRADE||$0||$0||$0 annual fee
Options trading: $4.95 + $0.65 per contract
|Up to $600 plus 60 days of commission-free trades for deposits and transfers of $10,000 or more|
|Fidelity||$0||$0||$0 annual fee
$50 account closeout fee might apply
|Merrill Edge||$2.95||$0||$0 annual fee||Up to $600 bonus when you open and fund a new investment account|
|Information is accurate as of July 12, 2018.|
Charles Schwab does not charge for opening or maintenance fees. You’ll have access to a Schwab Rollover consultant to help you with the process, including assistance with the necessary paperwork, help transferring your assets from start to finish, and expert guidance on selecting the right investment option for you.
You’ll also have access to Schwab’s Trade Source, the portfolio tracker that helps you monitor the market, find trade ideas and place trades. Investors interested in advanced trading can use Charles Schwab’s customizable trading platform, StreetSmart Edge.
As a bonus, customers opening a rollover IRA with Charles Schwab will get 500 commission-free online equity and options trades, good for two years.
Best For: Someone who wants guidance throughout the rollover process; expert investors who want access to advanced trading platformsPros: Among lowest trade commission of all the best providers at $0; no opening or maintenance feesCons: High minimum deposit balance of $1,000
Read This: The Best Roth IRA Accounts
With TD Ameritrade’s 401k fee analyzer tool powered by FeeX, you can see how much you’re currently paying in fees on your old 401k and get help determining if a rollover is right for you.
Learn: The Best IRA Accounts
People opening a Rollover IRA with TD Ameritrade will have access to the broker’s full suite of investment tools including Market Edge, which provides analyst reports, ETF Market Center, stocks overview and stocks charts, and the Premier List, which identifies top-pick mutual funds available only to TD Ameritrade clients. Plus, you can invest in your choice of over 250 ETFs with no commission fees.
Right now, you can get up to $600 in cash if you open up a Rollover IRA with TD Ameritrade.
Best For: Independent investors who want access to top-of-the-line research toolsPros: No minimum deposit or balance required; no annual fee; no platform fees
E-Trade provides its rollover IRA clients with access to a full range of investment choices; objective research, data and analysis; and access to courses, webinars, articles and news on the latest happenings in the markets.
If you roll over $10,000 or more into an IRA with E-Trade, you’ll get up to $600, plus 60 days of commission-free trades.
Best For: Novice investors who want to learn more about the markets; experienced investors who want access to advanced research and data toolsPros: No minimum deposit or balance required; no annual feeCons: Rollover generally takes four to six weeks to complete
Learn: The Best 401k Companies
Fidelity offers three levels of rollover IRAs with varying levels of assistance. With a standard rollover IRA, you choose the investments yourself. You’ll pay no minimum investment and no management costs, but there are trading fees. With a Fidelity Go Rollover IRA, you’ll get a professionally managed and re-balanced portfolio that you can monitor online. This account has a $10 minimum investment, and you’ll pay a 0.35 percent annual program advisory fee. If you want help from a dedicated team, you can opt for the Fidelity Portfolio Advisory Service to receive professional investment management and a team to guide you. This option requires a $50,000 minimum investment, and you’ll pay a 0.60 percent to 1.7 percent annual program advisory fee.
Best For: All levels of investorsPros: No minimum deposit or balance required; no annual fee; lowest trade commission of all the best providersCons: $50 account closeout fee might apply
Opening a Merrill Edge rollover IRA gives you access to the Merrill Edge mobile trading app, which allows you to trade stocks, ETFs, mutual funds and options; review open orders; and check balances and holdings, including pending and past transactions. Plus, self-directed investing is made simple with Merrill Edge Select ETFs.
If you are a Bank of America customer, you can conveniently view and instantly transfer funds between your Merrill Edge investing account and Bank of America banking accounts.
As a bonus, if you open and fund a Merrill Edge Rollover IRA, you can get up to $600.
Best For: People who want to manage their investments easily with a single app; Bank of America customersPros: No minimum deposit or balance required; no annual fee
Click through to learn the benefits of a 401k rollover.