This article was updated on Feb 12, 2018 and originally published March 11, 2017

Many investors turn to individual retirement accounts for two big advantages: tax efficiency and greater investment selection. But when it comes to actually opening an IRA account, you shouldn't pick a broker blindly. The broker you choose affects everything from how much you pay in fees and commissions, to what you can invest in, and your ultimate investment returns.

Let's examine how two popular discount brokerages, Ally Invest (formerly TradeKing) and Vanguard, compare for IRA accounts.

Commission prices

The truth is that trading prices are almost universally lower today than at any point in the past, so pricing doesn't differ all that much from broker to broker. The following table compares the standard commission prices Ally Invest and Vanguard customers can expect to pay on trades in their IRA.


Stocks and ETFs

Stock Options

Mutual Funds

Ally Invest

$4.95 per trade

$4.95 per trade + $0.65 per contract

$9.95 per purchase


$7.00 per trade

$7.00 per trade + $1.00 per contract

$20.00 per purchase

Data source: company websites.

Discounts are common, and standard prices can be more of a guide than a rule. Vanguard, for example, slashes commission prices for customers who keep more of their wealth invested in its mutual funds and ETFs. Likewise, it offers all investors the opportunity to invest in some of its own funds and ETFs without paying anything at all in commissions.

Savvy investors should take special offers for IRA accounts into consideration. Investors often qualify for commission-free trades, or even a cash bonus, just for opening a new account. I view these as effectively bringing down the average cost of a trade.

Mutual funds, ETFs, and commission-free choices

If you're a fund investor, you may want to be choosier when it comes to picking a broker. The funds you can buy, as well as what you pay to buy them, vary by the brokerage.

Brokerage No-load, no-transaction-fee funds (NTF) Commission-free ETFs
Ally Invest None  None
Vanguard More than 1,000 All Vanguard ETFs

Data sources: Company websites.

Realistically, most investors can build a diversified portfolio with just a handful of funds, so what matters is whether your favorite funds make the cut on a broker's fee-free list, not the number of funds a broker offers. Vanguard offers more commission-free funds, but any funds that aren't on its list would be less expensive to buy through Ally Invest. 

Minimum deposit requirement for IRAs

Whether you want to start big by maxing out an IRA on day one, or build your account over time, Ally Invest or Vanguard could work for you. Neither company has a minimum initial deposit requirement for new accounts, so you can get started with as much or as little as you'd like.

A glass jar filled with coins and currency.

No minimum IRAs can be great for tax planning, as you can deposit what's best for you. Image source: Getty Images.

International stocks and ADRs

If you'd like to invest in foreign companies, you'll want to closely examine the table below. Some brokers offer access only to foreign stocks that trade domestically (for example, Ally Invest), while others also offer the opportunity to send trades to international stock exchanges (for example, Vanguard).

Type of Investment

Ally Invest


American depositary receipts (ADRs)



Stocks traded on international stock markets


Yes (Vanguard's Block Desk)

Mutual funds and ETFs of foreign stocks



Data source: company websites.

The truth is that discount brokers that offer access to international markets are less common, so if trading on foreign markets is important to you, you'll have to choose from a smaller set of brokers.

Mobile app reviews

You can check your account and make trades from your mobile phone or tablet from anywhere around the world. Here's how each broker's users and customers rated their mobile trading apps, as of Feb. 12, 2018.


Apple App Store

Google Play

Ally Invest

4.7 stars

3.4 stars


4.8 stars

4.1 stars

Data source: relevant app stores.

Fees on IRA accounts

You should review a broker's fee schedule before opening account because some fees are simply avoidable if you're knowledgeable about how and when fees are charged.

Vanguard charges an annual account service charge of $20.00, but you can avoid this fee by keeping a $10,000 balance or opting in to receive documents (statements and annual reports) electronically rather than by snail mail. Ally doesn't charge account maintenance fees. 

Which is better: Ally Invest vs. Vanguard for an IRA?

The better broker ultimately comes down to how you want to manage your IRA. Vanguard may be a natural pick for investors who prefer its index mutual funds and ETFs, given they're on its commission-free list. Ally Invest might win over more active traders, who prefer its lower-cost stock and option commissions.

To be clear, The Motley Fool does not endorse any particular brokerage, but we can help you find one that's a good fit for you. Visit's IRA Center to compare several brokers all on one page, and see if you qualify for any special offers for opening a new account. 

Jordan Wathen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.