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When researching the best way to save for your nonworking years, you likely have come across individual retirement accounts, also known as IRAs.

There are a few different types of IRA accounts and one of the most popular is a Roth IRA. It works much the same as a traditional IRA — you can regularly contribute to the account and watch your investments grow year over year so you have a nest egg to tap in retirement.

But the Roth IRA also offers a few different components that makes it different from a traditional IRA, including limits on who can contribute, the ability to withdraw your earnings in retirement tax-free and other benefits worth considering (see our FAQ for more details).

To determine which Roth IRAs are the best overall, Select reviewed and compared over 20 different accounts offered by national banks, investment firms, online brokers and robo-advisors. For the purposes of this ranking, we focused only on Roth IRAs, though the best providers often overlap with those that offer the top traditional IRAs. (Read Selects list of the best traditional IRAs.)

Our top Roth IRA selections require no (or low) minimum deposit, offer commission-free trading of stocks and ETFs, provide a variety of investment options and have educational resources or tools that accountholders can access.

Here is Selects list of the top Roth IRAs. (See our methodology for more information on how we choose the best Roth IRAs.)

Best Roth IRAs

Roth IRA FAQs

Best overall

Charles Schwab

Information about Charles Schwab has been collected independently by Select and has not been reviewed or provided by Charles Schwab prior to publication.

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One® Brokerage Account. Automated investing through Schwab Intelligent Portfolios® requires a $5,000 minimum deposit

  • Fees

    Fees may vary depending on the investment vehicle selected. Schwab One® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract

  • Bonus

    None

  • Investment vehicles

  • Investment options

    Stocks, bonds, mutual funds, CDs and ETFs

  • Educational resources

    Extensive retirement planning tools

See our methodology, terms apply.

Pros

  • $0 minimum deposit for active investing
  • No commission fees for stock and ETF trades and no transaction fees for over 4,000 mutual funds
  • Offers extensive retirement planning tools
  • Users can get on-demand advice from a professional advisor/Schwab expert
  • Robo-advisor Schwab Intelligent Portfolios® available as a no-fee automated service option (with Premium version available for a fee)
  • Trading platform StreetSmart Edge® available for more active investors
  • 24/7 customer support access by phone or chat
  • Charles Schwab offers over 300 brick-and-mortar branches across the U.S. for face-to-face support

Cons

  • Specific transactions may require commission fee
  • Robo-advisor Schwab Intelligent Portfolios Premium charges a one-time planning fee of $300, then a $30 per month advisory fee. For that price, you get unlimited 1:1 guidance from a CFP, interactive planning tools, plus a personalized roadmap for reaching your goals

Best for beginner investors eager to learn

Fidelity Investments IRA

Information about Fidelity Investments IRA has been collected independently by Select and has not been reviewed or provided by Fidelity Investments prior to publication.

  • Minimum deposit

    $0

  • Fees

    $0 commission fees for stock and ETF trades; $0 transaction fees for over 3,400 mutual funds; $0.65 per options contract

  • Bonus

    500 free trades

  • Investment options

    Stocks, bonds, mutual funds, CDs and ETFs

  • Educational resources

    Tools and calculators that show users their retirement goal progress; Fidelity Five Money Musts online game to teach you about managing money in the real world

See our methodology, terms apply.

Pros

  • $0 minimum deposit
  • No commission fees for stock and ETF trades and no transaction fees for over 3,400 mutual funds
  • Abundant educational tools and resources
  • Offers robo-advisor Fidelity Go (free for balances under $10,000)
  • 24/7 customer service
  • Offers over 100 brick-and-mortar branches across the U.S. for face-to-face support

Cons

  • 0.50% annual fee to speak to a human advisor for accounts under $2 million
  • Some of Fidelitys mutual funds require reaching specific thresholds, i.e. $10,000 (an increase from the previous $1,000 per trade monitoring threshold)
  • Reports of platform outages during heavy trading days
  • Robo-advisor fee is $3 per month for balances between $10,000 and $49,999; 0.35% for balances over $50,000

Best for hands-on beginner investors

Ally Invest IRA

Information about Ally Invest IRA has been collected independently by Select and has not been reviewed or provided by Ally Bank prior to publication.

  • Minimum deposit

    $0 for Self-Directed Trading; $100 for Managed Portfolios robo-advisor

  • Fees

    $0 commission fees for stock and ETF trades; $0.50 per options contract

  • Bonus

    None

  • Investment options

    Stocks, bonds, ETFs, mutual funds, options

  • Educational resources

    Offers informational articles to help users improve their understanding of investment strategies and market trends

See our methodology, terms apply.

Pros

  • $0 minimum deposit for Self-Directed Trading
  • No commission fees for stock and ETF trades
  • Includes charts and calculators to help investors analyze their trades
  • Robo-advisor Managed Portfolios available as an automated service option with four different portfolio types to choose from
  • Offers informational articles about investment strategies and market trends
  • 24/7 live customer service with brokers

Cons

  • Robo-advisor Managed Portfolios requires a $100 minimum deposit
  • Mutual funds may require transaction fee

Best for hands-off beginner investors

Wealthfront

On Wealthfronts secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts

  • Fees

    Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance

  • Bonus

    None

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks

  • Educational resources

    Offers free financial planning for college planning, retirement and homebuying

See our methodology, terms apply.

Pros

  • No trade or transfer fees
  • Good for automated investing
  • Picks investments based on users risk tolerance and time until retirement
  • Offers a cash management checking account with a debit card
  • Tax-loss harvesting to reduce the taxes you pay
  • Wealthfront Invite Program: When a friend funds an investment or cash account through your invite referral link, you’ll get an additional $5,000 managed for free

Cons

  • $500 minimum deposit
  • 0.25% management fee

Best for access to a financial advisor

Betterment

On Betterments secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For Betterment Digital Investing, $0 minimum balance; Premium Investing requires a $100,000 minimum balance

  • Fees

    Fees may vary depending on the investment vehicle selected. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has a 0.40% annual fee

  • Bonus

    Up to one year of free management service with a qualifying deposit within 45 days of signup. Valid only for new individual investment accounts with Betterment LLC

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash

  • Educational resources

    Betterment RetireGuide™ helps users plan for retirement

See our methodology, terms apply.

Pros

  • $0 minimum deposit
  • No trade or transfer fees
  • Good for automated investing
  • Customizes users portfolios around their financial goals, timeline and risk tolerance
  • Users can assign specific investing goals (short- and long-term) to each portfolio and invest using different strategies (less and more risk)
  • Quick and easy to set up account
  • Able to sync external retirement accounts to your Betterment retirement goal so all your accounts are in one place
  • Premium plan users get unlimited access to a financial advisor (otherwise, one-time advisor consultations cost a fee ranging from $199 to $299)
  • Advanced features include automatic rebalancing, tax-saving strategies and socially responsible investing
  • Betterment RetireGuide™ helps users plan for retirement

Cons

  • 0.25% annual account fee
  • 0.40% annual account fee for upgraded premium plan
  • Premium plan requires $100,000 minimum balance

Roth IRA FAQs

Whats the difference between a Roth IRA and a traditional IRA?

A Roth IRA is very similar to a traditional IRA: You can make consistent contributions to your Roth, which will be invested in the market allowing the money to grow over time so you have a healthy savings when you reach retirement age.

But Roth IRAs have a few components that make them stand out from your traditional IRA. Heres what makes them unique:

  • When you withdraw your contributions from a Roth IRA in retirement, those withdrawals are generally tax free (as long as your account has been open for at least five years) and they dont count as income. Withdrawals in retirement from a traditional IRA and 401(k) will be taxed as income.
  • Contributions into a Roth IRA use after-tax dollars, unlike contributions to a traditional IRA or 401(k), which are not taxed. This may be a bigger hit to your finances in the short term, but your money will grow tax free.
  • If you withdraw earnings youve made on investments in a Roth IRA before age 59 and a half, youll incur a 10% early withdrawal penalty and may be subject to income tax.
  • There are exceptions to the early withdrawal penalty on Roth IRAs, including taking out funds for first-time home purchases, college expenses and birth or adoption expenses.
  • Your tax filing status and income level determine whether or not you can contribute to a Roth IRA: if married filing jointly, the annual income threshold is below $208,000; if single, the income threshold is below $140,000; if married filing separately and you lived with your spouse, the income threshold is below $10,000.

We dig into these differences a little bit more in the FAQs below.

Can anyone open a Roth IRA?

Only people below a certain income level can open and contribute to a Roth IRA. This is different from traditional IRAs, where anyone can contribute regardless of how much money they earn.

Given the income limits that come with Roth IRAs, high-earners may not be eligible to open or contribute to a Roth IRA. (There is a loophole to this, however, for high-earners to make contributions indirectly through a backdoor Roth IRA.) Here are the specific income thresholds for 2021:

  • Married filing jointly or qualifying widow(er): Not eligible if your modified adjusted gross income is $208,000 or more
  • Single, head of household or married filing separately (and you didnt live with your spouse at any time during the year): Not eligible if your modified adjusted gross income is $140,000 or more
  • Married filing separately (if you lived with your spouse at any time during the year): Not eligible if your modified adjusted gross income is $10,000 or more

How much should I contribute to my Roth IRA?

When deciding how much money to deposit into your Roth IRA, you are limited to a certain amount each year.

Roth IRAs have the same contribution limits as traditional IRAs, which is the below for 2021:

  • Those under age 50: Total contribution limit to both Roth and traditional IRAs of up to $6,000
  • Those 50 or older: Total contribution limit to both Roth and traditional IRAs of up to $7,000

Roth IRA taxes vs traditional IRA taxes?

With a Roth IRA, you pay taxes on your contributions upfront so you dont have to pay them later when you withdraw money from your retirement fund (as long as your account has been open for at least five years).

This is the biggest difference from a traditional IRA, which lets you delay paying taxes until you withdraw funds later down the road. With traditional IRAs, your contributions are also tax-deductible, up to certain limits, so your contribution reduces the amount you owe in taxes each year.

A good rule of thumb when choosing between the two types of IRA accounts is to consider your tax bracket:

  • Choose a Roth IRA if you expect that youll be making more money in your later years — and thus in a higher tax bracket. It makes more sense to pay taxes today to take advantage of your current low tax rate before it goes up. Plus, since your withdrawals from Roth IRAs dont count as income and arent taxed after 59 and a half, you can count on every dollar in your account when making withdrawals.
  • Choose a traditional IRA if you expect that youll be making less money in your later years — and thus in a lower tax bracket. In this case, it makes more sense to reduce your taxable income in the present, so in theory youll pay less in taxes both now and in the future when your tax rate is lower.

Use an online calculator like this one from Charles Schwab to help you decide between a Roth IRA or a traditional IRA.

Roth IRA withdrawals vs traditional IRA withdrawals?

With a Roth IRA, you have much more flexibility when it comes to withdrawing money from your account before you reach retirement.

Withdrawing from your traditional IRA before age 59 and a half comes at a cost. Youll be taxed, in addition to incurring a 10% early withdrawal penalty fee.

But you can withdraw after-tax contributions from your Roth IRA at any age tax- and penalty-free. With earnings, its a little different.

If you withdraw any earnings youve made on your investments in a Roth IRA before age 59 and a half, you will incur a 10% early withdrawal penalty (and may be subject to income taxes like a traditional IRA). There are some unique exceptions to this early withdrawal penalty on Roth IRAs that include first-time home purchases, college expenses and birth or adoption expenses.

Our methodology

To determine which Roth IRAs are the best for investors, Select analyzed and compared Roth IRAs offered by national banks, investment firms, online brokers and robo-advisors. We narrowed down our ranking by only considering those that offer commission-free trading of stocks and ETFs, as well as a variety of investment options so you can best maximize your retirement savings.

We also compared each Roth IRA on the following features:

  • $0 minimum deposit: Most of the Roth IRAs on our ranking dont have minimum deposit requirements.
  • Low fees: We considered each Roth IRAs fees, commission trading fees and transaction fees.
  • Bonus offered: Some Roth IRAs offer promotions for new account users.
  • Variety of investment options: The more diversified your portfolio, the better. We made sure our top picks offer investments in stocks, bonds, mutual finds, CDs and ETFs. Most also offer options trading.
  • A hub of educational resources: We opted for Roth IRAs with an online resource hub or advice center to help you educate yourself about retirement accounts and investing.
  • Ease-of-use: Whether accessing your Roth IRA via your laptop at home or on your smartphone while on the go, its important to have an easy user experience. We noted when an investment platform excelled in usability.
  • Customer support: Every Roth IRA on our list provides customer service available via telephone, email or secure online messaging.

After reviewing the above features, we sorted our recommendations by their appeal to beginner investors who are likely just starting out in their careers since Roth IRAs are the most effective retirement savings vehicles if youre in a lower tax bracket.

Your earnings on contributions to a Roth IRA depend on any associated fees, the contributions you make to your account and the fluctuations of the market.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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