Disclosure: TheSimpleDollar.com has an advertising relationship with some of the offers included on this page. However, the rankings and listings of our reviews, tools and all other content are based on objective analysis. For more information, please check out our full Advertising Disclosure. The offers that appear on this site are from companies from which TheSimpleDollar.com receives compensation. All products are presented without warranty and all opinions expressed are our own.
The 8 best Roth IRA accounts of 2020
- TD Ameritrade Roth IRA: Best for individual management
- Merrill Edge Roth IRA: Best for researching
- Fidelity Roth IRA: Best for mutual funds
- Betterment Roth IRA: Best for managed accounts
- Vanguard Roth IRA: Best for returns
- Charles Schwab IRA: Best for beginners
- Ally IRA: Best for flexibility
- E*TRADE IRA: Best for balance
|Provider||Minimum Deposit||Online Trading Fee||Promotion|
|TD Ameritrade IRA||$0||$0 on stocks/bonds; $0.65 on options||Up to $600|
|Merrill Edge IRA||$0||$0 on stocks/bonds; $0.65 on options||$100 - $600|
|Fidelity IRA||$0||$0 on stocks/bonds; $0.65 on options||None at this time|
|Betterment IRA||$0 for standard; $100,000 for premium||0.25% - 0.40% management fee||Up to one year of free management|
|Vanguard IRA||$1,000||$7 - $20||None at this time|
|Charles Schwab IRA||$0||$0 online||None at this time|
|Ally IRA||$100||0.0% - 0.30% management fee||Up to $3,500|
|E*TRADE IRA||$0||$0 on stocks/bonds; $0.65 on options||Up to $600|
TD Ameritrade IRA: Best for individual management
One of the biggest names in banking offers Roth IRA accounts with an attractive $0 minimum starting balance. Investors also get access to more than 4,100 no-transaction-fee mutual funds and $0 online trading fees on stocks and bonds. TD Ameritrade’s Roth IRA is great for beginners because its platform offers a virtual trading simulator where new investors can practice investments before making real-life trades.
Merrill Edge Roth IRA: Best for researching
Similar to other Roth IRA accounts on the list, Merrill Edge offers free stock, bond and ETF trades. The company offers roughly 2,680 transaction-fee-free mutual funds, a smaller selection than TD Ameritrade’s Roth IRA plan. A big perk of Merrill Edge is investors have access to the company’s private research platform, which additionally includes third-party research from companies like Morningstar and Recognia.
Fidelity Roth IRA: Best for mutual funds
Fidelity matches most other options across the board when it comes to account minimums and fees. It does fall a little short when it comes to promotions, though, as at the time of our last checking, it was not offering promotions to customers. Fidelity does earn back credit, though, in its low to no-fee mutual fund offerings. The company was the first to bring no expense ratio market index funds to customers.
Betterment Roth IRA: Best for managed accounts
For those looking for a professional helping hand, you may want to consider Betterment Roth IRAs. The company has two levels to choose from — Betterment Digital, its original offering that comes with no account minimum and a 0.25% management fee. The other option, Betterment Premium, comes with unlimited phone access to certified financial planners but does carry a $100,000 minimum investment and a 0.40% management fee. There is a fee discount available of 0.10% on the portion of your account over $2 million.
Vanguard Roth IRA: Best for returns
Over the past 10 years, 88% of Vanguard’s no-load mutual funds outperformed its respective peer groups. Those looking to have a professionally managed account will like Vanguard’s options as it has a proven track record and lower fund fees on its mutual funds at an average of around 0.10%. You will need at least $1,000 to get started. Additionally, if you’re an active trader, you may want to look elsewhere as Vanguard IRAs do not have commission-free trading.
Charles Schwab IRA: Best for beginners
If you’re new to retirement savings and are looking for a user-friendly experience, you’ll want to check out Charles Schwab. The company not only has one of the best mobile apps in the industry, but it also offers fee-free trades, extensive research data and 24/7 support.
Ally Roth IRA: Best for promotions
Those looking for the biggest available promotions available will want to consider Ally as a candidate. The company is currently offering completely free account management for investors willing to keep 30% or greater of their accounts in cash at all times. While this might not be ideal for some, it could spell significant savings for others, especially those closer to retirement.
E*TRADE IRA: Best for balance
If you’re an investor trying to find a Roth IRA that excels in all categories, E*TRADE is a great fit. The company has fee-free trades, promotions up to $600, a $0 account minimum, extensive research tools and access to over 4,400 no-transaction-fee mutual funds. E*Trade is a great all-around pick backed by an industry-standard name.
What is a Roth IRA?
One of the more popular financial tools for retirement planning created in 1997 and named after Senator William Roth of Delaware is the Roth IRA. Much like a traditional IRA, the Roth is a collection of stocks, bonds, ETFs, CD investments, and more bundled into one account used to plan for retirement. Unlike traditional IRA accounts, though, the Roth diverts its tax advantages to retirement by having the investor pay taxes on the investment now. This is ideal for those who are anticipating being in a higher tax bracket later in life. Due to the significant potential tax benefits of an IRA account, the Internal Revenue Services (IRS) has limited the amount of money individuals can contribute annually to their account.
How should I choose the right Roth IRA?
Choosing the right Roth IRA for you shouldn’t be hard, but it is a significant step in developing your future retirement savings plan. Take the time to weigh what’s most important to you and your family and find the best IRA that links with those goals. Make sure to look at account fees, required minimums, management and trading options and any associated promotions.
The bottom line
Making the decision to start saving for retirement as early in life as possible is almost always the smart move. By doing so through tax-advantaged plans like Roth IRAs, investors can better set themselves and their families up for success. Keep in mind that not all IRAs are created equally, and it’s important you take the time to select the best IRA for your unique needs and situation. Any wise investor will tell you there is no time like the present to start saving for the future.