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12 Best Roth IRA Accounts of December 2019

Andrea Coombes, Dayana YochimOctober 15, 2019

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Our picks for

Hands-On Investors

Merrill Edge IRA

on Merrill Edge's website

Merrill Edge IRA

Merrill Edge IRA

Fees

$0

per trade

Account Minimum

$0

Promotion

Up to $600

cash credit with qualifying deposit

on Merrill Edge's website


Promotion

Up to $600

cash credit with qualifying deposit

Why we like it

Merrill Edge offers high-quality customer service, robust research and low fees — all with no account minimum. Customers of parent company Bank of America will love the seamless, thoughtful integration, with a single login to access both accounts.

Pros

  • Robust third-party research.

  • Free trades for Preferred Rewards clients.

Cons

  • $2.95 trade commission.

  • Minimum balance requirement for high-end platform.

Read Full Review
TD Ameritrade IRA

on TD Ameritrade's website

TD Ameritrade IRA

TD Ameritrade IRA

Fees

$0

per trade

Account Minimum

$0

Promotion

$100-$600

in cash bonus with a qualifying deposit

on TD Ameritrade's website


Promotion

$100-$600

in cash bonus with a qualifying deposit

Why we like it

TD Ameritrade’s $0 commissions, $0 account minimum, wealth of free research and retirement planning tools, and plentiful lineup of no-transaction-fee mutual funds make it an ideal place to set up an IRA. Its library of educational resources and free paper trading account are also great features to help investors hone their skills.

Pros

  • $0 account minimum.

  • Large lineup of no-transaction-fee mutual funds.

  • Good customer support.

  • Commission-free stock, ETF and options trades.

Cons

  • Costly broker-assisted trades.

  • High short-term ETF trading fee.

Read Full Review
E*Trade IRA

on E*Trade's website

E*Trade IRA

E*Trade IRA

Fees

$0

per trade

Account Minimum

$0

Promotion

Up to $600

in cash bonus with a qualifying deposit

on E*Trade's website


Promotion

Up to $600

in cash bonus with a qualifying deposit

Why we like it

Retirement investors will find a lot to love with E-Trade’s IRA offering, including a large line-up of no-trading-fee mutual funds and an extensive library of retirement advice and tools. Plus, there’s no minimum account balance and no fee for stock or ETF trades.

Pros

  • No minimum balance.

  • Extensive research and tools.

  • Commission-free stock, ETF and options trades.

  • 4,400+ no-transaction-fee (NTF) mutual funds.

Cons

  • $19.99 cost for trading non-NTF mutual funds.

Read Full Review
Interactive Brokers IBKR Lite

on Interactive Brokers's website

Interactive Brokers IBKR Lite

Interactive Brokers IBKR Lite

Fees

$0

per trade

Account Minimum

$0

Promotion

None

No promotion available at this time

on Interactive Brokers's website


Promotion

None

No promotion available at this time

Why we like it

Interactive Brokers' IBKR Lite is a strong option for frequent traders: The broker offers international trade capabilities, no stock-trading commission and a quality trading platform.

Pros

  • Commission-free stock and ETF trades.

  • Large investment selection.

  • Strong research and tools.

  • Over 4,000 no-transaction-fee mutual funds.

  • No inactivity fees on IBKR Lite.

Cons

  • Website is difficult to navigate.

  • Access to advanced platform requires IBKR Pro.

Read Full Review

Our picks for

Hands-Off Investors

For people who want to invest for retirement but don’t want to worry about managing their portfolio over time, a robo-advisor is an easy choice. Generally, robo-advisors hire investment pros to develop a handful of portfolios aimed at different types of investors. Here are our top three picks for investors who prefer help with management:

Wealthfront IRA

on Wealthfront's website

Wealthfront IRA

Wealthfront IRA

Fees

0.25%

management fee

Account Minimum

$500

Promotion

$5,000

amount of assets managed for free

on Wealthfront's website


Promotion

$5,000

amount of assets managed for free

Why we like it

Wealthfront takes the hassle out of IRA investing. The robo-advisor manages accounts by constructing portfolios out of low-cost ETFs, with a flat and low-cost fee structure that appeals to investors seeking a hands-off approach. What’s more, the company has built client trust by offering free management on the first $5,000 invested (for NerdWallet readers).

Pros

  • First $5,000 managed free (for NerdWallet readers).

  • Automatic rebalancing.

  • Digital financial planning tools.

  • Low management fee.

Cons

  • No large-balance discounts.

  • No access to human advisors.

  • No fractional shares.

Read Full Review
Betterment IRA

on Betterment's website

Betterment IRA

Betterment IRA

Fees

0.25%

management fee

Account Minimum

$0

Promotion

Up to 1 year

of free management with a qualifying deposit

on Betterment's website


Promotion

Up to 1 year

of free management with a qualifying deposit

Why we like it

With its low-cost ETFs, automatic rebalancing, extensive tax strategies and retirement advice, Betterment is a strong bet for retirement investors. Betterment’s planning tools include advice on “asset location” — which types of investments are best for different types of accounts — and investors can sync outside accounts, as well.

Pros

  • No account minimum.

  • Robust goal-based tools.

  • Fractional shares limit uninvested cash.

  • Low management fee.

Cons

  • $100,000 minimum and higher fee for access to financial advisors.

Read Full Review
SoFi Automated Investing

on SoFi Wealth's website

SoFi Automated Investing

SoFi Automated Investing

Fees

0%

management fee

Account Minimum

$0

Promotion

Free

career counseling plus loan discounts with qualifying deposit

on SoFi Wealth's website


Promotion

Free

career counseling plus loan discounts with qualifying deposit

Why we like it

SoFi Automated Investing is great for beginning, cost-conscious investors who favor a hands-off approach. Plus, as a customer, you could be eligible for bonuses on other SoFi products.

Pros

  • Broad range of low-cost investments.

  • Free management.

  • Automatic rebalancing.

  • Customer support.

  • Access to certified financial planners.

Cons

  • Limited account types.

  • No tax-loss harvesting.

Read Full Review

Want to compare more options? Here are our other top picks:

Summary of Best Roth IRA Accounts of December 2019

BrokerCommissionsPromotionAccount MinimumLearn More
Merrill Edge IRA Logo

Merrill Edge IRA

on Merrill Edge's website

$0

per trade

Up to $600

cash credit with qualifying deposit

$0

on Merrill Edge's website

TD Ameritrade IRA Logo

TD Ameritrade IRA

on TD Ameritrade's website

$0

per trade

$100-$600

in cash bonus with a qualifying deposit

$0

on TD Ameritrade's website

E*Trade IRA Logo

E*Trade IRA

on E*Trade's website

$0

per trade

Up to $600

in cash bonus with a qualifying deposit

$0

on E*Trade's website

Interactive Brokers IBKR Lite Logo

Interactive Brokers IBKR Lite

on Interactive Brokers's website

$0

per trade

None

No promotion available at this time

$0

on Interactive Brokers's website

Vanguard Logo

Vanguard

$7.00

per trade

None

no promotion available at this time

$0

Read review
T. Rowe Price Logo

T. Rowe Price

$19.95

per trade

None

no promotion available at this time

$2,500

Read review
Fidelity IRA Logo

Fidelity IRA

$0

500

free trades with a qualifying deposit

$0

Read review
Charles Schwab IRA Logo

Charles Schwab IRA

$0

per trade

None

No promotion at this time

$0

Read review
Wealthfront IRA Logo

Wealthfront IRA

on Wealthfront's website

0.25%

management fee

$5,000

amount of assets managed for free

$500

on Wealthfront's website

Betterment IRA Logo

Betterment IRA

on Betterment's website

0.25%

management fee

Up to 1 year

of free management with a qualifying deposit

$0

on Betterment's website

SoFi Automated Investing Logo

SoFi Automated Investing

on SoFi Wealth's website

0%

management fee

Free

career counseling plus loan discounts with qualifying deposit

$0

on SoFi Wealth's website

Ally Invest IRA Logo

Ally Invest IRA

$0

per trade

Up to $3,500

in cash bonus with a qualifying deposit

$0

Read review
BrokerCommissionsPromotionAccount MinimumLearn More
Merrill Edge IRA Logo

Merrill Edge IRA

on Merrill Edge's website

$0

per trade

Up to $600

cash credit with qualifying deposit

$0

on Merrill Edge's website

TD Ameritrade IRA Logo

TD Ameritrade IRA

on TD Ameritrade's website

$0

per trade

$100-$600

in cash bonus with a qualifying deposit

$0

on TD Ameritrade's website

E*Trade IRA Logo

E*Trade IRA

on E*Trade's website

$0

per trade

Up to $600

in cash bonus with a qualifying deposit

$0

on E*Trade's website

Interactive Brokers IBKR Lite Logo

Interactive Brokers IBKR Lite

on Interactive Brokers's website

$0

per trade

None

No promotion available at this time

$0

on Interactive Brokers's website

Vanguard Logo

Vanguard

$7.00

per trade

None

no promotion available at this time

$0

Read review
T. Rowe Price Logo

T. Rowe Price

$19.95

per trade

None

no promotion available at this time

$2,500

Read review
Fidelity IRA Logo

Fidelity IRA

$0

500

free trades with a qualifying deposit

$0

Read review
Charles Schwab IRA Logo

Charles Schwab IRA

$0

per trade

None

No promotion at this time

$0

Read review
Wealthfront IRA Logo

Wealthfront IRA

on Wealthfront's website

0.25%

management fee

$5,000

amount of assets managed for free

$500

on Wealthfront's website

Betterment IRA Logo

Betterment IRA

on Betterment's website

0.25%

management fee

Up to 1 year

of free management with a qualifying deposit

$0

on Betterment's website

SoFi Automated Investing Logo

SoFi Automated Investing

on SoFi Wealth's website

0%

management fee

Free

career counseling plus loan discounts with qualifying deposit

$0

on SoFi Wealth's website

Ally Invest IRA Logo

Ally Invest IRA

$0

per trade

Up to $3,500

in cash bonus with a qualifying deposit

$0

Read review

How (and why) to open a Roth IRA

Opening a Roth IRA is easy: You’ll need to provide some personal information, including your birthdate and Social Security number, but that’s about it.

With a Roth, you can withdraw your contributions at any time without paying taxes or penalties. In that way, Roths can act as a backup emergency savings account. Plus, once you’re retired, there are no required minimum distributions, as there are with traditional IRAs. One thing to know: There are income limits for funding a Roth IRA — see the FAQs below.

Even if you have a 401(k) or another workplace plan, it can make sense to save in a Roth IRA — as long as you also make sure to get any company 401(k) match you may be offered — because a Roth IRA account often offers more investment choices. This is important because your investment returns will have a big impact on your savings over time.

Say you put $500 every month into a Roth IRA (which would total the annual maximum of $6,000). If you earn an annual average return of 8%, that gets you about $475,000 after 25 years. Even if you earn a more conservative 6%, you would end up with over $345,000 after 25 years.

Need more help with this process? See our guide on Roth IRAs.

Choose your investment style

Pick the investor type that describes you so we can point you toward the best provider for your situation:

  • I’m a “do-it-yourself” investor. You can open a Roth IRA at an online broker, then choose your own investments (this may be simpler than you think — you can build a diversified portfolio with just three or four mutual funds). With the providers detailed below, you generally won’t pay an account fee (though that may require your agreeing to electronic document delivery or maintaining a minimum account balance), so the primary costs you need to watch for are trading commissions and investment fees, which are also called expense ratios
  • I’m a “manage it for me” investor. If you would rather have someone pick an investment portfolio for you, you can open your Roth IRA at a robo-advisor. Robo-advisors are online investment services that build and maintain a diversified portfolio for you. You pay a small fee for the service, but the fees tend to be substantially lower than for a human financial advisor — typically 0.25% to 0.50% of the assets under management annually. These services are growing rapidly: One of our top robo-advisor picks, Wealthfront, has over $11 billion in assets under management.

Roth IRA FAQs

What is the best bank for a Roth IRA?

As you can see, our roundup of the best Roth IRAs focuses on accounts offered by brokers and robo-advisors — not banks. Generally, a broker or robo-advisor is a better option than a bank for a Roth IRA account. That’s because, for a long-term goal like retirement, you want to harness the power of the stock market to help your account get bigger.

Bank Roth IRAs generally offer access to savings products, such as certificates of deposit. CDs are savings vehicles that guarantee a rate of return as long as you leave your money in for a specific period of time. Historically, stock market returns average about 10% a year. CDs are currently offering about 3%.

Of course, those higher stock market returns come with the risk that, in any given year, your account may lose value. But investors who leave their money in the market, even through those down days, enjoy hefty average gains over time.

If, despite the much lower rate of return, you decide to go with a bank for your Roth IRA account, be sure to pick among the accounts with the best IRA CD rates so you know you’re getting the best possible rate of return for that type of account.

Is it a good idea to invest in a Roth IRA?

The short answer? Yes, it’s almost always a good idea to invest in a Roth IRA account.

Roth IRAs offer a sweet tax benefit for retirement savers. Plus, you can withdraw your contributions at any time, without penalty, which means a Roth can act as a backup emergency fund.

Keep in mind that Roth IRAs don’t offer an immediate tax break. Your investment earnings grow tax-free in the Roth IRA account, and you never pay taxes on those earnings, assuming you follow the withdrawal rules.

Now, if your tax rate is the same when you contribute to the account as it is later, when you withdraw the money, then a Roth IRA and a traditional IRA offer essentially the same benefit. The only difference is the timing of your tax bill — with a traditional IRA you pay your tax bill later and with a Roth you pay your tax bill upfront.

But many people find that their tax rate changes over time. If your tax rate is likely to be higher in the future — that’s often the case for young adults who are just starting out in their careers — then a Roth makes sense, because you pay the income tax on your contributions now, when your tax rate is lower.

Of course, it can be really hard to know what your future tax rate will be, especially if retirement is decades away, so it can make sense to contribute both to a 401(k) or traditional IRA, and to a Roth IRA, if you qualify.

No matter what, if you have a 401(k) or other workplace retirement plan, contribute enough to get the match — that’s free money you don’t want to pass up.

How much do Roth IRAs earn?

How much you earn in a Roth IRA account will vary, depending on what you’re investing in. The average annual stock market return historically has been about 10%.

Of course, you want to invest in a diversified portfolio of both stocks and bonds, so that your account has a buffer from the stock market’s inevitable ups and downs. Generally, creating a diversified investment portfolio means investing in a handful of mutual funds or exchange-traded funds, which, in turn, invest in a broad swath of stocks and bonds.

A diversified investment portfolio will inevitably earn less than the stock market’s return, because bond yields tend to be in the single digits. Still, a diversified portfolio of stocks and bonds generally earns more than any bank savings product, such as a savings account or CD.

Do I qualify for a Roth?

The Roth IRA has income rules for contributions. For 2019, the amount you can contribute begins to phase down at $122,000 in annual income for single filers and $193,000 for those married filing jointly. (For 2018, phase downs begin at $120,000 and $189,000.) The contribution limit is slowly reduced until your ability to contribute is eliminated completely. If your income is above these amounts, our Roth IRA calculator tells you your contribution limit.

With a traditional IRA and a Roth IRA, the contribution limit is a shared limit — you can contribute a total of up to $6,000 per year ($7,000 if age 50 or older), and it’s up to you to decide how you want to divvy that up between the two.

How easily can I access money in my Roth IRA?

With a Roth IRA, you can pull your contributions out at any time — remember, you’ve already paid taxes on that money.

However, if you withdraw your investment earnings, you may owe income tax and/or a 10% penalty, depending on how old you are and how long you’ve owned the account. But there are quite a few situations where an early withdrawal of investment earnings is exempt from penalties and income tax. We detail those exceptions here.

How much can I contribute to a Roth?

In 2019, you can contribute up to $6,000 a year, or $7,000 if you’re 50 or older, unless your contribution is reduced by the income rules noted above. The contribution limit applies only to new contributions to the account, not rollovers.

Can I contribute to a Roth IRA if I already have a 401(k) or a traditional IRA?

Yes. You can have both a Roth IRA and a 401(k) and contribute the maximum you’re allowed to each.

Traditional IRAs don’t have income limits, but if you’re also covered by a workplace retirement plan like a 401(k), the amount of your contribution that you can deduct may be phased down or eliminated.

That means you can still make the maximum annual contribution, but a portion or all of it will be considered a nondeductible contribution. There’s no immediate tax benefit on nondeductible contributions, but you're still able to defer taxes on investment income until retirement. Read more about the traditional IRA deduction limits.

How do I open a Roth IRA?

The process is easy as can be: You can open a Roth IRA at any online broker or robo-advisor, typically online in about 15 minutes. You’ll need to provide some personal information like your name, address, birthday, Social Security number and means of funding the account, so have that handy. Here’s our step-by-step guide to opening a Roth IRA, including details about how to fund and invest the account.

How will my Roth IRA grow?

Unlike savings accounts, Roth IRAs don’t pay a set interest rate or return. Once you’ve put money into the account, you need to select investments; otherwise, your money will sit in cash, which isn’t ideal for a long-term goal like retirement. Most Roth IRA providers offer a wide range of investment options, including individual stocks, bonds and mutual funds.

If that sounds out of your league, you can open your Roth IRA at a robo-advisor — like the two mentioned above — which will manage your investments for you for a small fee.

Last updated on October 15, 2019

Methodology

NerdWallet's ratings for brokers and robo-advisors are weighted averages of several categories, including investment selection, customer support, account fees, account minimum, trading costs and more. Our survey of brokers and robo-advisors includes the largest U.S. providers by assets under management, plus notable and/or emerging players in the industry. Factors we consider, depending on the category, include advisory fees, branch access, user-facing technology, customer service and mobile features. The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

To recap our selections...

NerdWallet's Best Roth IRA Accounts of December 2019