BEST OF
A Roth IRA is a great tool to help you save for retirement. Check out our picks for the best Roth IRA accounts below.
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A Roth IRA is one of the best places to save for retirement — you put money in after paying income taxes on it, but then your account grows entirely tax-free. In retirement, you don’t have to pay any tax on withdrawals, provided you follow the rules, which can mean more financial freedom for you. And it’s easy to get going: It takes just 15 minutes to open an account.
But what's the best place to open a Roth IRA? We’re here to help you decide. Every year, we evaluate major U.S. online brokers and robo-advisors to select the best Roth IRA account. Our current picks are below. (Note: The star ratings on this page are for the provider overall. Some providers with a lower overall rating are included here because IRAs are where they excel.)
A Roth IRA is one of the best places to save for retirement — you put money in after paying income taxes on it, but then your account grows entirely tax-free. In retirement, you don’t have to pay any tax on withdrawals, provided you follow the rules, which can mean more financial freedom for you. And it’s easy to get going: It takes just 15 minutes to open an account.
But what's the best place to open a Roth IRA? We’re here to help you decide. Every year, we evaluate major U.S. online brokers and robo-advisors to select the best Roth IRA account. Our current picks are below. (Note: The star ratings on this page are for the provider overall. Some providers with a lower overall rating are included here because IRAs are where they excel.)
Best Roth IRA Accounts
Fidelity IRA Learn more on Fidelity's website | 5.0 Best for Hands-On Investors | $0 no account fees to open a Fidelity retail IRA | $0 | Get $100 when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply. | Learn more on Fidelity's website |
Interactive Brokers IBKR Lite Learn more on Interactive Brokers' website | 5.0 Best for Hands-On Investors | $0 per trade | $0 | None no promotion available at this time | Learn more on Interactive Brokers' website |
Merrill Edge IRA Learn more on Merrill Edge's website | 4.7 Best for Hands-On Investors | $0 per trade | $0 | Up to $600 when you invest in a new Merrill Edge® Self-Directed account. | Learn more on Merrill Edge's website |
E*TRADE IRA Read review | 4.5 Best for Hands-On Investors | $0 | $0 | None no promotion available at this time | Read review |
SoFi Automated Investing Learn more on SoFi Invest's website | 4.9 Best for Hands-Off Investors | 0% management fee | $0 | Free career counseling plus loan discounts with qualifying deposit | Learn more on SoFi Invest's website |
Our pick for
Hands-On Investors
Fees
$0
no account fees to open a Fidelity retail IRA
Promotion
Get $100
when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply.
Pros
Quality trading platform.
Cons
Relatively high broker-assisted trade fee.
Why We Like It
Fidelity’s lineup of services for investors goes well beyond retirement accounts. The company’s brokerage arm features $0 commissions, a wide investment selection, plenty of research and advanced trading capabilities (including a strong mobile app).
on Interactive Brokers' website
Promotion
None
no promotion available at this time
Pros
Large investment selection.
Strong research and tools.
Over 18,000 no-transaction-fee mutual funds.
NerdWallet users who sign up for IBKR Pro get a 0.25 percentage point discount on margin rates.
Cons
Website is difficult to navigate.
Why We Like It
Interactive Brokers' IBKR Lite is a strong option for frequent traders: The broker offers international trade capabilities, no stock-trading commission and a quality trading platform.
on Merrill Edge's website
Promotion
Up to $600
when you invest in a new Merrill Edge® Self-Directed account.
Pros
Robust third-party research.
Integrated with Bank of America.
Cons
Lower number of low-expense-ratio mutual funds than some competitors.
Why We Like It
Merrill Edge offers high-quality customer service, robust research and low fees — all with no account minimum. Customers of parent company Bank of America will love the seamless, thoughtful integration, with a single login to access both accounts.
Promotion
None
no promotion available at this time
Pros
Extensive research and tools.
Commission-free stock, ETF and options trades.
4,400+ no-transaction-fee (NTF) mutual funds.
Cons
$19.99 cost for trading non-NTF mutual funds.
Why We Like It
Retirement investors will find a lot to love with E*TRADE’s IRA offering, including a large line-up of no-trading-fee mutual funds and an extensive library of retirement advice and tools. Plus, there’s no minimum account balance and no fee for stock or ETF trades.
Our pick for
Hands-Off Investors
Promotion
Free
career counseling plus loan discounts with qualifying deposit
Pros
Broad range of low-cost investments.
Access to certified financial planners.
Why We Like It
Free management and access to financial advisors and career counselors make SoFi Automated Investing a solid choice for beginning and younger investors.
Promotion
Get $50 customer bonus
when you fund your first taxable Investment Account
Pros
Get $50 customer bonus when you fund your first taxable Investment Account (NerdWallet promotion).
Digital financial planning tools.
Cons
No access to human advisors.
Why We Like It
Wealthfront takes the hassle out of IRA investing. The robo-advisor manages accounts by constructing portfolios out of low-cost ETFs, with a flat and low-cost fee structure that appeals to investors seeking a hands-off approach. What’s more, the company has built client trust by offering free management on the first $5,000 invested (for NerdWallet readers).
Promotion
Up to 1 Year
of free management for new clients. Terms apply.
Pros
Multiple investment options.
Fractional shares mean all your cash is invested.
Cons
$100,000 minimum and higher fee for access to financial advisors.
Why We Like It
With its low-cost ETFs, automatic rebalancing, extensive tax strategies and retirement advice, Betterment is a strong bet for retirement investors. Betterment’s planning tools include advice on “asset location” — which types of investments are best for different types of accounts — and investors can sync outside accounts, as well.
Promotion
None
no promotion available at this time
Pros
Extensive investor tools and educational resources.
Low investment-expense ratios.
Specialty portfolio options.
Why We Like It
If you’re after a robo-advisor portfolio with actively managed mutual funds, E*TRADE is a strong option. Otherwise, you may be able to get more for less from a competitor, particularly if you hold a high balance in a taxable account.
Fees
0.0%
with Cash-Enhanced Managed Portfolio; 0.3% otherwise
Promotion
None
no promotion available at this time
Pros
Solid investment selection.
Integration for Ally bank and brokerage clients.
Why We Like It
Ally Invest Robo Portfolios is best suited to retirement accounts or loyal Ally customers who want to house a managed account, a trading account and their bank accounts under one roof. The lack of tax-loss harvesting will be an issue for investors with taxable brokerage accounts.
Want to compare more options? Here are our other top picks:
Last updated on October 21, 2022
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People often identify opening a savings account as their next money move.
LendingClub High-Yield Savings
APY
3.12%
With $0 min. balance for APY
at LendingClub Bank, Member FDIC
SoFi Checking and Savings
APY
2.50%
With $0 min. balance for APY
Bonus
$250
Earn up to $250 with direct deposit. Terms apply.
Discover Bank Online Savings
APY
2.35%
With $0 min. balance for APY
Bonus
$200
Requirements to qualify
at Discover Bank, Member FDIC
Methodology
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers and robo-advisors. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.
Frequently asked questions
Our roundup of the best Roth IRAs focuses on accounts offered by brokers and robo-advisors — not banks. Generally, a broker or robo-advisor is a better option than a bank for a Roth IRA account. That’s because, for a long-term goal like retirement, you want to harness the power of the stock market to help your account get bigger.
Bank Roth IRAs generally offer access to savings products, such as certificates of deposit. CDs are savings vehicles that guarantee a rate of return as long as you leave your money in for a specific period of time. Historically, stock market returns average about 10% a year. CDs are currently offering about 3%.
Of course, those higher stock market returns come with the risk that, in any given year, your account may lose value. But investors who leave their money in the market, even through those down days, enjoy hefty average gains over time.
If, despite the much lower rate of return, you decide to go with a bank for your Roth IRA account, be sure to pick among the accounts with the best IRA CD rates so you know you’re getting the best possible rate of return for that type of account.
The short answer? Yes, it’s almost always a good idea to invest in a Roth IRA account.
Roth IRAs offer a sweet tax benefit for retirement savers. Plus, you can withdraw your contributions at any time, without penalty, which means a Roth can act as a backup emergency fund.
Keep in mind that Roth IRAs don’t offer an immediate tax break. Your investment earnings grow tax-free in the Roth IRA account, and you never pay taxes on those earnings, assuming you follow the withdrawal rules.
Now, if your tax rate is the same when you contribute to the account as it is later, when you withdraw the money, then a Roth IRA and a traditional IRA offer essentially the same benefit. The only difference is the timing of your tax bill — with a traditional IRA you pay your tax bill later and with a Roth you pay your tax bill upfront.
But many people find that their tax rate changes over time. If your tax rate is likely to be higher in the future — that’s often the case for young adults who are just starting out in their careers — then a Roth makes sense, because you pay the income tax on your contributions now, when your tax rate is lower.
Of course, it can be really hard to know what your future tax rate will be, especially if retirement is decades away, so it can make sense to contribute both to a 401(k) or traditional IRA, and to a Roth IRA, if you qualify.
No matter what, if you have a 401(k) or other workplace retirement plan, contribute enough to get the match — that’s free money you don’t want to pass up.
How much you earn in a Roth IRA account will vary, depending on what you’re investing in. The average annual stock market return historically has been about 10%.
Of course, you want to invest in a diversified portfolio of both stocks and bonds, so that your account has a buffer from the stock market’s inevitable ups and downs. Generally, creating a diversified investment portfolio means investing in a handful of mutual funds or exchange-traded funds, which, in turn, invest in a broad swath of stocks and bonds.
A diversified investment portfolio will inevitably earn less than the stock market’s return, because bond yields tend to be in the single digits. Still, a diversified portfolio of stocks and bonds generally earns more than any bank savings product, such as a savings account or CD.
The Roth IRA has income rules for contributions. For 2022, the contribution begins phasing out at $129,000 for single filers and $204,000 for those married-filing-jointly. In 2023, the contribution phases out at $138,000 and $218,000 respectively. 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 will tell you how much you can contribute.
With a traditional IRA and a Roth IRA, the contribution limit is a shared limit — you can contribute a total of up to $6,000 per year ($7,000 if age 50 or older) in 2022, and $6,500 ($7,500 if you're 50 and older) in 2023. It’s up to you to decide how you want to divvy that up between the two.
With a Roth IRA, you can pull your contributions out at any time — remember, you’ve already paid taxes on that money.
However, if you withdraw your investment earnings, you may owe income tax and/or a 10% penalty, depending on how old you are and how long you’ve owned the account. But there are quite a few situations where an early withdrawal of investment earnings is exempt from penalties and income tax. We detail those exceptions here.
Yes. You can have both a Roth IRA and a 401(k) and contribute the maximum you’re allowed to each.
Traditional IRAs don’t have income limits, but if you’re also covered by a workplace retirement plan like a 401(k), the amount of your contribution that you can deduct may be phased down or eliminated.
That means you can still make the maximum annual contribution, but a portion or all of it will be considered a nondeductible contribution. There’s no immediate tax benefit on nondeductible contributions, but you're still able to defer taxes on investment income until retirement. Read more about the traditional IRA deduction limits.
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.
Unlike savings accounts, Roth IRAs don’t pay a set interest rate or return. Once you’ve put money into the account, you need to select investments; otherwise, your money will sit in cash, which isn’t ideal for a long-term goal like retirement. Most Roth IRA providers offer a wide range of investment options, including individual stocks, bonds and mutual funds.
If that sounds out of your league, you can open your Roth IRA at a robo-advisor — like the providers mentioned above in the Hands-Off Investors category — which will manage your investments for you for a small fee.