Whether you want to start building your savings or bolster an existing portfolio, a Roth individual retirement account (IRA) is a smart choice with long-term tax benefits. Because the money you put in it has already been taxed, you won’t pay taxes when you need to withdraw it during retirement. While all Roth IRAs have this benefit, some offer features and rates that set them apart.
With a focus on fees, available investments, and investment tools, we’ve evaluated the top Roth IRA accounts available to help you pick the right one for your retirement goals and needs. Learn more about the best Roth IRAs that will take the best care of your money this year and beyond.
Best Overall : Fidelity
Fidelity ranks as our top overall pick for the best Roth IRA for several reasons. This account has no minimum balance requirements and no recurring account fees. It offers commission-free trades for stocks, ETFs, and more than 3,400 no-transaction-fee mutual funds. Included in that list are four Fidelity funds with no expense ratio—that means the fund doesn’t charge any management fees. That also means you could potentially have the account and hold these funds with no costs at all.
In addition to an excellent investment platform with plenty of included research and investment information, Fidelity offers a suite of calculators, tools, and apps designed to help you improve your finances. Those include the Retirement Score calculator and the newly released Fidelity Spire app. When you put it all together, it’s a package designed to help you succeed in reaching your retirement goals. That makes it a winner on our list of the best Roth IRAs.
No recurring fees and no minimum balance requirements
Free trades for stocks, ETFs, and over 3,400 mutual funds
Mutual funds available with no expense ratio
Extensive research reports and investment data
Free retirement tools, calculators, and apps for Fidelity customers
High cost for some mutual funds with transaction fees
Higher pricing than some competitors for robo advisor balances over $50,000
No access to riskier assets like futures, forex, and cryptocurrencies
Runner-Up, Best Overall : Charles Schwab
Charles Schwab is another provider of Roth IRA accounts with no recurring fees and no minimum balance requirement. Like other Schwab accounts, the Schwab Roth IRA includes commission-free stock and ETF trades as well as access to over 4,200 no-load, no-transaction-fee mutual funds on the Schwab OneSource list.
One huge benefit that Schwab offers over most other Roth IRAs is a robo advising service with no added management fees. Schwab Intelligent Portfolios can choose a set of ETFs for you, based on your age and financial goals, using only low-fee ETFs (you’ll need at least $5,000 to open the account though). That’s a great benefit for those who know little about investing or just want someone else to handle picking specific investments for their accounts.
No recurring fees and no minimum balance
Commission-free trades of stocks, ETFs, and over 4,200 mutual funds
Robo advisor available with no management fees
High fees for commissioned mutual fund trades and broker-assisted trades
Higher costs for hybrid robo advising products with a human advisor
Best for Active Investing : TD Ameritrade
While most Roth IRA owners may be better off with a passive investment plan, those who want to maintain an active Roth IRA account may be best served by TD Ameritrade. Roth IRAs from TD Ameritrade have no minimum balance requirements and no recurring fees. They support free trades of stocks and ETFs as well as about 4,200 mutual funds with no transaction fees.
TD Ameritrade is best for active traders thanks to a combination of platforms. Beginners and more passive traders can use the standard TD Ameritrade web or mobile trading platforms. Experts and active traders will prefer thinkorswim, a desktop, web, and mobile app with features focused on the needs of more active investors, including options traders. You can choose any trading platform in the TD Ameritrade suite with most TD Ameritrade accounts.
In November 2019, Charles Schwab announced that it is acquiring TD Ameritrade. The acquisition is expected to close by the end of 2020. Once closed, it’s likely that TD Ameritrade platforms and Charles Schwab platforms will be combined into one.
No recurring fees and no minimum balance requirements
Commission-free trades for stocks, ETFs, and over 4,200 mutual funds
Choose between powerful active trading platform or other easy-to-use platforms
Pending acquisition by Charles Schwab
High commissions for mutual funds not on the NTF list and high broker-assisted trade fee
Best Robo Advisor : Betterment
Betterment is a large provider of robo advising, which is sometimes referred to as automated investing or managed portfolios. When you sign up for a new Roth IRA with Betterment, you’ll answer some questions about your age and retirement goals. Based on your answers, Betterment will assign you to a portfolio of low-cost ETFs based on award-winning research. A computer will keep your investments in line with that human-designed portfolio.
Betterment charges a 0.25% annual fee based on your account balance. Plans that include access to human financial advisors are available but require a 0.40% annual fee. One-time sessions with a human advisor are available for a one-time charge with the lowest-priced plan. As you invest more over time, Betterment will keep your portfolio in-line with your goals so you can just set it and forget it.
Automated investing based on human-developed portfolios
Portfolios consist of low-cost ETFs
Computer-based investment platform keeps your portfolio balanced over time
Plans available with access to human financial advisors
All plans require paying annual account fees
Access to human financial planners requires an extra fee
Best for Beginners : SoFi
If you are new to investing, SoFi offers a web and mobile experience that’s simple, educational, and unintimidating for newer investors. SoFi Roth IRAs have no recurring fees and a $1 minimum opening balance. You can trade stocks and ETFs with no commissions in a SoFi Roth IRA that’s actively managed. You can also choose a no-fee robo advisor where your investments are managed for you.
While many beginners may opt for free automated investing, those who want to pick their own investments will find it easy to do with SoFi. The SoFi app includes collections of stocks and ETFs to help you discover new investment opportunities. SoFi also offers a few of its own ETFs, but watch out for the long-term fees on those funds, which are higher than some competing ETFs from larger providers.
Active Investing account has no recurring fees and a $1 minimum opening balance
Automated Investing account charges no account management fees
No fees to trade stocks or ETFs
Members get free financial planning sessions
No support for mutual funds
High long-term fees for SoFi ETFs
Limited investment research
|Brokerage||Why We Picked It|
|Charles Schwab||Best Overall Runner-Up|
|TD Ameritrade||Best for Active Investing|
|Betterment||Best Robo Advisor|
|SoFi||Best for Beginners|
What Is a Roth IRA?
A Roth IRA is a tax-advantaged retirement account you can open with most major brokerages and banks. Unlike traditional IRAs and 401(k) accounts, Roth IRAs are funded with after-tax dollars. That means you pay regular income taxes on contributions, but qualified withdrawals in the future are tax-free.
Tax-free capital gains make Roth IRAs better for investors with a longer time horizon before retirement. Those closer to retirement may benefit more from a traditional IRA.
Roth IRA accounts have an annual contribution limit of $6,000 in 2020. That limit jumps to $7,000 for 2020 if you’re age 50 or older.
Income limits also apply. If you file your taxes as married filing separately, single, or head of household, you can contribute the full annual amount to a Roth IRA in 2020 if your modified adjusted gross income (MAGI) is less than $124,000. The contribution limit is then phased out, and you’re not eligible to contribute if your MAGI is $139,000 or more in 2020. Those married filing separately but who lived with their spouse for part of the year can contribute a reduced amount if their MAGI is less than $10,000 (no phaseout).
If you file your taxes as married filing jointly, you can contribute the full annual amount to a Roth IRA this year if your MAGI is less than $196,000. After that, the contribution limit is phased out, and you’re no longer eligible if your MAGI is $206,000 or more in 2020.
How Can I Choose the Right Roth IRA for Me?
Every investor has unique goals and their own investment style and risk tolerance. That means there may not be a perfect Roth IRA account for everyone, but anyone can find the right account for their needs.
When shopping around for the best Roth IRA, consider the account fees, available investments, insights and educational resources, and investment apps and platforms. Depending on your preferences, one of these factors may be more or less important. The key is finding an account with the features you care about most.
How Much Money Do I Need To Open a Roth IRA?
With almost every Roth IRA provider on this list, you can start with no minimum opening balance. If you are willing to put your dollars to work in a Roth IRA, there is a broker willing to take them.
In the old days, many accounts required high starting balances. Our best Roth IRA account providers all feature low balance requirements, if any, to get started.
How We Chose the Best Roth IRAs
To determine the best Roth IRAs, we reviewed accounts from 19 different providers with a main focus on costs and fees, available investments, and the overall investing experience, including investment platforms and available investment research. Based on these criteria, any of the account providers on this list could be a great fit for a wide range of Roth IRA investors.