Forex trading is a decentralized foreign currency trading market with huge profit possibilities through different market providers. With the global availability, ease of access, and the straightforwardness Forex attracted many traders and enthusiasts looking to invest money and profit as a full-time business or just an extra income. As such, both Forex traders and brokers will constantly look to increase the profits through the success rate and decrease the actual expenses that Forex brings, such as fees and taxes.
What are IRA Accounts?
IRA stands for Individual Retirement Accounts which are unique retirement accounts which allow different tax ramifications. They are usually opened with a custodian company and with specific application paperwork which can vary and should be checked with the custodian and the tax advisor. While the process can be complicated and stretch over a period up to a couple of months, it is a safe and well-developed way to reduce tax liability, protect the income and ultimately make retirement savings.
IRA Account Types
There are different IRA accounts types, with the most important ones being the traditional self-directed and Roth IRA accounts. The traditional account will allow you to reduce your liabilities through tax-free money you will be able to withdraw when you retire, as you income becomes smaller and you pay less tax. The account is opened with a broker through a custodian, with the balance free to grow tax-free until you decide to withdraw. Roth IRA account is somewhat different as they are not tax deductible and your post-tax income must be used. With deposits made with after-tax money, this allows the IRA balance to grow tax-free and the withdrawn money will not be taxed. This is thus usually more appealing to the investors who would be in high tax brackets upon retirement.
Why Use an IRA Account?
Opening an IRA account with a broker or a bank is practically one of the best ways for US citizens to protect income from taxes. Saving money for the retirement, traders can execute trades with profits and losses in a tax-free environment where they actually also diversify them and add stability to returns. With a possibility to add your prior retirement funds to your Forex account, you’d be exempt from taxes with withdrawals. This is topped by the safety and the security offered by IRA custodians, actively handling your trades as well as the paperwork and all the possible issues. IRA Custodians will usually charge an annual fee just as if you are paying a membership or commission fees for the custodial services. If the service is offered for free the brokers are actually paying it, and there are other fees you should consider too such as fees to open and close the IRA accounts.
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The Best Forex Brokers offering IRA Accounts
TradeStation was founded in 1982 as Omega Research in an attempt to research trading opportunities as well as optimize and automatize trading strategies. TradeStation was acquired by Monex Group in 2011 and deals in trading analysis software and brokerage. With offices in USA, UK, Australia and Costa Rica, TradeStation provides services to a big customer base with a diverse and genuine offer. With an advanced trading platform, TradeStation is known to support the third-party development with EasyLanguage technology. It offers in-depth analysis with charting tools and more than 150 indicators. IRA accounts are charged a $35 yearly account membership fee and another $50 fee if you’d like to terminate it. There are commission-free Forex IRA accounts with tight spreads and fractional pips, including Traditional, Roth, Sep, and rollover IRA.
Forex.com is a Forex broker founded in 2004 by GAIN Capital, a US financial services company with 800 employees. Forex.com offers services through a number of different trading platforms including MetaTrader4, with access to more than 40 currency pairs and commodities. Forex.com provides tight spreads and many trading possibilities, as well as market research tools, educational center, and EA hosting. The customer service is well-trained and offers 24 hours a day support, with knowledgeable and helpful agents. Forex.com offers opening IRA accounts with partner custodians such as Equity Trust Company and Millennium Trust Company with varying requirements and conditions you should check first.
FXDirectDealer is a US broker company founded in New York in 2002, offering great services through a range of platforms including MetaTrader4 and FXDD Swordfish. With the neat interface, easy navigation and good execution times FXDD build great user experience and trading environment. Being one of the biggest US-facing Forex brokers, FXDD offers over 40 major currency pairs. FXDD offers a range of deposit and withdrawal methods and does not charge fees for wire transfers into and out of the account. You can open an IRA account with FXDD through several custodians including Equity Trust, Entrust Administration, and Millennium Trust companies.
IRA accounts are definitely one of the innovative ways to protect trader’s funds from part or all tax expenses, providing a safe environment to invest and trade. While it locks your funds for certain time periods, this is widely considered as a positive retirement fund saving which actually allows you to switch to the lifestyle in an easier and more pleasurable manner. Of course, we would advise you to take this is a start to your IRA research and always read and make an in-depth research to the terms and conditions of opening such an account on both broker and custodian end.
Other Forex Accounts
- Forex Brokers with Swap-free Accounts
- Forex Brokers with Segregated Accounts
- Forex brokers with free VPS