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Best Roth IRA Accounts: 2018 Top Picks

Brokers, Investing, IRA

NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent.

We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers.

The Roth IRA is a unique addition to your retirement savings plan, giving you a pot of tax-free income in retirement. There are other perks, too (see our post on Roth IRAs for more). But if your income is lower now than you expect it will be in the future, a Roth IRA is probably right for you.

Opening an account is easy — whether it’s your first individual retirement savings account or if you’re looking to transfer your existing Roth IRA to a new broker or converting a 401(k) to a rollover IRA. Important factors to consider are fees, investment selection (including commission-free exchange-traded funds (ETFs) and no-transaction-fee mutual funds), account minimums and customer service. Here are our topic picks in these categories and more for best brokers for Roth IRA investors.

Best Roth IRA providers overall

These providers offer a large fund selection, high-quality customer service and reasonable account minimums and fees.

TD Ameritrade and Charles Schwab are ready-made for retirement investors: They offer their customers a large suite of retirement planning tools and resources, alongside impressive no-transaction-fee and commission-free fund selections. Both brokers also have 24/7 customer service, local offices and online and in-branch educational offerings.

TD Ameritrade edges out Schwab slightly when it comes to account minimums, requiring no initial deposit compared with Schwab’s $1,000 minimum. However, Schwab waives its minimum with auto-deposits of at least $100 a month, and offers an impressive selection of index funds with investment minimums of just $100.

» MORE: How to Open a Roth IRA

Best Roth IRA providers with no account minimum

These providers have $0 minimum investment requirements for Roth IRAs.

To size up some additional options alongside our top-choice TD Ameritrade — which also has no account minimum — investors should consider Merrill Edge and E-Trade. Both brokers require no account minimum to access their quality 24/7 customer service, including physical branches (Merrill Edge customers can visit advisors at the more than 2,100 Bank of America locations).

E-Trade, which waives its standard $500 account minimum on IRAs, beats Merrill Edge by offering more than 150 commission-free ETFs. But Merrill Edge may appeal to customers with accounts at its parent company, Bank of America, as the two brands are integrated under a single login.

Best Roth IRA providers for hands-off investors

Robo-advisors Betterment and Wealthfront manage your portfolio for you.

Wealthfront and Betterment are robo-advisors that manage your IRA account for you. Both companies assess your risk tolerance, goals and financial standing via a series of questions, and then build and manage your portfolio of low-cost ETFs.

Betterment leads the independent offerings in this growing industry, largely due to its low costs and robust lineup of retirement planning tools. The company charges a flat 0.25% management fee for its Betterment Digital offering, which includes in-app access to human financial advisors, but investors can select its higher-priced Premium plan that also offers phone access to human advisors.

Wealthfront charges a flat 0.25%, but waives its fee entirely on the first $10,000 invested ($15,000 with a special promotion for NerdWallet readers). For a full comparison of the two services, check out our post on Wealthfront vs. Betterment.

Best Roth IRA providers for active traders

These brokers offer low commissions, plus extensive research and strong trading platforms.

If you want to dedicate a portion of your IRA to stock trading, here are two pieces of advice: Keep individual stocks to 10% or less of your total portfolio, and look at commissions, research and tools when comparing providers.

Ally Invest offers $4.95 stock trades and has discounted pricing for investors who trade 30 or more times per quarter, charging just $3.95 per trade and 50 cents per options contract.

Interactive Brokers has low commissions (fixed-rate and volume-tiered pricing, starting at $1) along with advanced tools and trading platforms. It has a higher IRA account minimum than most brokers ($5,000), but the company offers a large selection of no-transaction-fee mutual funds and commission-free ETFs, whereas Ally Invest has none.

Best Roth IRA providers for low costs

These providers offer a large selection of mutual funds and ETFs with low expense ratios.

Investors who prioritize low fees and investment expenses — and we think everyone should join this group — should look to Fidelity and Vanguard (though Charles Schwab and TD Ameritrade, our top picks, are also strong contenders here).

Fidelity brings an impressive selection of highly rated funds with expense ratios under 0.50%; many charge no transaction fees or commissions. The downside: The majority of the company’s mutual funds have a $2,500 investment minimum, but in many cases Fidelity waives that with auto-deposits of at least $200 a month.

Vanguard offers a selection of 2,800 no-transaction-fee mutual funds and roughly 70 commission-free ETFs. The company easily beats other brokers on investment expenses: Its funds have an average expense ratio of just 0.18%. Vanguard’s retirement fund minimums start at $1,000.

Note: Some of these promotions won’t apply for first-time depositors, due to Roth IRA contribution limits of $5,500 per year. We’ve tried to include promotions with low deposit requirements where available. 


Summary: Best Roth IRA account providers

Broker
Best
for
Highlights
Commissions
Promotion
Account minimum
Start investing

TD Ameritrade

Overall
Commission-free:
290+ ETFs, 4,100+ funds
$6.95
per trade
Up to $600 bonus and trade commission-free for 60 days
$0

Ally Invest

Ally
Active traders
Competitive commissions, no account minimum
$4.95
per trade
$100 cash bonus or $500 of free trades with a qualifying deposit
$0

E*Trade

E*Trade
No account minimum
Waives $500 account minimum for IRAs
$6.95
per trade; volume discounts
Up to 500 free trades plus cash for qualifying deposits
$0

Merrill Edge

Merrill Edge
No account minimum
First-rate customer service
$6.95
per trade
Up to 300 free trades plus cash for qualifying deposits
$0

Wealthfront

Wealthfront
Hands-off investors
Manages first $10,000 for free
0.25% of account balance
per year
$15,000 managed free (for NerdWallet readers)
$500

Betterment

Betterment
Hands-off investors
Offers phone access to human advisors for a higher fee
0.25%-0.40% of account balance
per year
Up to one year of free management with qualifying deposit
$0

Charles Schwab

Charles Schwab
Overall
Commission-free:
240+ ETFs, 4,300+ funds
$4.95
per trade
$100 referral award for first-time clients
$1,000 (waived with $100 monthly auto-investment)

Interactive Brokers

Active traders
Discounts for frequent traders; among best platforms
$0.005
per share;
min. $1, max. 0.5% of trade value
Special terms for clients 25 and younger
$5,000

Fidelity

Fidelity Investments IRA

Low cost
Commission-free: 91 ETFs,
3,700+ funds
$4.95
per trade
Up to 500 free trades with a qualifying deposit
$0

Vanguard

Vanguard
Low cost
Commission-free: 70 ETFs, 2,800 funds
$2 to $20 per trade depending on account balance
None
$0

Learn more about Roth IRAs

What is a Roth IRA, and why would you want one?

A Roth IRA is a retirement account. Your contributions are made with after-tax dollars, which gives the account two unique benefits:

  1. Unlike with other retirement accounts, contributions can be withdrawn at any time, tax- and penalty-free. What you may be taxed and penalized on is early withdrawals of your investment earnings. Generally, early is defined as before age 59 ½, but read more about the Roth IRA withdrawal rules.
  2. Your money grows tax-free, and distributions in retirement are not taxed. That means as long as you follow the rules for distributions, you’ll never pay taxes on the investment earnings.

You can dig into the details of these benefits and more in our Roth IRA guide, but think of the tax treatment this way: You’re paying taxes on the money you contribute now, locking in your current tax rate and skirting taxes in retirement. Because of that, a Roth IRA is best if you think your tax rate will be higher in retirement. Many younger workers or recent career changers are among those whose tax rates are likely to rise over time.

If your tax rate is higher now than it will be later, you might be better off with a traditional IRA, which gives you a tax deduction on contributions but taxes distributions in retirement. Read about the differences between a Roth and a traditional IRA.

Who qualifies for a Roth?

The Roth IRA has income rules for contributions. For 2018, the amount you can contribute begins to phase down at $120,000 in annual income for single filers and $189,000 for those married filing jointly. (For 2017 phase downs begin at $118,000 and $186,000.) 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 and how those contributions can grow over time.

How much can you contribute to a Roth?

You can contribute up to $5,500 a year, or $6,500 if you’re 50 or older, unless your contribution is reduced by the income limits above. That 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 combine a Roth IRA and a 401(k) and contribute the maximum you’re allowed to each.

With a traditional IRA and a Roth IRA, the contribution limit is a shared limit — you can contribute a total of up to $5,500 per year, and it’s up to you to decide how you want to divvy that up between the two.

How do you 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.

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

Updated January 5, 2018.