Best Roth IRA Accounts for March 2024

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March 9, 2024
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Fidelity and Wealthfront top our list of Roth IRAs that cater to self-directed and hands-off investors, respectively

Fact checked by Matthew M KlammerReviewed by Marguerita Cheng

According to our research, Fidelity offers the best Roth IRA (individual retirement account) account for self-directed investors, and Wealthfront is at the top for hands-off investors. We have been researching Roth IRA accounts since 2019 based on several key factors, including services, calculators and tools, investment options, and additional features.

A Roth IRA is an effective strategy for investors to save for retirement, as it generally offers tax advantages investors can enjoy when it comes time for retirement. Contributions to a Roth IRA are made with after-tax dollars, which investors can then watch grow tax-free and be withdrawn tax-free after age 59½, assuming the account has been open for at least five years. We will cover the best Roth IRAs for both self-directed investors and hands-off investors so you can decide which account is best for your finances.

Best for Self-Directed Investors: Fidelity Investments

Account minimum: $0
Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Online tools: Chatbot and robo-advisor but navigation can be challenging

Why We Chose It

Originally known for its outstanding lineup of mutual funds, Fidelity’s Roth IRA offers customers a well-rounded, full-service platform with a wide range of investment options that can be tailored to fit your portfolio preferences.

Pros & Cons

Pros

No Roth IRA account minimums
Online support via chatbot can address a wide range of inquiries
Wide variety of educational articles and retirement planning features
Investment management flexibility includes robo-advisor, self-directed, and advisor-guided options

Cons

No futures or commodities trading ability
Navigating certain features and tools can be challenging
Non-U.S. citizens or non-residents blocked from account opening

Overview

In addition to the extensive array of self-directed investment options, you can also leverage advisor-guided and digital investment advisor portfolio management strategies. You’ll find that this blend of investment management flexibility combined with Fidelity’s retirement calculators, tools, and reporting features gives a powerful edge to retirement savers at every life stage and level of market experience.

Those just getting started on their retirement journey have access to excellent educational content in a variety of formats that complement effective tools for a more holistic approach to investing. Fidelity provides withdrawal calculators and incorporates Social Security distributions that give better insight into your retirement income approach if you’re closer to retirement.

Overall, investment management flexibility paired with outstanding tools and low costs makes Fidelity one of the premier places to hold your Roth IRA.

Fidelity has been headquartered in Boston, Massachusetts since the founding of Fidelity Management & Research Company in 1946.

Read the full Fidelity Investments review.

Best for Self-Directed Investors: Charles Schwab

Account minimum: $0
Fees: Free stock and ETF trading, $0.65 per options contract
Online tools: Schwab Intelligent Portfolio robo-advisor

Why We Chose It

Charles Schwab offers a strong platform for Roth IRA accountholders given the variety of investment choices, trading tools, and portfolio management options you’ll have at your disposal.

Pros & Cons

Pros

Detailed ETF screening, research, and analysis
No transaction fees applied to ETF trading
Choose from Schwab Intelligent Portfolio robo-advisor, self-directed, or advisor managed investment strategies

Cons

No direct investments in cryptocurrencies
Mutual fund costs and margin rates higher than some competitors
$5,000 minimum, $25,000 for premium in the Schwab Intelligent Portfolio

Overview

Schwab particularly stands out for its extensive ETF screening capabilities. Financial advisor-driven portfolios and the Intelligent Portfolios robo-advisor offering are also available if you’d rather have a less hands-on investment management strategy.

Schwab also gives you access to a considerable volume of market data and investment research to help you make more informed portfolio decisions. Financial calculators and other planning tools are located in the advice section of the platform. They can be tailored to your age, financial situation, and background, giving you even more confidence that you’re on track for retirement. All these features are designed to give you more control and insight wherever you are on your retirement journey.

Founded as Charles Schwab & Co. in 1971, Charles Schwab is headquartered in Westlake, Texas.

Read the full Charles Schwab review.

Best for Self-Directed Investors: Merrill Edge

Account minimums: $0
Fees: $0 per stock trade. Options trades $0 per leg plus $0.65 per contract
Online tools: Retirement Evaluator and Fund Story tools; robo-advisor

Why We Chose It

Merrill Edge offers many different types of investment tools and fund options, along with extensive educational materials centered around retirement planning, highlighting its strength as a Roth IRA provider. The Retirement Evaluator and Fund Story tools in particular combine a long-term planning outlook with detailed portfolio analysis so you can get a better sense of your retirement preparedness.

Pros & Cons

Pros

Tailored portfolio analysis for Bank of America accounts
Fantastic educational material, investment tools, and retirement planning
No minimums for self-directed Roth IRA accounts

Cons

Narrow product line-up
$1,000 minimum for Merrill Guided Investing; $20,000 minimum for Merrill Guided Investing with Advisor

Overview

Merrill Edge falls under the Bank of America umbrella so your other accounts within the institution can be aggregated so you’ll be able to enjoy a more holistic portfolio analysis thanks to this full integration.

Merrill Edge also gives you a range of portfolio strategy options that you can use to pursue your retirement goals. You’ll be able to leverage self-guided investing, financial advisors, or robo-advisor portfolio strategies with the platform. You’ll find the Merrill Edge experience will be personalized to your preferences while giving you the insight needed to stay on track for retirement no matter which approach you use.

Founded in 1914 as Charles E. Merrill & Co., before being acquired by Bank of America and rolled into BofA Securities in 2009, Merrill Lynch is headquartered in New York, New York.

Read the full Merrill Edge review.

Best for Hands-Off Investors: Wealthfront

Account minimum: $500
Fees: 0.25% for most accounts, no trading commission or fees for withdrawals, minimums, or transfers
Online tools: Goal tracking, integration features, and digital planning tools

Fund your first taxable Investment Account and get a $50 bonus.

Why We Chose It

As one of the leading digital investment advisor platforms in the industry, Wealthfront stands out for Roth IRA account holders due to its superior goal tracking, integration features, and digital planning tools.

Pros & Cons

Pros

Intuitive and innovative retirement planning tools
Excellent account aggregation functionality
Self-Driving Money and Path features

Cons

No access to financial advisors
No self-directed portfolio options
No live chat

Overview

Retirement-driven investors will especially appreciate Wealthfront’s use of third party data and robust account integration features that give you a more comprehensive understanding of your retirement picture. Wealthfront’s dashboard makes it easy to understand whether you’re on course to achieve your retirement objectives.

Wealthfront is also committed to further improving, streamlining, and simplifying the financial planning process. Tools such as Path and Self-Driving Money help you evaluate your financial standing and automate your savings strategy. If you have pre-tax retirement accounts such as a traditional IRA, Wealthfront makes it easy to convert these assets into a Roth IRA. You’re able to transact this request directly on the platform. All these features give you a powerful tool to maximize the effectiveness of your retirement strategy and Roth IRA approach.

Originally founded by Andy Rachleff and Dan Carroll in 2008, Wealthfront Inc. is based in Palo Alto, California.

Read the full Wealthfront review.

In the News

On Nov. 3, 2023, Wealthfront increased the APY on its Cash Account from 4.80% to 5.00%.

Best for Hands-Off Investors: M1 Finance

Account minimum: $100 ($500 minimum for retirement accounts)
Fee: 0%
Online tools: Minimal digital planning tools; no available human advisors for backup

Why We Chose It

M1 Finance has built an innovative platform that allows you to manage your money holistically, making it a natural landing spot if you’re looking to have your finances held in one place.

Pros & Cons

Pros

Zero fees incurred for account management and trading
Superb range of investment selections, customization, and portfolio automation options
Fractional shares supported

Cons

Minimal financial tools, calculators, and goal-tracking features
No external account aggregation for investment allocation purposes
Human financial advisors not available for additional retirement help

Overview

You won’t just have access to save, spend, and borrow products at M1 Finance. You’ll also be able to take advantage of a unique investment management solution that supports extensive portfolio customization while putting the management strategy on auto pilot. The ability to both tailor and automate lets retirement savers invest according to their preferences while giving peace of mind.

You can choose from over 80 pre-built portfolios (called “pies,” a nod to portfolio pie charts) when you invest your Roth IRA through M1 or build-your-own allocation. Either option is available to you with no trading costs or asset management fees. The biggest addition M1 Finance has made recently is the introduction of cryptocurrency trading, which can be managed and automated using the same pie interface.

If you’re looking for additional help preparing for retirement, however, what you won’t find at M1 are human advisors or digital planning tools. The experience is best suited for self-directed investors looking to automate their preferred portfolio strategy while maintaining access to other money management tools.

Founded in 2015, M! Finance is headquartered in Chicago, Illinois.

Read the full M1 Finance review.

Best for Hands-Off Investors: Betterment

Account Minimum: $0; $10 to get started
Fees: 0.25% (annual) for investing plan accounts with at least $20,000 or at least $250 per month in recurring account deposits. Otherwise, the fee is $4/month. An additional 0.15% (annual) fee on accounts with at least $100,000 in assets provides account holders with unlimited access to certified financial planners. This additional fee is applied to assets in the investment and cryptocurrency accounts, but not cash accounts. For accounts with at least $2 million, there is a fee discount of 0.10%. Crypto accounts are charged a monthly fee of 1% plus trading expenses.
Online tools: One the first robo-advisors in the industry

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Why We Chose It

Betterment provides a strong management option for your Roth IRA if you prefer a digital investment advisor with some portfolio flexibility that also automates your retirement strategy.

Note

Investopedia conducts quantitative ratings of online broker and robo-advisor companies on an annual basis, in addition to performing frequent content updates. Our last assessment of Betterment for inclusion in this Best Roth IRA Accounts article was performed in April 2022.

Pros & Cons

Pros

No Roth IRA account minimums
Portfolio tools and planning functionalities easy to navigate
External account aggregation for the entire picture of your retirement
Seamless account setup and portfolio transparency before depositing

Cons

No self-directed retirement investment options, assets limited to ETFs
Margin account and borrowing products not available
$100,000 required for Premium plan
No direct REIT exposure in robo-advisor portfolios

Overview

Betterment’s strength is based on expansive planning tools, intuitive progress tracking dashboards, and account aggregation features that can help set you up for retirement success. You can also take advantage of human financial guidance at an extra cost for additional support to assess your retirement readiness.

Betterment further distinguishes itself for retirement planning by prompting you to change your savings strategy and contribution amounts if fine-tuning is needed. Investment selections are limited to ETFs, but you’ll be able to maintain some portfolio flexibility in the form of adjusting risk, opting into socially conscious strategies, and adapting allocations to specific financial situations such as an Income Portfolio. A wide range of educational material and digital advice is also readily accessible, making Betterment a valuable platform when considering retirement.

Betterment was founded by Jon Stein and Eli Broverman in 2008, and is headquartered in New York, New York.

Read the full Betterment review.

In the News

On Sept. 12, 2023, Betterment announced the launch of a new Bitcoin/Ethereum Portfolio. As part of the Crypto Investing by Betterment suite, the new portfolio provides direct access to the two largest cryptocurrencies in the market for investors who are interested in gaining exposure to crypto.

Final Verdict

Fidelity Investments gets a thumbs-up from us thanks to its educational tools and guidance features, including articles and a very knowledgeable chatbot that can field a nice selection of questions. It offers management flexibility and there are no account minimums. And it offers much more than mutual funds with several other retirement options available.

Company	Platform Type	Fees	Account Minimum
Fidelity	Online Brokerage	$0 for stock/ETF trades, $0 plus $0.65/contract for options trade	$0
Charles Schwab	Online Brokerage	$0 for stock/ETF trades, $0.65 per contract for options	$0
Merrill Edge	Online Brokerage	$0 per stock trade. Options trades $0 per leg plus $0.65 per contract	$0
Wealthfront	Robo-Advisor	0.25% for most accounts, no trading commission or fees for withdrawals, minimums, or transfers; between 0.42%- 0.46% for 529 plans	$500
M1 Finance	Digital Wealth Management	0%; $36 per year for M1 Plus ($3 month, 3 months free for new users)	$100 ($500 minimum for retirement accounts)
Betterment	Robo-Advisor	0.25% (annual) for investing plan accounts with at least $20,000 or at least $250 per month in recurring account deposits. Otherwise, the fee is $4/month. An additional 0.15% (annual) fee on accounts with at least $100,000 in assets provides account holders with unlimited access to certified financial planners. This additional fee is applied to assets in the investment and cryptocurrency accounts, but not cash accounts. For accounts with at least $2 million, there is a fee discount of 0.10%. Crypto accounts are charged an annual fee of 1% plus trading expenses.	$0; $10 to get started

Why You Should Trust Us

Investopedia collected and analyzed several key data points from over 43 online brokerage and digital wealth management companies to identify the most important factors for readers choosing the right Roth IRA to fit their needs. We used this data to review each company for their financial services, calculators and tools, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999, and has been helping readers find the best Roth IRA accounts since 2019.

Roth IRA Tax Benefits vs. Traditional IRAs

A Roth IRA offers several tax benefits that make it an attractive option for retirement savings:

Tax-Free Withdrawals in Retirement: One of the primary advantages of a Roth IRA is that qualified withdrawals in retirement are entirely tax-free. This includes both contributions and earnings, providing retirees with a tax-efficient income source.
Tax-Free Growth: Within a Roth IRA, investments can grow tax-free. Unlike traditional IRAs or 401(k)s, where contributions are tax-deductible but withdrawals are taxed, Roth IRAs allow your investments to compound over time without incurring taxes on capital gains or dividends.
No Required Minimum Distributions (RMDs): Roth IRAs do not have required minimum distribution (RMD) obligations during the account holder’s lifetime. Traditional IRAs and 401(k)s mandate minimum distributions starting at a certain age, but Roth IRAs offer greater flexibility, allowing individuals to manage their withdrawals according to their financial needs.
Tax-Free Withdrawals for Qualified Expenses: Roth IRAs allow penalty-free withdrawals of contributions (not earnings) for specific purposes before retirement. This includes qualified first-time home purchases and certain educational expenses, providing added flexibility for life’s significant financial milestones.
No Age Limit for Contributions: Traditional IRAs restrict contributions after the age of 72, but Roth IRAs have no age limit for contributions, allowing individuals to continue contributing as long as they have earned income, fostering continued growth and tax benefits.
Estate Planning Benefits: Inherited Roth IRAs continue to offer tax-free withdrawals for beneficiaries, provided certain conditions are met. This can be advantageous for passing on assets to heirs while minimizing tax implications.

Bottom line: Roth IRAs provide compelling tax benefits. However, it’s essential to note that contributions are made with after-tax dollars. Therefore, individuals should evaluate their current and future tax situations to determine if the tax-free withdrawals in retirement outweigh the upfront tax payment.

Frequently Asked Questions

What is the 10 Year Roth IRA Rule?

The Setting Every Community Up for Retirement Enhancement Act of 2019, better known as the SECURE Act, requires that designated beneficiaries, which are not eligible designated beneficiaries, must withdraw the entire inherited IRA account by the 10th calendar year following the year of the employee or IRA owner’s post-2019 death. The Act also requires that non-designated beneficiaries must withdraw the entire account within five years of the employee or IRA owner’s death if distributions have not begun before death

Can You Have Two IRAs?

Yes, you can have multiple IRAs. There are two main types of IRAs: Traditional and Roth. You can have both types simultaneously, but the total annual contribution limit applies across all your IRAs.

In 2023, the combined contribution limit for both types of IRAs was $6,500 (or $7,500 if you’re 50 or older). For 2024, the limit is $7,000 ($8,000 if age 50 or older). These limits apply to your combined traditional and Roth IRA contributions.

How Do You Qualify for a Roth IRA?

Single taxpayers must have a modified adjusted gross income (MAGI) under $138,000 to make the maximum Roth IRA contribution. The contribution amounts are reduced as your income nears $153,000, at which point you no longer qualify for a Roth IRA. The full contribution is available to married taxpayers who file jointly up to MAGIs of $218,000 with reductions to a complete phase out at $228,000.

How Does a Roth IRA Grow?

A Roth IRA grows like every other investment account: through the magic of compounding. Your contributions to a Roth IRA are invested to earn interest and that interest helps to increase your overall portfolio balance, helping you to earn more interest. The more time your money has in the market, the better the opportunity for greater returns becomes over time.

The money in a Roth IRA can continue to grow even after you stop making contributions because the ongoing returns continue to add to the balance and get reinvested. The financial institutions reviewed for this article all provide resources and guidance on diversifying a portfolio to ensure the right balance of risk and reward to intelligently grow your retirement savings in a Roth IRA.

Why Should You Consider a Roth IRA?

The tax benefits of a Roth IRA make it a powerful alternative to the traditional IRA because contributions are made with after-tax dollars. The tax on the money in your Roth IRA is already paid, so there is no tax owing when you withdraw your money. And you won’t pay capital gains on it in retirement as long as you keep to the qualified distribution guidelines.

While many people choose to take the deduction now and pay taxes on retirement savings when they withdraw funds in the future, this strategy can be disadvantageous if you have income from other sources in retirement.

Can I Use a Roth as an Emergency Fund?

An often overlooked feature of a Roth IRA is its ability to operate as a de facto emergency fund. You’re making contributions with after-tax dollars so you can withdraw those contributions without any tax implications. But this only applies to the amount contributed. Any earnings on that money must stay in the account until you can make a qualified distribution.

Do Roth IRAs Have RMDs?

One huge advantage to structuring your retirement account as a Roth IRA is that there are no required minimum distributions (RMDs). You can simply leave the money in the Roth IRA if you don’t need it immediately in retirement. The money would transfer to your designated beneficiary should you pass away before fully using up your Roth IRA. The same rules apply to you (no taxes or RMDs) if your spouse is your beneficiary. A Roth IRA can be passed on to your heirs without incurring estate taxes, although there are some rules around how and when they have to start drawing the account down.

How We Picked the Best Roth IRA accounts

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers and robo-advisors. Our reviews are the result of a thorough evaluation of all aspects of these platforms, including usability, account and research amenities, educational content, available products, costs and fees, security, mobile experience, and customer service. Our last assessment for inclusion in this Best Roth IRA Accounts article was performed in April 2022.

Dotdash Meredith receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. Dotdash Meredith is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.