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 Contributions to a Roth IRA are made with after-tax dollars, which investors can then watch grow tax-free and be withdrawn tax-free after age 59½, assuming the account has been open for at least five years.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 Roth IRA Accounts for March 2024 Best Roth IRA Accounts for March 2024 Final Verdict Why You Should Trust Us Roth IRA Tax Benefits vs. Traditional IRAs FAQs How We Picked the Best Roth IRA accounts Guide to Roth IRA Accounts 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 in1946. Read the fullFidelity Investments review. 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 theIntelligent Portfolios robo-advisor offeringare 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 asCharles Schwab & Co.in 1971, Charles Schwab is headquartered in Westlake, Texas. Read the full Charles Schwab review. 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 headquarteredin New York, New York. Read the full Merrill Edge review. 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 inPalo 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%. 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. Paid non-client of Betterment. Views may not be representative. See more reviews at the App Store and Google Play Store. Learn Moreabout this relationship. 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. 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 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. Roth IRA Vs. Traditional IRA 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. 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. A Roth IRA offers several tax benefits that make it an attractive option for retirement savings: 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. 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 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. 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. 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. 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. 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. 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. 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 endorsem*nt. More information is available via our links to Wealthfront Advisers. Learn more about Roth IRA accounts: Roth IRA: What It Is and How to Open One How Can I Fund a Roth IRA If My Income Is Too High? How to Use Your Roth IRA as an Emergency Fund How a Roth IRA Works After Retirement How to Convert to a Roth IRA How Roth IRA Taxes Work How to Open a Roth IRA in 5 Steps How Converting to a Roth IRA Can Affect Taxes What Fees Do You Pay in a Roth IRA? How Do I Roll Over a SIMPLE IRA to a Roth IRA? Roth IRA Fund Options From SoFi Roth IRA Fund Options From E*Trade Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Fidelity Investments. "Get Started With Zero." Fidelity Investments. "Straightforward and Transparent Pricing." Fidelity. "Help from Fidelity's investment advisory services." Charles Schwab. "Pricing." Charles Schwab. "Online Stock Trading." Merrill Edge. "Merrill Pricing." Merrill Edge. "Merrill Pricing." Wealthfront. "How Do I Fund My Account?" Wealthfront. "Wealthfront Fees." Wealthfront. "Wealthfront Cash." M1 Finance. "My First Deposit." M1 Finance. "M1 Retirement Accounts." M1 Finance. "M1 Crypto Is Here." Betterment. "Get Started With Betterment." Betterment. "Betterment's Pricing." Internal Revenue Service. "Retirement Topics - Beneficiary." IRS. "Amount of Roth IRA Contributions That You Can Make for 2023." IRS. "IRS Retirement Plans." IRS. "Retirement Topics—Required Minimum Distributions (RMDs)."Best Roth IRA Accounts of 2024
Best for Self-Directed Investors : Fidelity Investments
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Best for Self-Directed Investors : Charles Schwab
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Best for Self-Directed Investors : Merrill Edge
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Best for Hands-Off Investors : Wealthfront
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Best for Hands-Off Investors : M1 Finance
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Best for Hands-Off Investors : Betterment
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Pros & Cons
Final Verdict
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
Roth IRA Tax Benefits vs. Traditional IRAs
Frequently Asked Questions
What is the 10 Year Roth IRA Rule?
Can You Have Two IRAs?
How Do You Qualify for a Roth IRA?
How Does a Roth IRA Grow?
Why Should You Consider a Roth IRA?
Can I Use a Roth as an Emergency Fund?
Do Roth IRAs Have RMDs?
How We Picked the Best Roth IRA accounts
Guide to Roth IRA Accounts
Best Robo-Advisors for March 2024 Best IRA Accounts How to Open a Roth IRA With a Major Online Brokerage Firm 401(k) Rollovers: The Complete Guide Best Robo-Advisor Cash Management Accounts for February 2024 Best Bitcoin IRA Companies
FAQs
Can you contribute to Roth IRA for 2024? ›
The maximum amount you can contribute to a Roth IRA for 2024 is $7,000 (up from $6,500 in 2023) if you're younger than age 50. If you're age 50 and older, you can add an extra $1,000 per year in "catch-up" contributions, bringing the total contribution to $8,000.
Which company is best for Roth IRA? ›The best Roth IRA accounts include Vanguard, Fidelity, Charles Schwab, Merrill Edge and E*TRADE. They stand out for their low costs and large selection of retirement investments.
Does it matter where you open a Roth IRA? ›Not all financial institutions are created equal. Some IRA providers have an expansive list of investment options, while others are more restrictive. Almost every institution has a different fee structure for your Roth IRA, which can have a significant impact on your investment returns.
What is the IRS contribution limit for 2024? ›Highlights of changes for 2024. The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan is increased to $23,000, up from $22,500. The limit on annual contributions to an IRA increased to $7,000, up from $6,500.
How much can I contribute to my Roth 401k in 2024? ›The Roth 401(k) contribution limit for 2024 is $23,000 for employee contributions and $69,000 total for both employee and employer contributions. There's also a $7,500 catch-up contribution for those age 50 and older, which raises the employee limit to $30,500 for those eligible.
What account is better than a Roth IRA? ›A brokerage account is a taxable investment account that gives you more flexibility than a Roth IRA. You can open both a Roth IRA and a brokerage account, but if you haven't started saving for retirement yet, prioritize the Roth IRA.
What is the best option for a Roth IRA? ›The Bottom Line
If you'd like to invest on your own in a Roth IRA, Fidelity offers the best all-around broker experience. Vanguard is best for low-cost mutual funds, Interactive Brokers is best for advanced capabilities and access to global markets, and E*TRADE has the best mobile apps for investors.
Can You Have More than One Roth IRA? You can have more than one Roth IRA, and you can open more than one Roth IRA at any time. There is no limit to the number of Roth IRA accounts you can have. However, no matter how many Roth IRAs you have, your total contributions cannot exceed the limits set by the government.
What are the changes in the IRS in 2024? ›Standard Deduction Changes for 2024
For tax year 2024, the standard deduction for married couples filing jointly rises to $29,200, an increase of $1,500 from 2023. For single taxpayers, the standard deduction rose to $14,600, a $750 increase from the previous year.
Individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions. Annual catch-up contributions up to $7,500 in 2023 and 2024 ($6,500 in 2021-2020; $6,000 in 2015 - 2019) may be permitted by these plans: 401(k) (other than a SIMPLE 401(k)) 403(b)
Can I contribute to last year's Roth IRA? ›
You can make contributions that count toward a previous year's IRA as long as you have taxable income in that tax year. The maximum amount you can contribute is up to the IRA limit or your taxable compensation for the year if it's less than the limit.
When can you start contributing to 2025 Roth IRA? ›Save a full year and start your Roth IRA “five-year seasoning” in 2024. Establishing a Roth IRA and making 2024 contributions before the April 15, 2025 deadline retroactively sets the start date for the five-year seasoning period to January 1, 2024.