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When it comes to investing for retirement, a Roth IRA is one of the best ways to start. That’s because this tax-advantaged account allows you to withdraw your qualified earnings during retirement without paying taxes, which is the opposite of a traditional IRA.
These days, most major brokers and robo-advisors support Roth IRAs. Some alternative investment platforms do as well, so there are many ways to start investing on one.
However, different companies have different rates, features and investments available. That’s why we cover the best Roth IRA accounts so you can choose one that fits your investment goals and needs.
The Best Roth IRA Accounts
As mentioned, most online brokers and robo-advisors allow you to open a Roth IRA, as well as other types of tax-advantaged accounts.
Below are some of our favorite Roth IRA options, each with a “best for” designation for a specific category or function.
TD Ameritrade
Better for: Beginner investors
TD Ameritrade is one of the best Roth IRA account providers, especially if you’re a newer investor who wants excellent customer service and access to branch support. It is also a very competitive independent broker, offering commission-free stock and ETF trading like most of its competitors.
The amount of research you get as a TD Ameritrade The customer is also worth noting, so it also targets more experienced investors. But their 24/7 customer service and access to in-person help is why this is our favorite Roth IRA for beginners.
Loyalty
Fidelity is one of the best all-around brokers, making it a natural contender for where you should open a Roth IRA. with Loyalty, you can trade a range of securities including stocks, bonds, ETFs, mutual funds, options and more. It also has a managed investment option if you want a robo-advisor, ActiveTrader Pro for experienced traders and a personalized planning service.
Customers also have access to a wealth of educational and research tools. If you want a solid broker that allows you to invest in a variety of assets, this is one of the best options.
Charles Schwab
If you want to avoid trading and investment fees, Charles Schwab is one of the best Roth IRA accounts you can turn to. Like most online brokers, it offers commission-free stock and ETF trading. But Charles Schwab also has a free robo-advisor, Schwab Intelligent Portfolios, that makes it stand out.
If that wasn’t enough, it also offers more than 4,000 mutual funds with no transaction fees and many low-cost ETFs in a wide range of categories. In general, this allows you to invest in a range of securities, either actively or passively, without constantly paying trading fees.
vanguard
If you’re researching potential investments for your new Roth IRA, you’ll no doubt come across Vanguard funds. This broker is known for its world-class ETFs and mutual funds, and also has many funds with extremely low expense ratios.
What’s good about Vanguard is its variety of funds. You can invest in a variety of US and international funds, bond market funds, growth funds and many other funds that are popular options for retirement investing.
And if you want to work with a robo-advisor or a human advisor, you can use Vanguard Digital Advisor or Vanguard Personal Advisor services.
Interactive brokers
These days, most of the leading online brokers have commission-free stocks and ETFs. But Interactive Brokers takes things a step further, offering cheaper contract trading options than most of its competitors depending on your monthly trading volume.
It also features more advanced trading tools and some of the best margin rates, again for active and experienced traders. This makes it an excellent choice for your Roth IRA if you plan to trade regularly and want some potential discounts.
Merrill Edge
When it comes to ESG investing, there are few brokers as good as Merrill Edge. It allows you to invest in securities such as stocks, bonds, ETFs and mutual funds like other brokers. But it also offers tools to help you research and invest in ESG-friendly companies or funds. Plus, your portfolio gets an overall ESG score so you can measure how you’re doing.
And because Merrill Edge is part of Bank of America, you can access lots of research, including Bank of America Global Research reports. Throw in their Guided Investment option and Merrill Edge is a complete broker and an excellent choice for opening a Roth IRA.
Front of wealth
Better for: Passive investors
Wealthfront is a leading robo-advisor that is an excellent Roth IRA account provider if you want to invest completely on autopilot. Like other robo-advisors, Front of wealth build low-cost ETF portfolios to match your investment goals and risk tolerance. All you have to do is answer a few questions, fund your account and you’re off to the races.
There is a minimum funding requirement of $500 and Wealthfront charges 0.25% in annual management fees like its main competitor improve. And that rate includes features like automatic rebalancing and tax loss harvesting.
Fundraising
Better for: Real estate investment
Most Roth IRA providers do not allow you to invest directly in real estate. You can avoid this by opening a self-directed IRA with certain companies, but this process can also be more complicated and expensive.
But if you’re looking to add real estate to your Roth IRA, you’re out of luck. With real estate crowdfunding platforms like Fundrise, you can now invest in income-generating real estate with your Roth IRA. And Fundrise only requires $10 to start investing, which makes it very beginner-friendly.
Regarding fees, Fundraising charges 1% annual management costs plus a $125 annual fee for IRAs. Historically, it returns around 8-9% annually, and shareholders earn quarterly dividends from the cash flow that Fundrise’s properties generate.
What to look for in your IRA account
Now that you know some of the best Roth IRA accounts, here are some considerations to keep in mind when choosing where to open your account.
- commissions: Most leading online brokers do not charge trading fees for stocks and ETFs or monthly fees for a Roth IRA. But robo-advisors or alternative investment platforms like Fundrise may have fees, and brokers generally charge account closing fees as well, so always read the fine print to avoid surprise charges.
- Characteristics: What kind of research offerings, investment tools, and other features do you want for your Roth IRA? Some brokers specialize in one area, such as ESG investing through Merrill Edge. But some brokers, like Fidelity, are more comprehensive and cater to a variety of investors.
- Customer service: Having access to IRA specialists and 24/7 phone or email support is another factor you can consider when shopping for a Roth IRA provider.
- Funding requirements: Most online brokers have no funding requirements for a Roth IRA. But robo-advisors and some alternative investment platforms often do.
Methodology
When we created this list of the best Roth IRAs, we considered factors like ease of use, fees, features, and available investments. The companies on our list did not influence their inclusion or position in any way. Rather, this list reflects the research and opinions of our editorial and author team.
There are still many other companies and brokers with Roth IRAs, but we believe these are the best options on the market today.
bottom line
If you think you’ll have a high income in retirement, opening a Roth IRA makes a lot of sense. But it’s also important to work with a broker or robo-advisors who make managing your Roth IRA as easy as possible.
Think about the types of investments you want to make and what practice you want to be in. Hopefully, one of the brokers, robo-advisors, or alternative investment platforms on this list offers the perfect home for your new Roth IRA.
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