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In a Roth individual retirement account (IRA), you make post-tax contributions and take tax-free withdrawals during retirement. The best Roth IRA accounts feature fewer fees, more investment options and an outstanding customer experience. We researched the top brokerage firms and chose the best IRA account providers for 2022. Learn more about our methodology here.
How much would you like to invest?
| IRA provider | Advisory fee | Who this provider is 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 nor 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 fees While 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 fees Some 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 fees Some 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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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 and account minimums and considered ease of use and customer support.
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.
If you watch heist movies, you know that even best-laid schemes rarely go according to plan. Luckily, if life throws your grand financial plan off track and you need to withdraw money from your retirement savings, Roth IRAs offer flexibility. The principal — the money that you deposited into a Roth IRA account — is always yours to withdraw penalty-free. If you need to withdraw some of the interest earnings — the money earned from the principal — you will have to pay an additional 10% penalty to the Internal Revenue Service (IRS) on earnings 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 are 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. Don’t throw in the towel if your income is above the IRS cap, though. There are ways to roll money into a Roth IRA through a “backdoor IRA,” which entails opening up a traditional IRA that you then convert to a Roth IRA.
A Roth 401(k) is a retirement plan that many employers offer their workers. The main difference to a traditional 401(k) is that contributions to Roth 401(k)s are made using after-tax dollars, instead of pretax dollars. Additional benefits include tax-free interest earnings and zero income caps.
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.
