As I've already reviewed TradeKing, Scottrade, and Sharebuilder regular taxable accounts, what I say about these brokers here is specifically about their IRA accounts.
I also go over IRA accounts at Firstrade and TD Ameritrade. At some point in the future, I hope to write up regular individual account reviews for these brokers, as well as for Zecco and Sogotrade, among others. I also plan to review Zecco's IRA. Sogotrade doesn't offer one yet.
See my review of TradeKing's regular individual account.
The following relates specifically to the IRA or Roth. The good thing about a TradeKing retirement account is that there are no custodial fees. As for the disadvantages, there is a $50 fee for closing or transferring your account. Also, it's a little complicated making electronic deposits to your IRA (you have to fax or mail them a form with your bank information, specifying how often and how much you want to contribute to your account).
See my regular individual Scottrade account review for the general good and bad about Scottrade, which applies to the IRA. As for the IRA specifically, it has the advantage of having no custodial fees and no account transfer fees.
See my Sharebuilder review for details about the regular individual account.
This may dissuade you from considering a Sharebuilder IRA. However, depending on how many trades (stocks and mutual funds) you make per month, even with the $25 fee Sharebuilder may be the most cost effective IRA broker listed on this page (the fee is waived if you sign up for the standard or advantage accounts--see the individual account review for details). It is also the only one that enables you to buy fractional shares.
As I trade infrequently in my Roth IRA, Sharebuilder's $25 fee made it more expensive for me than other brokers. This may not be the case for your situation.
As of November 1, 2008, we are pleased to inform you that ShareBuilder no longer has an administration charge for IRA and ESA account types. This applies to all IRA and ESA accounts, regardless of when your account was opened.
1. No custodial fees, account minimums or maintenance fees.
2. Good customer service.
3. $6.95 a trade.
4. Easy to use website.
5. Easy account setup.
6. Easy to make electronic deposits.
7. Wide choice of mutual funds and fixed income.
8. Decent yields on cash.
9. News and research are decent (provided by Standard and Poor's).
10. Free real-time quotes.
11. $9.95 commission for no-load mutual funds.
12. Free dividend reinvestment
1. No fractional share buying (just as with TradeKing and TD Ameritrade, you get fractional shares when you automatically reinvest dividends).
2. Only one physical location (in Flushing, NY).
3. Electronic deposits have to be $100 or more.
4. $500 minimum for mutual fund investments. Additional mutual fund investments have to be $100 or greater.
I've had it for a while now, and so far I'm very happy with my Firstrade Roth IRA.
1. No custodial fees.
2. No account minimums or maintenance fees.
3. Your electronic IRA contribution deposits are instant. Enter the amount, press the submit button, and the money is available for use in your account.
4. Plenty of investment options, including thousands of mutual funds (many of which are no-transaction-fee funds) and fixed equity to choose from.
5. Good research and news, provided by Morningstar, Standard and Poor's, Vicker's Stock Research, First Call, and MarketEdge. TD Ameritrade also has a pretty good stock screener.
6. Free real-time quotes.
7. Easy to use interface.
8. Account sign up takes only a few minutes.
9. No commissions on load funds or no-transaction-fee funds.
10. Fast order execution.
11. Free dividend reinvestment.
12. Plenty of physical locations.
1. Transferring your entire IRA to another broker will cost you $75. A partial account transfer costs $25.
2. Cash yields are terrible. As of writing, the highest APY is 0.5%, and that's for accounts with $200,000 and over.
3. $9.99 for stock and ETF trades. Telephone trades are $34.99, and broker assisted trades are $44.99.
4. No-load mutual fund orders come with a $49.99 commission.
5. No fractional share buying (for stocks and ETFs).
If you agree with me that your dividend heavy investments (such as REITs, funds that throw off a lot of income, and dividend paying stocks) belong in an IRA and dividends should be reinvested, you're better off avoiding Scottrade for your IRA.
As TD Ameritrade is expensive (and you can do your investment research elsewhere), it is probably worse than Sharebuilder, TradeKing, and Firstrade. If you like fractional share buying, Sharebuilder is the account for you, out of those listed above. As for TradeKing and Firstrade, the difference for me was how to fund my account. I don't have a predictible income stream, so Firstrade's convenient electronic deposits were best for me.
Updated July 2, 2008