Best Roth IRA Account Providers
Once you’ve made the decision to contribute to a Roth IRA, how do you go about selecting the best Roth IRA account provider? What are the most important things to consider? There are several features that any IRA account you open should have, regardless of how experienced an investor you are:
- Low cost, commission-free mutual funds and/or ETFs
- Reasonable account minimums (below $1,000)
- Basic banking products (check writing and debit cards)
- No account inactivity fees
All of our IRA account recommendations at the bare minimum have these features. To determine which IRA provider is best for you should depend on what kind of investor you are. We have broken down the most common categories that people fall under below:
Best Overall IRA Account
Variety of low cost and commission-free mutual funds and ETFs, comprehensive research and analytics tools, and hundreds of local branches
TD Ameritrade is consistently ranked at the top of many of our broker reviews for a reason: it is one of the few brokers that is compatible with the needs of beginner and experienced investors alike. Those who value in-person interaction can go to one of their over 500 branches to receive personal guidance. For investors who are more sophisticated and want to take a more active role in managing their portfolio, TD Ameritrade offers many useful features such as their weekly market research reports and easy-to-use mutual fund and ETF screeners. That said, if TD Ameritrade doesn’t fit your needs, we highlighted several other IRA account providers below that are also quality options.
Roth IRA Accounts For First-Time Investors
Large selection of low cost mutual funds and ETFs with useful educational tools and local branches
If you are opening your very first retirement account, the most important things to consider are: 1) the availability of index funds or ETFs with low fees, and 2) quality customer service that can guide you through the process of opening and managing your account. Scottrade and E*Trade provide both of these. They also offer complete online education centers with in-depth tutorials on basic investing topics.
Scottrade is a better option for those who want accessible in-person interaction and quality customer service. Scottrade’s customer service is consistently well-reviewed, and was recently voted as having the highest rate of customer satisfaction by a JD Power & Associates survey. E*Trade has better research offerings than Scottrade, as it provides access to S&P, Credit Suisse, and Morningstar research reports.
Roth IRA Accounts For Active Investors
Cheap commissions for frequent traders plus research & data tools
For those who want to trade frequently, both TradeKing and Optionshouse offer low commissions, customizable trading platforms, and tools such as stock screeners and volatility charts. Optionshouse is a niche options brokerage, and if you are simply looking for a platform to inexpensively trade stocks and options, Optionshouse can be a good choice. Optionshouse does provide access to thousands of mutual funds, but does not offer no-transaction fee mutual funds. Also, mutual fund trades can only be phoned in, making Optionshouse a poor choice for those who want to invest in mutual funds and more appropriate as a side account for stock and options trading.
TradeKing has broader appeal than Optionshouse and supports a similar number of mutual funds, but allows trades to be executed online. It also offers an investor community forum, no transaction fee mutual funds, and comprehensive educational resources. TradeKing’s tools, such as its stock, ETF, and mutual fund screener, are better designed for investors who trade across a variety of asset classes.
Roth IRA Account For Index Funds
Best selection of low-cost index funds
Vanguard is credited with creating the first index fund for individual investors. The Vanguard 500 Index Fund provides an extremely low-cost way to gain diversified exposure to the U.S. equity market. Their expense ratio of 0.17% is 84% lower than the industry average. For retirement investors who want to simply hold onto a few low-cost stock or bond index funds, Vanguard is a great choice. That said, Vanguard does charge a $20 commission on stock trades, so it is not appropriate for those who want to trade stocks.