The popularity of the self-directed IRA companies is increasing rapidly with each passing day. These companies give the freedom to its customers to direct their funds as per their choice for investment. Conventional IRAs limit the investors to direct their funds only towards stocks, bonds, and mutual funds. However, through self-directed IRAs, investors can explore alternative investment options such as startups, real estate, P2P lending, mortgage notes, and many other such opportunities.

However, self-directed IRAs are not for people who can’t be attentive towards their funds on a daily basis. This type of investment requires the investor to be active and diligent at all the times as per the requirement of the investment. The investor needs to know how to properly handle the tax implications and other properties if the investment as they are responsible for their own IRA funds.

However, given that proper care is taken, the benefits of directing funds in one’s IRA can beat the downside of investing in a self-directed IRA. The companies are now enabling the process of automation and allowing the investors to make transactions online. This has made investing in IRA funds a much quicker and an easier process to handle. The investment crowdfunding platforms provide its investors with multiple options ranging from startups, P2P loans, discounted subprime mortgages to independent film production and many more.

The concept of a self-directed IRA has been known since the origin of IRAs via the Employee Retirement Income Security Act of 1974. However, the legislation required the funds of IRA holders to be held by custodial institutions like banks or brokerage houses due to which the investments in IRAs got confined to the kind of investments that these institutions are known to handle. Since 2001, self-directed IRAs have been explicitly permitted by the IRS as a type of account for alternative investments.

Many companies like Accuplan, Broad Financial, Central Bank, Equity Trust Company, Guidant Financial, Horizon Trust Company, IRA Advantage, American IRA, CamaPlan, First Trust Company of Onaga, IRA Resources etc. offer this service.