Best Places for Federal Employees to Open an IRA

For federal employees who may be considering opening an IRA, what are some of their options?

Federal employees are incredibly blessed to have access to one of the greatest retirement plans in the world: the Thrift Savings Plan. Sometimes, however, federal employees can benefit from using IRAs (Individual Retirement Accounts) and Roth IRAs in conjunction with their TSP.

There are many pros and cons to think about when comparing the TSP versus IRAs, but I will leave that comparison for another conversation. Today I’m going to focus on those that have decided that an IRA makes sense for them and are wondering where is the best place to open one. There are numerous choices online and it can often be difficult to sort them all out.

The Fees

One of the biggest things that you need to watch out for when investing in an IRA is the fees that you pay. The funds in the TSP have incredibly low fees regardless of what TSP participants decide to invest in. This is not the case when investing in an IRA. Some investment options are much more expensive than others.

Fees are not bad all the time but it is important to ask what you are getting for the fee you are paying. 

Fidelity Investments

Fidelity Investments is a great place to start an IRA because their index funds are very low-fee or even zero-fee. There is not a minimum deposit required to open a retirement account at Fidelity.


Vanguard is also a great option if you’re looking for a low cost option. Vanguard is considered the pioneer in low-cost index funds and has continued to be a leader in that space ever since.


If you’re looking for an institution where you can do more than invest in an IRA, Schwab may make sense for you. With checking and savings accounts you can bank there as well. Schwab has very competitive fees, and unlike other institutions, it does not restrict your investment choices to funds that they own. 


Betterment is a robo advisor which means that they use computer algorithms to build the portfolios that you’d be investing in. Betterment is very good at keeping investing simple. Once you input information about yourself such as your age and when you expect to need the money, Betterment designs a portfolio for you. The downside however, is that betterment charges .25% to provide this service. 

About the Author

Dallen Haws is a Financial Advisor who is dedicated to helping federal employees live their best life and plan an incredible retirement. He hosts a podcast and YouTube channel all about federal benefits and retirement. You can learn more about him at Haws Federal Advisors.