A Roth IRA is an ideal place to park your retirement savings that can be withdrawn tax-free when you retire.
Once you pay taxes on the money that goes into your Roth IRA account, you can withdraw it tax-free at age 59 1/2.
Due to its popularity, many firms offer Roth IRA accounts for you to choose from. However, with those many options, it is very easy to get confused about which firm to choose.
Many firms require a minimum investment to get started.
If you have little funds to deposit, choose brokers with no minimum investment requirements or the ones whose minimum requirement matches your investment strategy.
To make it easier for you, we ranked and reviewed the 15 best Roth IRA accounts below. If you are just starting out, you can skip the accounts that have a higher minimum investment requirements and jump on the ones more suited to your investing needs.
Before diving into the best Roth IRAs on the market, let’s refresh your memory on what exactly a Roth IRA account is:
A Roth IRA is a retirement savings account that provides tax benefits, provided you follow the guidelines of your account.
It’s pretty simple – you pay taxes on money going into your account but future withdrawals are tax-free. It’s a great way to both minimize your taxable income upon withdrawal and take out your money tax-free in retirement when you’re 59 1/2.
Now that you’ve refreshed your memory on Roth IRAs, here are the top providers, plus their key benefits and downsides.
Best overall broker for Roth IRAs
Known for its outstanding customer service, Charles Schwab is one of the distinct brokers that provides a number of investment alternatives for Roth IRAs.
The broker has also done away with commissions on ETFs, stocks and options trades, making itself a best-in-class affordable service provider.
Here are some of the main benefits and downsides of the Roth IRA from Charles Schwab.
- Zero minimum investment requirement and no annual maintenance fee
- Zero fees on stocks, ETFs, options and 4000 plus mutual funds
- 24/7 customer support with 300 plus branches
- Choice of Robo-advisors and managed portfolios
- Free basic platform for trading and research
- Advanced research comes at a higher price at Schwab
- Account closing fee of up to $50
Best for its low-fee structure
Vanguard is known for its low-cost mutual fund and ETF offerings. Its mutual funds have ranked in the top decile of the industry for their robust performance, which makes it your default choice if you want to invest in mutual funds through an IRA account.
- A large number of investments to choose from, including mutual funds, ETFs, stocks, bonds, options, annuities, and CDs
- Choice of 1800 no-fee ETFs and over 3000 no-fee mutual funds
- Lower commissions and fees
- Best for mutual fund investing
- Automated as well as personalized asset allocation advice
- Active customer support, 8 AM to 10 PM, Monday to Friday
- High commissions on stock trading
- Account minimum of $1000
Best Robo-advisor platform
Betterment is one of the largest independent Robo-advisors that provides automated investing at a nominal cost.
- No minimum balance requirement
- Investing strategy designed as per your objectives and risk tolerance
- Choice of multiple investment strategies including value investing, growth investing and balanced portfolio investing
- Small annual fee of 0.25% of the portfolio (as low as $25 for a $10000 portfolio)
- Zero trading fees on investments
- Higher fees for personalized advice with a human touch
Best for accessibility and support
Merrill Edge is a web-based offering of popular full-service broker Merrill Lynch, which is a part of Bank of America. Merrill offers a number of tools for DIY investors and also offers advisory and portfolio management services for hand-off investors, making it an exceptional choice for your Roth IRA.
- Seamless integration with your Bank of America account
- No minimum for online accounts
- Zero fees for online stock and ETF transactions
- A range of investment options including mutual funds, stocks, and options
- Access to excellent research and educational resources
- Higher fees for advisory based and Robo-guided investing
Best for the human touch in investing
TD Ameritrade is one of the best online discount brokers that provides exceptional customer service through its network of hundreds of branches. Due to its discount broking pedigree, TD Ameritrade remains affordable even with its better customer service as compared to other discount brokers.
- No minimum for account opening, zero account maintenance fees
- Zero commissions on stock transactions
- Choice of thousands of commission-free ETFs and mutual funds
- A host of digital tools for retirement planning
- Convenient dividend reinvestment plans
- 24/7 customer support with more than 360 local branches and representatives in 1,200 TD Bank branches
- Minimum investments required for managed portfolios
Best for Robo-advisor at a nominal cost
One of the closest rivals of Betterment, Wealthfront offers great Robo-advisory service at a low cost for your Roth IRA. Wealthfront is the best broker for a beginner investor due to its entirely hands-off approach to investments. Wealthfront charges a management fee of 0.25% on the account balance.
This fee is waived (up to an asset value of $5,000) if you sign up to the Wealthfront platform through a referral. You can get further waivers by referring clients to Wealthfront. Each successful client referral earns zero management fee on an additional $5,000 account value.
- Digital advisory based on investor’s objectives and risk tolerance
- Automated portfolio rebalancing
- A robust Robo-advising platform for beginners
- Affordable annual fee
- Minimum account opening balance of $500
- Not so suited for hands-on, DIY investors
Best rates on deposits
Ally is a smaller broker as compared to bigger established firms but offers the same services. With the backing of Ally bank, Ally is able to offer attractive savings instruments as well in the Roth IRA.
- Zero minimum investment required
- Zero commissions of trading stocks, options, and ETFs
- 24/7 customer service
- Also, offers managed portfolios
- Attractively priced saving instruments
- High fee on Mutual Funds
- Transaction limits on IRA savings accounts
Best for Real Estate Investments in Roth IRA
Fundrise is a great fit for an investor looking to real estate investments in his Roth IRA. They provide this exposure through Real Estate Investment Trust (REITs). Fundrise’s offerings are more suited to investors who are looking to get into riskier investments for higher returns.
- Access to real estate investments
- Track record of returns of 12.3% per annum over the past 20 years
- Robust dividend income in Roth IRA with automatic dividend reinvestment
- Minimum investment of $500
- Lock-in requirement and penalty on premature withdrawals
Best for the do it yourself (DIY) beginner investor
Fidelity offers excellent investment options at overall affordable fees with tons of education material for beginner investors. This all-around service is available to Fidelity clients with excellent customer service at its 200 local branches.
- No minimum investment required
- Zero trading fees on ETFs, stocks, and options
- 3,700 plus no-fee mutual funds
- Choice of stocks, bonds, mutual funds, and managed portfolios
- Round the clock live customer support with more than 200 local branches
- Right tools for all kinds of investors including research
Best for a basic, no-nonsense Roth IRA
E*TRADE is another great platform for your Roth IRA. You can choose from stocks, options, ETFs and mutual funds to build your account.
- Nil initial minimum investment requirements
- Zero-fee on trading stocks, ETFs, options with 4,400 no-fee mutual funds
- Offers managed portfolios
- Round the clock live customers support with 30 branches
- A fee of $25 refunds, early withdrawals, and recharacterizations
Best Roth IRA for women in business
Ellevest has a distinct, powerful tagline: Invest like a woman. It’s built by women, and designed for them, too.
With low minimums, a full-scale concierge team, financial planning, and stellar personalization, Ellevest is changing the game for women in business.
- $0 Account minimum for starting
- Affordable advisory fee, ranging from 0.25% – 0.5% of assets
- Unlimited access to financial advisors
- Goal-based investing
- Lack of supported accounts
- No tax-loss harvesting
12. SoFi Roth IRA.
Best for minimalistic hand-off investors
SoFi Automated investing is another good choice for hands-off investors. With its zero management fee and no account minimum, you get a low-cost investment manager for your Roth IRA.
- A diverse range of low-cost investments
- Zero management charges
- Decent customer support
- Available guidance from Certified financial planners
- Lack of supported accounts
- No tax-loss harvesting
Best for seasoned traders
Interactive Brokers offers a robust bouquet of investment choices including stocks, bonds, options, futures and currencies for your Roth IRA. It is best for seasoned trades due to Interactive’s low trade commissions, reach, execution speed and best trading platform.
- No minimum balance for account opening
- Zero fees on trading
- 50 commission-free ETFs and 4,100 commission-free mutual funds to choose from
- Volume discounts for traders trading high volumes
- Less suited to beginner investors
Best for customized rob-advisory
M1 Finance is a unique Robo-advisor offering you a tinge of customization in your automated portfolios. M1 works on a system called pie, wherein each pie is a portfolio created out of a diverse mix of assets. You can choose from tons of pre-built pies or create one of your own to put in your Roth IRA.
- No minimum investment requirement
- No trading fees on creating and selecting pre-built pies
- Customized Robo-advisor
- Live customer support only limited to business hours
- Limited options (only stocks and ETF) to put in pies
Best for overall Peer-to-peer lending
Lending clubs offer a non-traditional mode of investing by providing exposure to high-risk fixed income portfolios. These portfolios primarily consist of peer-to-peer (P2P) loans. Due to the high-risk nature of investments P2P lending, there are state-wise restrictions on various matters.
- Offers alternative investment opportunity in P2P lending
- Tools and screeners available to select the loans you want to invest in
- Higher returns as compared to other traditional investments
- No account maintenance fee but a 1% management fee on your investment earnings
- Lending Club IRA requires a minimum investment of $6,000
- Illiquid investment requiring a locking of at least 36 months
- Not available in Alaska, New Mexico, North Carolina, Ohio or Pennsylvania
Roth IRAs are great investment vehicles to save for retirement. With a range of investment alternatives available, you can choose risk-free savings accounts for high-risk P2P lending and real estate portfolio. You must analyze your objectives and risk tolerance before choosing the broker and the asset class you will be investing in.
The above list is an exhaustive resource for both hand-off and hand-on investors. An average investor will do well by choosing a good mix of ETFs and mutual funds in his portfolio, while an informed investor can go up the risk ladder and choose from riskier investments.
No matter which asset class you choose, with enough contributions and time, the account can grow multifold, delivering a bounty to the investor at retirement. This multifold corpus can then be withdrawn tax-free, providing you with the money right when you need it the most.