Best Self-Directed IRAs

Best Self-Directed IRAs

Planning for retirement is a complex task- especially when it comes to finances. People want to make the right decisions about their retirement account savings and investment strategies to put themselves in the best position later. IRAs are one of the most popular tools used- but they are not one-size-fits-all.

In this comprehensive guide to self-directed IRAs, we look at the definitions and differences between the various types of accounts- and what they mean for long-term investments. It also covers the risks, rewards, benefits, and challenges that come with a self-directed IRA to provide a clearer picture of who may want to consider this option.

Keep reading if you are thinking about opening a self-directed IRA and want to know more about how, why, and where to get one.

Understanding Self-Directed IRAs

Let’s begin by explaining exactly what self-directed IRAs actually are. Overall, most IRAs work on very similar fundamentals, but the devil is in the details when it comes to choosing the best solution for you.

IRA stands for Individual Retirement Account- meaning a type of retirement savings account opened by an individual, rather than through an employer or company. There are many types of IRA, with varying setups and rules- but all offer tax advantages to retirement savers.

Defining Self-Directed IRAs

The concept of IRAs is straightforward, but what about a self-directed IRA? As the name suggests, a self-directed IRA is an individual retirement account that is controlled and directed by the account owner. In other words, they are in the driver’s seat when it comes to picking investments, managing contributions, and ensuring due diligence on the account.

There is not one particular account type that is specifically self-directed. You can open a self-directed Roth IRA or self-directed traditional IRA, for example- rather than a conventional Roth IRA or conventional traditional IRA.

People can open self-directed IRAs through specific companies and financial institutions. They charge fees for their services- including providing an approved self-directed IRA custodian for the account (something the IRS guidelines demand).

Traditional vs. Self-Directed IRAs

This is where terms can get a little complicated. The word ‘traditional’ is used in a couple of ways when describing IRAs. It refers to the type of account in two ways: the tax rules and setup and the method of direction.

In this example, we are referring to the conventional way to direct an IRA. A traditionally directed IRA is managed by a financial advisor or fund manager. They are in charge of the investment choices and general account management instead of the owner. The same applies to traditional IRAs and Roth IRAs.

Another key difference between the two is the range of investment options. It is substantially smaller with conventional direction. You have many more choices if you opt for a self-directed IRA.

the benefits of self-directed ira

Benefits of a Self-Directed IRA

  • More control over your portfolio and assets

Self-directed IRAs are best for people who prefer a hands-on approach to savings and investments. You have far more flexibility and input with this type of account.

  • Increased investment choices

Most conventional IRAs are limited to mutual funds and bonds, while self-directed IRAs work with all kinds of diverse asset classes.

  • Additional tax benefits

All IRAs have tax advantages, but you can make the most of them when you have a self-directed account. It is easier to manage contributions for maximum tax-deferred growth and potentially tax-free returns.

  • Higher return potential

Depending on the account type you have, you can withdraw your returns without paying tax on the earnings. Also, because of the vast selection of investment options, it is easier to diversify and protect your savings- ultimately increasing your chances of success long-term.

  • Better for estate planning

If you choose a self-directed Roth IRA, it is possible to leave the contents to beneficiaries with little to no tax for them to pay. This is a great option for those planning to make their IRA savings part of their estate.

Risks and Challenges of Self-Directed IRAs

  • Fees are often higher.

Self-directed IRAs can cost a lot more than conventional retirement accounts. There are fees for the administrator, custodian, and the assets themselves. Transaction fees can add up, especially when combined with annual fees from the IRA company. It pays to research the options beforehand and look for low-cost solutions if you want a self-directed account.

  • You have very little guidance.

If you are not a confident investor, operating a self-directed IRA can be pretty daunting. You are solely responsible for finding and selecting investments- and it is up to you to do the due diligence on any investment you consider.

Experienced investors may have no problem with this- and may actually prefer it- but those who don’t have much experience may prefer some investment advice. It is worth hiring a financial advisor to assist- since IRA custodians and companies don’t offer guidance because they are not responsible for due diligence.

  • They can be vulnerable to fraud.

Unfortunately, people sometimes prey on those with self-directed IRAs with fraudulent investments. Fraudsters may attempt to convince people to invest in fake opportunities using their self-directed retirement funds.

This is why due diligence is so important. Without a financial advisor or fund manager to screen potential investments, people could end up losing money if they fall for a scam.

  • You need to be prepared for RMDs.

Self-directed accounts have the same required minimum distribution rules as conventional accounts (with the exception of Roth IRAs)- meaning you need to start withdrawing money once you turn 73. The IRS sets the required amount based on your life expectancy and the total IRA funds.

If you have a self-directed account with diverse investments, it can be tricky cashing in on certain things to have the required liquidity to meet the mandatory withdrawal amount.

Exploring Investment Options in Self-Directed IRAs

Overall, the pros and cons are on a fairly even kilter. It really depends on your personal circumstances whether or not they are a good fit. That said, one of the undeniable benefits for anyone is the freedom to invest in a wider range of asset classes.

Let’s explore some of the available investment choices for self-directed IRA holders.

Common Investment Options

First, we will look at the more popular, mainstream investments that people favor with self-directed IRAs.

Stocks and Bonds

Stocks & bonds are the bread and butter of the investment world.

Stocks are essentially shares in a company or product- the value of which rises and falls with the success and failure of said company. They have the greatest potential for high returns but also carry higher risk.

Bonds are the safer alternative, but not entirely without risk (with the exception of Government treasury bonds, which are as close to risk-free as an investment gets). Instead of investing in a company, you buy a company’s debt. The debt is purchased with an agreed repayment plan (including interest), which is paid back gradually.

Investing in bonds creates a steady income flow into the account. They don’t generally have high returns, but the risk is also relatively low. Both these things depend on the quality of the bond. Higher-rated bonds are safer but less lucrative- low-quality bonds have higher returns but carry much higher risks.

Real Estate

Real estate is a popular investment. Whether you buy property, land, farming zones, or building contracts- you can generate returns through investments in real estate.

It can be a complex industry- especially if you also use the property personally. One of the possible downsides of self-directed IRAs is the restriction on real estate investments. You can’t buy property using self-directed IRA funds and use it- including offering it to friends and family for free use.

You can, however, use self-directed IRA funds to invest in rental property, commercial developments, and farming. Real estate investments come in many forms- these are just a few examples.

Precious Metals

Precious metals such as gold and silver have been staple investments for generations. Investing in gold is a great way to hedge against inflation and balance out fluctuation from the value of the US dollar. Precious metals are types of commodities. Other commodity investments to consider include oil, gas, and industrial metals.

There are different ways to invest in precious metals. Paper gold is a common solution. It essentially means stock in gold mining companies or other aspects of the precious metals business.

You can also invest in physical gold- but only if you open a Gold IRA. Gold IRAs are specific accounts set up to accept precious metals investments in the form of physical gold. They are technically categorized as self-directed, but you must have an appointed and approved custodian to open one and invest legally.

Alternative Investment Options

Now, let’s discuss the alternative investments. Alternative asset classes are used to diversify portfolios. They are generally used by more adventurous investors- since there is often a higher risk factor involved.

The option to hold alternative investments is one of the benefits of self-directed IRAs for some, but it also increases the complexity of managing this type of account.


Cryptocurrencies have grown exponentially in recent years. Since their inception in 2009, they have been the source of great controversy- including huge returns and major losses.

Investing in cryptocurrency is inherently risky, but it does also carry high return potential. The market is very volatile, with a somewhat uncertain future. Some believe it is the future- others think it is a fad. Whatever you believe, it is important to do plenty of research before investing.

Private Equity

Private equity investing is when investors provide capital to private companies (not publicly traded). In return, they get a percentage of ownership or interest or both. The return rates on private equity investments are historically higher than publicly traded companies.

Other reasons to invest in private equity include:

  • the opportunity to make a difference to a company you believe in
  • choose to support things that align with your interests
  • easy access to opportunities through equity crowdfunding platforms

This type of investment used to be limited to high net-worth individuals, but any investor can get involved nowadays. If you have a self-directed IRA, you can use funds from the account to make a private equity investment.

ESG Investments

ESG investing is a type of investment strategy that uses a strict set of standards to screen and select investments. The letters stand for Environmental, Social, and Governance.

Environmental criteria look at how companies manage their impact on the environment, including climate change actions, green policies and regulations, and environmental risk mitigation efforts.

Social criteria refers to the company’s internal and external relationships with stakeholders, their community, employees, and consumers. It explores ethics, values, and principles to determine whether or not it is the type of business an investor wants to be associated with.

Governance criteria are all about how a company operates- specifically in its leadership practices. This includes the selection of board members, how they avoid conflicts, and whether or not the behavior of leadership is accountable and correct.

Best Self-Directed IRA Providers of 2024

Self-Directed IRA Providers

Self-directed IRA companies are financial institutions set up for people to open and operate individual retirement accounts. Some work only with these types of accounts, while others have a wider service area.

These companies act as account administrators and self-directed IRA custodians but are not responsible or involved in any way with the selection of investments or direction of funds. They are, however, the gatekeeper for the account- and the first port of call for the investors when they want to take any action with their savings.

The provider you choose has a significant impact on your experience as a self-directed IRA holder. Some of the main considerations include fees, customer services, and investment focus.

Here are six self-directed IRA companies worth considering in 2024. We have compared the key features, benefits, and costs of each for a better idea of who each company may suit best.

Alto: Low Fees and User-Friendly Interface

Alto is an excellent self-directed IRA company aimed at investors who want a simple and effective way to manage their savings and diversify their portfolios. It is best known for its modern alternative investments and low-cost accounts.

One of the standout features is the crypto IRA plan- a self-directed IRA geared towards those who specifically want to invest in cryptocurrencies. The platform also offers traditional, Roth, and SEP IRAs through the standard or pro plan- where people can invest in more than 75 alternative assets.

Key Features and Benefits

  • Affordable account fees
  • Excellent user interface that is easy to use
  • Exciting investment opportunities such as crypto, start-ups, art shares, and land
  • 150 possible cryptocurrency investments
  • Simple pricing structure

Fee Structure and Commissions

There are a few different account options and plans with varying prices and fees.

The starter plan is the cheapest option. Account fees are $10 per month, but you get two months free if you pay annually (making the total annual fees for the account $100). There is also a partner investment fee of $10, an outbound wire fee of $25, and a $50 fee for closing the account.

Moving up to the pro plan, the account fees increase to $25 per month (again, two free months if you pay annually. The other additional fees are the same as the standard plan- with an additional $75 charge for private investments.

Rocket Dollar: Wide Range of Investment Options

Rocket Dollar is another reputable and fairly straightforward IRA custodian service that aims to make self-directed IRAs more accessible. That said, the company has a very hands-off approach with minimal client interaction- so it works best for a confident and experienced investor who wants full control and can handle the responsibility.

The company is known for having an excellent range of investments- even more so than a lot of its competitors. It is user-friendly and simple- with several valuable resources customers can use to educate themselves.

Key Features and Benefits

  • Offers self-directed IRAs and 401(k) accounts
  • Lower costs for additional accounts
  • Simple and transparent pricing structure
  • Excellent investment choices
  • Support for Roth IRA conversion (Gold plan only)
  • Tax filing assistance (Gold plan only)

Fee Structure and Commissions

Rocket Dollar offers a silver and gold plan- silver being the cheaper of the two, gold being the more comprehensive in terms of services provided. The monthly account fee is $15 or $30, respectively. Fees are $5 less for a second account and $10 less for any account thereafter.

The company also charges a one-off account opening fee- $300 for a silver account and $600 for gold.

Equity Trust: Comprehensive Services and Support

Equity Trust is one of the more traditional self-directed IRA firms- which makes sense considering it has been around for quite some time. It is very much a service-focused provider that works closely with clients to support them wherever possible.

The investment range is decent, and you can choose eight different self-directed accounts- including traditional, Roth, SEP, and SIMPLE IRAS, and two types of solo 401(k) accounts.

Key Features and Benefits

  • Attentive customer services team
  • Uses advanced technology to help streamline operations
  • The team behind the company has been in business since 1974
  • Well-established and respected company
  • Highly regulated with strict security protocols
  • No transaction fees

Fee Structure and Commissions

The fee structure at Equity Trust is a little more complicated than some others on the list- and the overall costs are generally higher.

Your annual fees depend on the account value in the first quarter of each year. Amounts range from $225 per year (total value of $14,999 or less) to $2,250 (anything over $2 million). This fee does not cover brokerage services commission- these costs are not shared in detail online.

It costs $50 to apply for an account with Equity Trust online- or $75 if you send a paper application. There are also termination fees of $100 per asset or $250 to close the account.

uDirect IRA: Real Estate Investment Specialist

uDirect IRA is more or less unrivaled when it comes to real estate investments for self-directed IRAs. It is a specialist company, but there are other assets available. That said, uDirect IRA is recommended primarily for those who want real estate to be a significant part of their portfolio.

It gets the top rating from the BBB and gets a lot of online support from clients. You can open various types of self-directed accounts- and access an excellent library of useful learning resources.

Key Features and Benefits

  • Low fees for administration
  • Strong checkbook control
  • Unrivaled real estate investments and resources
  • Transparency in costing
  • Simple online management
  • Access to educational resources, investment guides, and customer service (phone and online)

Fee Structure and Commissions

The annual fees for a self-directed IRA with uDirect IRA are reasonable. It costs $50 to set up the account, then $275 per year for maintenance. There are many other things you need to pay for, which are shared- in detail- on the company website.

Some notable charges include $15 per wire transfer, between $75 and $125 for Roth conversion, $175 for account termination, and $400 for a Solo 401(k) plan document.

IRA Financial: Checkbook Control for Easy Access

IRA Financial has been a popular choice for self-directed IRAs since it launched in 2010. Since then, the company has built a great reputation for streamlined support, service, and account management- all at a reasonable price.

The company doesn’t specialize in any specific asset class. Instead, it opens things up for clients to choose the investments they want. You pick the investment, and IRA Financial does the rest.

Most online reviews confirm that they receive a high level of service from IRA Financial as their custodian- especially when it comes to staying on the IRS’s good side. Following IRS guidelines and ensuring complete compliance can be tricky, but it is an area where this company shines.

Key Features and Benefits

  • Very well structured and organized
  • Audit protection and support
  • Excellent educational resources
  • Checkbook control
  • Affordable annual custodian fees
  • Great reputation and track record
  • Upfront pricing

Fee Structure and Commissions

There are four possible plans. One is specific to crypto, with no setup fee and just $100 annual fees, and one is for solo 401(k) accounts for self-employed individuals ($999 set up fee and $399 annual fees).

The other two accounts offer varying levels of services for self-directed IRAs. A standard SDIRA costs nothing to set up and $460 per year to operate. An SDIRA LLC has the same annual fees but costs $999 to set up.

IRA Financial does not charge any transaction fees, asset value fees, or research fees- and Roth IRA conversions are free of charge.

The Entrust Group: Emphasis on ESG Investments

We love convenience and efficiency as much as the next person, which is one of the reasons we added The Entrust Group to our list. This savvy online portal is arguably the best platform for investors looking to be part of a forward-thinking community fuelled by alternative investment opportunities.

If you are looking for a custodian who goes above and beyond to educate account holders and support them on their investment journeys, The Entrust Group is certainly worth considering. It is also a great place to find investments based on ESG criteria if that is something that interests you.

Key Features and Benefits

  • Excellent portfolio of reliable investment options
  • Fantastic investor education programs
  • Well-integrated online portal
  • Convenient access for account holders
  • Established and respected company with a solid history and track record
  • Assistance setting up checkbook IRA LLC
  • Smart tools to make account management more manageable

Fee Structure and Commissions

The Entrust Group charges annual fees for record-keeping at $199 for a single asset and $299 for multiple assets. If your asset value totals more than $50,000, an additional 0.15% fee applies to the excess.

There are also fees for the purchase or sale of an asset, ranging from $95 to $250 (some things are free, including precious metals and crowdfunding). Transaction fees vary but are clearly explained on the website. You also pay $50 as a one-off for account setup.

Choosing the Best Self-Directed IRA: A Step-by-Step Guide

Let’s talk a little more about the thought process behind choosing the best self-directed IRA- including the account type and provider. Before moving forward, it is important to follow this step-by-step guide to determine your wants, needs, options, and outcomes.

Use the following five steps when comparing self-directed IRA options to help find the best fit for your retirement savings.

understanding self-directed investment goals

Identifying Your Investment Goals

The first step is figuring out what you want from your portfolio. Do you have a set amount in mind? Is maximum growth your priority, or is it more important for you to conserve the wealth you already have?

Some people have very specific ideas regarding the types of investments they are and are not interested in, while others take a broader approach. Wherever you fall on the scale, the important thing is that you have a clear understanding of what you want to achieve and where your priorities lie.

This can help you choose between self-directed accounts and providers based on the investment options that are available- and possibly the area of expertise in a specific asset class.

If you are especially interested in precious metals, for example, you should choose a provider with a Gold IRA option. Those who like the concept of ESG investing may want to look for a company that focuses its services in that area.

Understanding Costs and Fees

As we mentioned already, self-directed IRAs can be costly- but some more so than others. The costs and fees connected with a self-directed IRA vary depending on the provider you choose and the services they offer. It also matters the type of account you choose- since some have potential fees that others do not.

Look into and compare fees across various providers. Also, think about the services that matter to you and what you are willing to pay for them. This can help you figure out what providers have the best value for money in your eyes.

Evaluating Investment Options

A self-directed IRA has significantly more investment options overall, but there are some differences between account types- and even more differences between companies. Although you can technically choose what you invest in, some providers limit their brokerage services to certain asset classes. Choose to invest outside those offerings, and you may face higher transaction fees.

Check what IRA accounts accept the alternative assets you are interested in, and look for a provider that works as a broker for those investments.

Checking Provider Reputation and Customer Service

It is not hard to find a self-directed IRA provider- there are plenty! However, not all have the same reputation for their services. Once you have decided what your goals and investment priorities are- and done some research into prices- the next step is to compare companies you are interested in based on their reputations.

You can learn a lot about a financial company by reading online reviews- as long as you visit trusted review websites that verify the comments are from genuine customers. It is also a good idea to check out the Better Business Bureau and Business Consumer Alliance ratings- as they are generally quite reliable.

The most important aspects to find out about are:

  • Customer service ratings (including how easy it is to contact an agent and how well they handle complaints and queries)
  • The types and amount of complaints received (do people often have issues- and if so, what are they?)
  • Fees and charges connected with the account
  • How easy it is to navigate the website and access your account information
  • What regulation or accreditation the company has
  • How long they have been in business
  • Whether or not they provide value-adding resources and materials that help investors understand their account and investment options
  • The types of investments they offer

Considering Tax Implications

This is more about the type of self-directed IRA you choose than the provider you work with. The tax implications and advantages of IRAs vary from account to account, and it is important to understand the key differences.

The most notable difference is between a traditional IRA and a Roth IRA.

Almost all IRA accounts are traditional in terms of tax implications- meaning the contributions are made with pre-tax dollars, which then grow tax-deferred until withdrawal. When you withdraw funds, they are classed as taxable income. You then pay taxes based on your income tax rate.

Roth is different. A Roth account is funded with after-tax dollars. As long as you wait until you are at least 59 and a half years old, you can withdraw money earned on those contributions without paying taxes.

There are tax implications for all IRAs if you withdraw funds too early. You pay an extra 10% tax on anything withdrawn from a traditional IRA (including self-directed) before age 59 and a half. With Roth IRAs, you only pay a 10% tax penalty if you withdraw earnings before that age- you can withdraw contributions whenever you want without tax implications.

Who Should Consider a Self-Directed IRA?

Among a handful of IRA types, we should point out that a self-directed IRA is by no means for everyone. While they are a perfect fit in some retirement plans, the logistics of directing an investment account solo are simply not doable for all investors.

Here are three examples of people who may benefit from having a self-directed IRA- and should at least consider the option.

Diversification Seekers

Bonds and mutual fund investments are fine- but some investors want a far more diverse portfolio. Choosing to diversify is a popular investment strategy that uses a mixture of assets and asset classes to balance a portfolio, mitigate risks, and create more long-term stability.

If this is something that interests you, then a self-directed account is preferable. Most conventional IRAs have limited investment options, and you don’t have much of a say in where your funds are directed.

By opting for a self-directed IRA, you open things up exponentially to cover a vast range of potential investments. Diversifying is complex and requires strong account management. It can be very rewarding if you are confident in your ability (or have an external advisor to guide and assist you).

Diversification and self-direction go hand-in-hand.

Control-Enthusiastic Investors

The idea of handing over control of your hard-earned savings to someone can be pretty daunting- especially for those who understand the investment industry and want to be involved. If control over your assets is important to you and you have the desire and capability to be a hands-on investor, then a self-directed IRA is definitely worth considering.

Long-Term Financial Planners

Saving for retirement is a long-term game- and it is never too early to start. Self-directed accounts are particularly beneficial for those who are starting early and have a long time to go until they retire. It gives them better control for longer, and they can watch their savings grow over time. As far as long-term planning goes, this is certainly a bonus.

The longer someone manages a self-directed account, the better an understanding they have of how their investments work for them.

Frequently Asked Questions

What is a self-directed IRA?

A self-directed IRA is a type of individual retirement account that puts the control and responsibility in the hands of the account owner instead of a fund manager. They offer more investment options and greater flexibility and control- but they also demand a much more hands-on approach from investors.

What are the benefits of a self-directed IRA?

The key benefits of self-directed IRA accounts are:

  • Personal control over your retirement savings
  • More investment options
  • Potential for higher returns
  • Opportunity for diversification
  • Easier estate planning

What are the risks associated with self-directed IRAs?

Some of the potential downsides to self-directing your IRA are:

  • Higher risk of fraud
  • More responsibility
  • Less guidance and investment advice
  • Higher fees
  • Strict rules on prohibited transactions

How do I choose the best self-directed IRA provider?

Choosing the best self-directed IRA company starts with establishing what your investment goals and priorities are. You must then consider the options and costs that come with different accounts and companies and choose a few that fit the bill.

Once you narrow down the selection, you should research your options online- focusing on consumer reviews, reputation, and services offered. It is beneficial to contact a few providers to see how helpful their customer service teams are and get a better feel for how you would be treated as an account holder.

What are some modern-day alternative asset investment options?

There are many alternatives to traditional investments available now across many different industries. Some of the most popular include cryptocurrency, ESG investments, private equity, hedge funds, art and collectibles, and commodities.


Self-directed IRAs have their pros and cons. Whether or not they are the right choice depends entirely on the individual investor and how confident they feel about taking the reigns. Experienced investors with a good understanding of the industry can certainly benefit- but it helps to choose the right account and best self-directed IRA company.

You can narrow the search using the steps explained in this guide- and better weigh up whether or not a self-directed IRA is right for you at all.

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