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Best Places to Open a Roth IRA in [2022]

·15 min read

If you’re thinking about building your nest egg, opening a Roth IRA is a great place to start. With a Roth IRA, you contribute post-tax dollars now so you don’t have to worry about paying taxes on your withdrawals in retirement.

Many Roth IRA providers let you open an account with no minimum deposit or annual fee. Others may charge a fee but offer more personalized advice or other features.

Several brokerages stood out, including:

  • Stash, which also offers banking access for an integrated experience 1 5 4

  • Merrill Edge, which offers self-directed investing with the support of a traditional brokerage

  • SoFi Invest, which has low fees and access to Certified Financial Planners

  • Wealthfront, which simplifies socially responsible investing

  • Betterment, which offers tax-loss harvesting and automatic portfolio rebalancing

Learn more about these options along with other brokerages to consider.

Take this free quiz to see if you'll be able to retire early.

Best places to open a Roth IRA

No management fees $0 account minimumWhat sets it apartStashMerrill EdgeM1WealthfrontBettermentSoFiTD AmeritradeFidelityE-TradeCharles Schwab/Schwab Intelligent PortfoliosVanguardInteractive BrokersAlly Invest

Stash

Account management fees: 3

  • $3 per month for Stash Growth

  • $9 per month for Stash+ 6

Fees:

  • $1 account minimum

To open a Roth IRA with Stash, you need to choose one of its subscription plans. 1 4 Stash Growth is $3 per month and includes a retirement portfolio, banking access, and potential access to $1,000 in life insurance. 5 Stash+ adds on custodial accounts for children, Stash+ market insights, and potential access to $10,000 in life insurance. 7

If you’re looking for a platform that includes banking access, custodial accounts, and more, Stash could be a good fit.

Visit Stash or

... Learn more in our Stash Review.

Stash
Stash

Get $10 To Start InvestingLearn More

Merrill Edge

Account management fees: $0 8

Account minimums:

  • $0 for Merrill Edge Self-Directed

  • $1,000 for Merrill Guided Investing Online

  • $20,000 for Merrill Guided Investing Online with an advisor

Merrill Edge offers self-directed investing. It’s part of traditional investment and wealth management services company Merrill. Because Merrill is now owned by Bank of America, it might be a convenient option for existing customers of the bank. Merrill Edge also offers in-person assistance at more than 2,200 Bank of America locations.

There’s no fee to open a Merrill Edge self-directed account, and you can make stock, exchange-traded funds, and option trades at no cost. There may be other underlying fees, however.

If you’d like to access Merrill’s Guided Investing programs, however, you’d need a $1,000 account minimum for online advising and a $20,000 minimum for online advising plus direct guidance from an advisor.

Read our Merrill Edge review.

M1

Account management fees: No management fees

Account minimums: $500 account minimum

M1 takes a unique approach to investing, using “pies” as a way to develop and organize portfolios. Put together your own pie or use one of its curated pies based on various investing styles and goals.

M1 offers fractional shares, which means you can buy a portion of a share rather than an entire share. This can help make expensive stocks more accessible or increase the diversity of your portfolio. 2

Visit M1 or

... Find out more in our M1 Finance review.

M1 Finance
M1 Finance

All In one Finance AppLearn More

Wealthfront

Account management fees: 0.25% advisory fee

Account minimums: $500

You’ll need to deposit a minimum of $500 to start investing with Wealthfront. Once you do, however, you can access its automated robo-advising, curated portfolios, and tax-loss harvesting (a strategy to reduce your tax bill) for a fee of 0.25% per year.

Wealthfront offers a wide variety of investment products, including the option to invest in crypto or build a socially responsible portfolio that the company says is designed around sustainability, diversity, and equity. If you like the idea of having a curated portfolio around a sector that interests you, Wealthfront could be a good choice.

Visit Wealthfront or

... Find out more in our Wealthfront review.

Wealthfront
Wealthfront

Investing on AutopilotLearn More

Betterment

Account management fees:

  • 0.25% annual fee for digital investing

  • 0.40% annual fee for premium investing

Account minimums:

  • $0 for digital investing

  • $100,000 for premium investing

As with Wealthfront, Betterment offers automated tax-loss harvesting to reduce your tax bill. It offers robo-advising with automated rebalancing and dividend reinvesting.

Rebalancing means adjusting your portfolio so it stays in line with the asset allocations you want. For example, if you want 70% stocks in your portfolio and your stocks increase in value, you may find yourself with 75% of your portfolio in stocks. Betterment would sell stocks and/or purchase bonds so your portfolio returns to having 70% of its balance in stocks.

With Betterment, you can choose among multiple investing portfolios, such as socially responsible investing or innovative technology.

Betterment’s fees vary depending on the type of account. Betterment charges a 0.25% fee for digital advising and 0.40% for premium investing, which includes unlimited calls and emails with its Certified Financial Planners. You need a minimum of $100,000 to qualify for Premium Investing, however.

Visit Betterment or

... Learn more in our Betterment review.

Betterment
Betterment

Smart Investing for the Long TermLearn More

SoFi

Account management fees: $0 management or commission fees

Account minimums: $0

As with other investment platforms, SoFi lets you choose between an active or automated retirement account. You’ll get access to a range of investment options that don’t charge a commission. If you opt for an automated Roth IRA, SoFi will build a custom portfolio with a mix of stocks and bonds based on your risk tolerance.

You also have the option of speaking with one of SoFi’s certified financial planners to build a retirement savings strategy at no additional cost. Other brokerages require you to have a certain balance to talk with CFPs, so this is definitely a feature that sets SoFi apart.

Given SoFi’s low fees, active and automated investment options, and access to CFPs, it could be a good choice for beginners to investing.

Visit SoFi or

... Learn more in our SoFi Invest review.

SoFi
SoFi

Become An Investor Without Account FeesLearn More

TD Ameritrade

Account management fees:

  • $0 for online stock, ETF, and option trades

  • Fees vary by investment and whether you use broker assistance

Account minimums:

  • $0 for most accounts

  • $2,000 for margin and certain options privileges

TD Ameritrade offers a variety of investment options, including commission-free ETFs, no-transaction-fee mutual funds, and fixed income products. It also provides educational content in the form of videos, webcasts, and tools such as its IRA Selection Tool and Retirement Calculator.

If you’d like to get support in person, you can visit one of TD Ameritrade’s more than 175 branches.

Visit TD Ameritrade or

... Learn more in our TD Ameritrade review.

TD Ameritrade
TD Ameritrade

Trade Commission-free With The #1 Online BrokerLearn More

Fidelity

Account management fees: No account or advisory fees if you choose your own investments (may be underlying fees in some investments)

Account minimums:

  • $0 if you choose and manage your own investments

  • $25,000 for Fidelity Personalized Planning & Advice Roth IRA

It doesn’t cost anything to open a Roth IRA with Fidelity. You can opt for a self-managed Fidelity Roth IRA or a Fidelity Go Roth IRA. If you opt for a Fidelity Go account, you can get robo-advising for free as long as you have less than $10,000 in your account. If you have an account balance of $10,000 to $49,999, your Fidelity Go advisory fee is $3 per month. If it’s more than $50,000, your fee is 0.35% per year.

This automated account management offers an investment strategy based on your financial goals and monthly progress updates. If you opt for Fidelity Go, the robo-advisor will start putting your investment strategy to work once you’ve deposited at least $10.

If you have more to invest and want personalized advice for your Roth IRA investments, you could also opt for Fidelity Personalized Planning and Advice IRA. That requires a minimum investment of $25,000 across your Personalized Planning and Advice accounts and has an advisory fee of 0.50% per year.

Visit Fidelity or

... Learn more in our Fidelity review.

E-Trade

Account management fees:

  • $0 for stocks and ETFs

  • $1 for bonds

  • 50 to 60 cents per contract for options

  • $1.50 per contract for futures

  • Fees vary for mutual funds

Account minimums: $0

E-Trade is another web-based broker that lets you open a Roth IRA at no cost. There’s no fee to trade ETFs or stocks, though fees vary for other investment products such as mutual funds and bonds. It also offers options and futures contracts.

E-Trade also occasionally offers cash bonuses for opening a new account. As of the time of writing, for instance, E-Trade is offering up to $3,500 and $0 commissions for opening a new brokerage or retirement account with a qualifying deposit of $5,000 or more.

Visit E-Trade or

... Find out more in our E-Trade review.

Charles Schwab/Schwab Intelligent Portfolios

Account management fees: $0 commission for listed stocks and ETFs traded online

Account minimums: $0

There's no cost or account minimum to open a Roth IRA with Charles Schwab you manage yourself, and that gives you access to its financial planning tools. You’ll need at least $5,000 in your account to qualify for its robo-advising service, ​​Schwab Intelligent Portfolios, though.

If you opt for a Schwab Intelligent Portfolio, it will build, monitor, and automatically rebalance a diversified portfolio based on your goals. You’ll also have access to 24/7 live support. If you’d prefer to get help in person, you can visit one of Charles Schwab’s more than 300 locations.

Visit Schwab Intelligent Portfolios.

Vanguard

Account management fees:

  • $0 commission to trade stocks and ETFs online

  • $20 annual account service fee (can be waived if you opt for materials to be delivered electronically)

Account minimums:

  • $1,000 for Vanguard Target Retirement Fund or Vanguard STAR Fund

  • $3,000 or more for other funds

Although some brokers let you open a Roth IRA for free, Vanguard requires a minimum deposit of $1,000. Plus, you must deposit at least $3,000 to access its robo-advisor.

If you qualify for Vanguard’s digital advising, Vanguard will invest your money and balance your investments with its ETFs. You can try out the Vanguard Digital Advisor for free for 90 days, but expect to pay up to 0.20% in advisory fees after that.

Visit Vanguard.

Interactive Brokers

Account management fees: $0

Account minimums: $0

Interactive Brokers offers both cash and margin IRAs to help you save for retirement. Its margin accounts let you trade multiple currencies and currency products, which makes it potentially appealing to investors who are active in global markets. With this platform, you can fund your account in 24 currencies.

Visit Interactive Brokers.

Ally Invest

Account management fees:

  • $0 annual fee

  • 0.30% annual advisory fee for market-focused robo portfolio

Account minimums:

  • $0 for self-directed trading

  • $100 for robo portfolio

Ally Invest offers low fees on its Roth IRA. It doesn’t charge an annual or monthly maintenance fee, nor does it charge a transfer fee for a rollover IRA. Plus, you don’t have to worry about commission fees on eligible U.S.-listed stocks, ETFs, or options or an advisory fee for cash-enhanced robo portfolios. There is a 0.30% annual advisory fee for market-focused robo portfolios.

You can choose between Ally Invest’s self-directed account (no account minimum to start) or its robo portfolio ($100 account minimum).

Visit Ally Invest.

What is a Roth IRA?

A Roth individual retirement account, or IRA, is a tax-advantaged retirement savings account. With a traditional IRA, you may be able to take a tax deduction on the funds you contribute.

When you open a Roth IRA, you contribute post-tax dollars and typically don’t have to pay income taxes on your qualified withdrawals in retirement. This means you don’t take a tax deduction when you contribute to the IRA. This structure is the opposite of a traditional IRA, which has you contribute pre-tax dollars and pay taxes on withdrawals later in life.

Roth IRAs are also unique because they don’t typically need to take required minimum distributions in retirement. If you have other sources of income, you could even leave your Roth IRA savings untouched, perhaps to pass down to your heirs. What’s more, you can withdraw your contributions at any time without penalty, because you already paid taxes on the amount.

However, you’ll have to wait until you’re 59 1/2 and have held the account for at least five years before you can start taking tax-free withdrawals of your earnings. If you withdraw your earnings early, you could be subject to an early withdrawal penalty.

Because Roth IRAs have you pay taxes upfront, they could be a good option for investors who expect to have a higher tax rate in the future than they do now.

Who can contribute to a Roth IRA?

Although anyone can contribute to a traditional IRA, Roth IRAs have eligibility requirements.

You’re not allowed to contribute to a Roth IRA if:

  • You’re married filing jointly and have a modified adjusted gross income of $214,000 or more

  • You’re single and have an MAGI of $144,000 or more

  • You’re married filing separately, lived with your spouse during the year, and have am MAGI of $10,000 or more

If you exceed these income limits and still want to access the benefits of a Roth IRA, you might be able to do a Roth IRA conversion, also known as a backdoor Roth IRA. A Roth IRA conversion allows you to contribute money to a traditional IRA and then convert it into a Roth. These conversions do have tax consequences, however.

What are the Roth IRA contribution limits?

For the 2022 tax year, you can contribute up to $6,000 per year to a Roth IRA, plus an additional $1,000 if you’re age 50 or older.

How to choose a Roth IRA provider

There are quite a few options when it comes to choosing a Roth IRA provider, so you want to find the trading platform that best meets your needs. Here are a few factors to consider when choosing where to open your Roth IRA account.

  • Customer support and resources: The best Roth IRA providers offer helpful and accessible customer support, as well as a hub of educational resources you can use to educate yourself on retirement and investing money.

  • Account minimums: If you want to start small, look for a Roth IRA provider that doesn’t have a minimum deposit requirement.

  • Access to a financial advisor or robo-advisor: This may be helpful if you want some assistance managing your portfolio, though it’s worth noting that these services typically come with higher fees than self-directed accounts.

  • Investment options: Some providers offer a greater range of financial products than others, though most let you invest in ETFs, mutual funds, index funds, and stocks.

  • Fees/expense ratios: Keep an eye out for pricing. Trading fees, account fees, management fees, and other costs could cut into your earnings.

Why we chose these investment platforms

To select the best places to open a Roth IRA, we researched online brokers and considered factors such as the account management fees, account minimums, reputation, and available investments. We did not include all brokerage accounts available.

FAQs

What is the minimum age to open a Roth IRA?

You typically need to be 18 years or older to open a Roth IRA. However, a parent may be able to open a Roth IRA for their child if they serve as a custodian of the account.

How many Roth IRAs can you open?

You can open as many Roth IRAs as you like. However, your total contributions among all your accounts can’t exceed the annual limit of $6,000 (or $7,000 if you’re 50 or older).

Is it good to open a Roth IRA at a bank?

There may be both pros and cons to opening a Roth IRA at a bank. On one hand, it might be more convenient to open your Roth IRA account at an institution with which you already hold an account with. Plus, the Federal Deposit Insurance Corp. (FDIC) typically insures depository bank accounts (not investment accounts) for up to $250,000. However, some Roth IRA accounts at banks have limited investment options.

Bottom line

Saving for retirement takes time, so the earlier you start, the better off you’ll be. Although investing always involves some risk, starting early could help you weather ups and downs in the market. Plus, you’ll get to enjoy the power of compound interest over time.

If you’re new to investing, take some time to learn how to invest in stocks and consider your retirement goals. And if you’d prefer not to cherry-pick individual investments, consider investing in an index fund that tracks an established stock market index, such as the S&P 500 or the Dow Jones.

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