While regular IRAs only let you invest in traditional assets like stocks, bonds, mutual funds, and ETFs, self-Directed IRAs (SDIRAs) allow you to hold alternative investments in your Roth or traditional IRA, such as real estate, private equity, cryptocurrencies, and precious metals. 

Self-directed IRAs are special types of IRAs. While they follow the same rules, limits, and eligibility requirements of a regular IRA, the only difference is the access to different types of investment options. Major brokerages typically do not offer SDIRAs. To open a self-directed IRA, you’ll have to find an IRA custodian or administrator that allows you to invest your IRA in specific alternative assets.

At Carry, self-directed traditional and Roth IRAs are included in our Pro plan, along with regular IRAs, brokerage accounts, and our Solo 401k. We make it super simple to make alternative investments, and can even invest in cryptocurrencies natively in our app. You can also seamlessly transfer money between your IRAs at any time if you want to make investments into alternative assets. Click here to get started.

Also read: What is a Self-Directed IRA?

Best self-directed IRAs

Every self-directed IRA provider has different fees, levels of support, and investment options. Some only allow you to invest in a single asset class (like crypto), and others provide you with a range of alternative assets to choose from. Here are the best SDIRA providers for 2024.

Carry Self-Directed IRA

Carry’s self-directed IRAs are available in the Pro plan and includes both a self-directed traditional IRA and self-directed Roth IRA. Once your accounts are opened, making alternative investments is fast and easy. You can even invest in major cryptocurrencies natively through the Carry app.

  • Invest in major cryptocurrencies natively through the app.
  • Invest in other alternative assets by easily submitting the investment information through the app. You can invest in anything from startups to private shares in a basketball team.

Not only do you get access to self-directed IRAs, your Carry Pro account also comes with regular traditional and Roth IRAs, the Carry Solo 401k Plan, and brokerage accounts. You’ll also receive a personalized financial plan from Carry’s advisors, and can contact them whenever you have questions.

Carry makes it easy to get as much money as possible into your self-directed accounts to make alternative investments. Making contributions into your account takes minutes, and you can easily transfer over funds from other retirement accounts you have.

For example, if you qualify for a solo 401k, you can contribute up to $69,000 ($76,500 if age 50+) for 2024 and then rollover the funds into your IRAs. This would allow you to get $69,000 into your self-directed IRAs rather than being limited to the $7,000 IRA contribution limit for 2024.

Alto IRA

Alto IRA lets you open a traditional Roth or SEP IRA and invest in a variety of alternative assets like crypto, farmland, venture capital and startups, private credit, and real estate crowdfunding. Each asset has different requirements. Most start with an initial required investment of around $100 to $1,000, with some only being available to accredited investors.

Many SDIRAs have high fees. Alto IRA is best known for having very reasonable fees at just $10 per month, or $100 per year, for the Starter plan. They also have a dedicated crypto IRA since a large percentage of people only open a SDIRA in order to invest in cryptocurrencies. For their Alto CryptoIRA, there are no account fees and you pay just 1% per trade.

Equity Trust

Equity Trust is another SDIRA provider that gives you many choices in alternative assets to invest in. Through the platform, you could invest in precious metals, crypto, p2p lending, private equity, and real estate. Unlike some of the newer SDIRA providers that have opening, Equity Trust has been in business since 1974, has over 200,000 customer accounts, and manages over $34 billion in assets under management.

Pacific Premier Trust

Pacific Premier Trust is best known for its great customer support. Like Equity Trust, they’ve also been around for a long time, over 30 years, and have over $15 billion in assets under management. Investors like Pacific Premier Trust for investing in real estate and private equity. Fees are higher at 0.30% in annual fees for accounts up to $1 million in assets. While SDIRA custodians are not allowed to give financial advice, Pacific Premier Trust is known for providing great customer service to make sure your investments are IRA-compliant.

Bitcoin IRA

If you’re looking to just invest in bitcoin, BitcoinIRA is a specialized SDIRA that lets you invest in crypto. They give you a crypto wallet that you can use to purchase cryptocurrencies in your self-directed IRA. Most major cryptocurrencies are available on the platform. If you’re like many other people, and just want to use your SDIRA for crypto investments, BitcoinIRA could be a good choice without the added complexity of other asset classes.

IRA Financial

IRA Financial was founded in 2010 and lets you invest in a wide variety of alternative assets. They’re one of the few SDIRA providers that also give you a checkbook control option, meaning you don’t have to invest through a custodian and can write checks and send funds directly yourself. You can still use their SDIRA without checkbook control to invest in real estate, precious metals, private equity, and crypto. Fees can be a little bit steeper at $999 to open a checkbook IRA LLC, plus an annual custodian fee of $360.

What are alternative assets?

Alternative assets (also referred to as alternative investments) are any asset class that aren’t stocks, bonds, or cash.

Why invest in alternative assets

Investing in alternative assets gives you a hedge against inflation because they’re less correlated to standard asset classes. They’re also less regulated by the SEC, have less historical risk and return data, and can often have less liquidity than traditional assets. As a result, alternative assets tend to be higher risk, but have the potential for higher rewards.

While alternative investments are riskier asset classes than traditional investments, they provide greater portfolio diversification, which can lower your overall risk, white also giving you the potential for higher returns.

What are some examples of alternative assets?

Some common alternative investments are:

  • Cryptocurrencies
  • NFTs
  • Real estate
  • Commodities
  • Derivatives
  • Private equity
  • Private debt

Also read: Can You Invest In Alternative Assets with a Retirement Plan?

Can a 401k invest in alternative assets?

A regular 401k plan that you receive from your employer does not give you the option to invest in alternative assets. Usually, you’re limited to just a handful of mutual funds selected by your employer when they set up the plan.

However, if you’re self-employed, freelance, or own a business, you can open a solo 401k. A solo 401k has 10x the contribution limit of a SDIRA and also comes with checkbook control. This means you have the ability to invest in any asset class, without having to go through a custodian. If you want to make an investment, you have full control over your solo 401k bank account and can write checks or wire funds directly.

A solo 401k is like a supercharged SDIRA if you are eligible. And to be eligible, you only need to have business activity without any full-time W-2 employees that work over 1,000 hours per year in your business.

Can you have both a self-directed IRA and a regular IRA?

Yes, you’re allowed to have regular traditional and Roth IRAs and also a self-directed IRA. You can hold traditional assets in your regular IRA and hold alternative assets in your SDIRA.

How much can I contribute to a SDIRA?

For 2024, you can contribute up to $7,000 if you’re under 50 years of age, and up to $8,000 if you’re 50 years of age or older. If you have multiple IRAs, contribution limits are aggregated between all your accounts. The total contributions to all of your traditional and Roth IRAs must not exceed the IRA contribution limit.

What’s the difference between a self-directed traditional IRA and a self-directed Roth IRA?

Contributions to a traditional IRA are made with pre-tax income. You get a tax deduction on your contribution, and earnings are tax-deferred until retirement. When you make withdrawals in retirement, they’ll be taxed as ordinary income.

Contributions to a Roth IRA are made with post-tax income. You don’t get any tax benefits when you contribute, but your withdrawals in retirement are 100% tax-free, no matter how large your investment gains.

For more information, also read: Roth IRA Vs Traditional IRA: Key Differences & Similarities