15 Best Roth IRA Accounts for 2020 (Ultimate Guide)

A Roth IRA is an ideal place to park your retirement savings that can be withdrawn tax-free when you retire.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.

What is a Roth IRA Account?

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.

1. Charles Schwab Roth IRA.

Best overall broker for Roth IRAs

Charles Schwab Roth IRA

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.

Key Positives

  • 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

Key Negatives

  • Advanced research comes at a higher price at Schwab
  • Account closing fee of up to $50

2. Vanguard Roth IRA.

Best for its low-fee structure

Vanguard Roth IRA

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.

Key Positives

  • 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

Key Negatives

  • High commissions on stock trading
  • Account minimum of $1000

3. Betterment Roth IRA.

Best Robo-advisor platform

Betterment Roth IRA

Betterment is one of the largest independent Robo-advisors that provides automated investing at a nominal cost.

Key Positives

  • 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

Key Negatives

  • Higher fees for personalized advice with a human touch

4. Merrill Edge Roth IRA.

Best for accessibility and support

Merrill Roth IRA

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.

Key Positives

  • 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

Key Negatives

  • Higher fees for advisory based and Robo-guided investing

5. TD Ameritrade Roth IRA.

Best for the human touch in investing

TD Ameritrade Roth IRA

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.

Key Positives

  • 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

Key Negatives

  • Minimum investments required for managed portfolios

6. Wealthfront Roth IRA.

Best for Robo-advisor at a nominal cost

Wealthfront Roth IRA

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.

Key Positives

  • Digital advisory based on investor’s objectives and risk tolerance
  • Automated portfolio rebalancing
  • A robust Robo-advising platform for beginners
  • Incentives for young adults to invest
  • Affordable annual fee

Key Negatives

  • Minimum account opening balance of $500
  • Not so suited for hands-on, DIY investors

7. Ally Roth IRA.

Best rates on deposits

Ally Roth IRA

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.

Key Positives

  • Zero minimum investment required
  • Zero commissions of trading stocks, options, and ETFs
  • 24/7 customer service
  • Also, offers managed portfolios
  • Attractively priced saving instruments

Key Negatives

  • High fee on Mutual Funds
  • Transaction limits on IRA savings accounts

8. Fundrise Roth IRA.

Best for Real Estate Investments in Roth IRA

Fundrise 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.

Key Positives

  • 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

Key Negatives

  • Minimum investment of $500
  • Lock-in requirement and penalty on premature withdrawals

9. Fidelity Roth IRA.

Best for the do it yourself (DIY) beginner investor

Fidelity Roth IRA

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.

Key Positives

  • 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

10. E*TRADE Roth IRA.

Best for a basic, no-nonsense Roth IRA

E-Trade 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.

Key Positives

  • 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

Key Negatives

  • A fee of $25 refunds, early withdrawals, and recharacterizations

11. Ellevest Roth IRA.

Best Roth IRA for women in business

Ellevest Roth IRA

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.

Key Positives

  • $0 Account minimum for starting
  • Affordable advisory fee, ranging from 0.25% – 0.5% of assets
  • Unlimited access to financial advisors
  • Goal-based investing

Key Negatives

  • Lack of supported accounts
  • No tax-loss harvesting

12. SoFi Roth IRA.

Best for minimalistic hand-off investors

Sofi Roth IRA

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.

Key Positives

  • A diverse range of low-cost investments
  • Zero management charges
  • Decent customer support
  • Available guidance from Certified financial planners

Key Negatives

  • Lack of supported accounts
  • No tax-loss harvesting

13. Interactive Brokers Roth IRA.

Best for seasoned traders

InteractiveBrokers Roth IRA

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.

Key Positives

  • 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

Key Negatives

  • Less suited to beginner investors

14. M1 Finance Roth IRA.

Best for customized rob-advisory

M1 Finance Roth IRA

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.

Key Positives

  • No minimum investment requirement
  • No trading fees on creating and selecting pre-built pies
  • Customized Robo-advisor

Key Negatives

  • Live customer support only limited to business hours
  • Limited options (only stocks and ETF) to put in pies

15. Lending Club Roth IRA.

Best for overall Peer-to-peer lending

Lending Club Roth IRA

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.

Key Positives

  • 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

Key Negatives

  • 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

Conclusion

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.

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