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Finding the best Roth IRA accounts out of a sea of choices can feel a bit like a fishing expedition. How do you know if you’ve caught a winner before you open an account?
To help you reel in the best Roth IRA account provider for your retirement savings, we’ve done some serious legwork. We’ve reviewed a wide range of features at various providers like opening balance requirements, fees and investment options — all of which can have a serious impact on your experience as an investor. And from there, we’ve chosen the best providers for your Roth for October 2022.
Curious how we chose our picks? Check out our detailed process. For now, here’s MagnifyMoney’s list of the top Roth IRA accounts — including options for active traders and hands-off investors.
| Roth IRA account provider | Advisory fee | Best for... |
|---|---|---|
| Charles Schwab |
| Self-directed investors and investors who prefer conservative robo-advising |
| Fidelity |
| Investors who want to focus on mutual funds |
| Merrill |
| Bank of America customers |
| Ally |
| Investors who want a robo-advisor account with a cash buffer set aside |
| Wealthfront |
| Investors who want a robo-advisor account |
| Betterment |
| Non-self-directed investors |
Schwab |
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Charles Schwab IRAs have no opening or maintenance fees, required account minimums or online commission fees for listed stocks, exchange-traded funds (ETFs) and many mutual funds. Whether you are a newer investor who’d like some great education resources or a more experienced hand who wants consistent market commentary, you can find both at Schwab, plus 24/7 customer service and 300 branches for in-person service and complimentary workshops. Schwab Roth IRA account options
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Other feesWhile many online trades are free, other online trades do come with fees:
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Fidelity |
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Fidelity charges few fees — no management or trading fees — and Fidelity Flex® mutual funds largely have zero expense ratios (though they’re available only in fee-based accounts, like Fidelity Go). You need only $10 to start investing and many of Fidelity’s tools, such as the fund screener, have thoughtful filters to empower investors: You can search by anything from a ticker symbol to lists of socially responsible investments. If you think of a question at midnight, 24/7 customer support is there. Fidelity Roth IRA account options
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Merrill |
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Merrill Edge offers a wide range of investments, market news and research, tools such as a mutual fund expense calculator. As Bank of America owns Merrill, you can integrate your Bank of America account with your Merrill Edge account, transfer money using Zelle® and potentially earn discounts on Merrill Guided Investing and Bank of America loan products. Customer service is available 24/7. Merrill Edge Roth IRA account options You may be able to qualify for a 0.05 percentage point discount on Merrill Guided Investing if you meet average daily balance minimums across Merrill and Bank of America accounts.
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Other feesSome online trades do come with fees:
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Ally |
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Ally Invest offers Roth IRAs with no maintenance fees and commission-free trades on listed stocks, ETFs and options. Its self-directed account has no minimum investment requirement and no annual fees, while its two robo-advisor options give investors a choice: Pay no management fees and keep a 30% cash allocation or pay a 0.30% annual advisory fee. Ally Invest Roth IRA account options
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Other feesSome online trades do come with fees:
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Wealthfront |
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Wealthfront is a robo-advisor investment company that provides curated portfolios that you can accept as-is or further customize. It features tools for goal-based savings, dynamic planning and tax-loss harvesting. It doesn’t charge fees for account opening, closing or withdrawal, trading/commission, account transfer nor its cash account option. Wealthfront Roth IRA account options
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Betterment |
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Betterment offers great tools, including Tax Loss Harvesting+, tax coordination, savings priority, goal tracking and automated features like dividend reinvestment and recurring deposits. There is no minimum deposit and you can customize your portfolio. Betterment’s 0.11% average expense ratio is significantly lower than the national average, which is around 0.41%. Betterment Roth IRA account options
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Before you open a Roth IRA account as your personal retirement plan, take a moment to compare the two most popular IRA types so you choose the best option for where you are today.
Roth IRAs
Traditional IRAs
If you want a bit of help deciding between these two types of IRAs, check out our side-by-side comparison of Roth and traditional IRAs, including when one might be the better fit for your finances.
With many brokers, the answer is zero. You can open an account and begin adding money whenever it suits you. However, some brokers have an account minimum for new clients, so be sure to choose a brokerage with an opening balance requirement that aligns with your investing plans.
No matter how much you decide to deposit when you opening your Roth, you’ll be subject to the same maximum annual contribution limit. For 2022, you can contribute up to $6,000 per year to your Roth IRA (or $7,000 if you’re 50 or older) as long as your income is not above the IRS limits.
Here’s an added bonus: If you open a Roth IRA today and you later find that you no longer meet the income guidelines (congrats on the raise, by the way), you can open a Traditional IRA. The assets in your Roth will continue to grow tax-free and you can keep saving for retirement with your new IRA that’s not subject to income limits.
If you’re thinking of stashing more than the IRS-mandated annual maximum in your Roth, please think twice. It’s not an act to which the IRS takes kindly.
If you make an excess contribution to your Roth, withdraw the excess immediately. If you don’t, you’ll be subject to a 10% penalty for every year you leave the excess in your account. For example, if you contribute $500 too much to your Roth for the year, the IRS will charge you $50 each year the excess remains in your account. Ouch.
For our rankings for the best Roth IRAs for active investors, the most important criteria were trading fees, account minimum, the diversity of investment products offered (stocks, bonds, ETFs and mutual funds) and low account fees (yearly fees, transfer fees and inactivity fees).
For our rankings for the best Roth IRAs for hands-off investors, the most important criteria were management fees, account minimums and we also considered ease of use and customer support options.
Generally speaking, if you think you will be in a higher income tax bracket after you retire than before you retire, you’ll want to invest more in a Roth IRA, which allows you to withdraw earnings tax-free. If you think you will be in a lower income tax bracket in retirement than before retirement, then you’ll want to have more invested in a traditional IRA. We’ve compared Roth and traditional IRAs side by side to help you choose the best option.
With a Roth IRA, your contributions (the money you deposited) are always yours to withdraw penalty-free. If you need to withdraw some of your earnings — the money earned from your contributions — you’ll have to pay an additional 10% penalty to the IRS if you withdraw before age 59 ½ or before the account is five years old. This 10% penalty is in addition to any taxes you have to pay on the withdrawal as normal income.
Roth IRAs are designed for long-term investment. You should be comfortable salting away funds for at least five to eight years, and ideally, until you’re retired. Investing long term provides enough time for funds to grow and to recover in case of market fluctuations.
For 2022, you can contribute up to $6,000 per year to your Roth IRA (or $7,000 if you’re 50 or older) as long as your income is not above the IRS limits.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.
Jenn JonesJenn Jones is a senior writer at MagnifyMoney. She was previously an automotive finance manager and an editor for Standard & Poor’s Money Market Directory. She graduated from the University of Virginia with a B.S. in commerce.
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