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Roth IRAs first became available to retirement savers in 1998, and they provide an excellent opportunity to diversify your retirement income from a tax perspective to this day. Roth IRAs are tax-advantaged accounts that allow tax-free withdrawals in retirement because the contributions are made with after-tax dollars—you don’t get a deduction for these contributions.
Your Roth IRA retirement distributions won’t be impacted by unforeseen evolving tax rates in the future. Tax-free withdrawals from a Roth IRA can be an intriguing enhancement to your retirement income strategy if you’re concerned about being in a higher tax bracket in those years.
Combining the tax advantages of a Roth IRA with a robo-advisor or broker that has exceptional planning tools and reporting features can further improve your retirement readiness. To find the best Roth IRA accounts in the industry, we've carefully evaluated institutions across a wide range of factors such as fees, account minimums, goal setting, retirement calculators, and investment options. Review our top picks below.
Best Roth IRA Accounts of 2023
- Best for Self-Directed Investors: Fidelity Investments
- Best for Self-Directed Investors: Charles Schwab
- Best for Self-Directed Investors: Merrill Edge
- Best for Hands-Off Investors: Wealthfront
- Best for Hands-Off Investors: M1 Finance
- Best for Hands-Off Investors: Betterment
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
Get $100 when you open a new Fidelity retail IRA account with $50. A 200% match. Use code FIDELITY100. Limited time offer. Offer Disclosure.
Originally known for its outstanding lineup of mutual funds, Fidelity offers a well-rounded, full-service platform with a wide range of investment options that can be tailored to fit your portfolio preferences.
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
No futures, commodities, or crypto trading ability
Navigating certain features and tools can be challenging
Non-U.S. citizens or non-residents blocked from account opening
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 goal-setting tools. 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.
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
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.
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
Narrow range of crypto trading, no FX trading, separate futures platform
Mutual fund costs and margin rates higher than some competitors
$5,000 minimum, $25,000 for premium in the Schwab Intelligent Portfolio
Schwab particularly stands out for its extensive ETF screening capabilities, which include over 150 filtering capabilities that incorporate socially responsible investing (SRI) selections as well. Financial advisor-driven portfolios and the Intelligent Portfolios robo-advisor offering are available as well 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.
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
Merrill Edge has a solid blend of investment tools and educational material 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.
Tailored portfolio analysis for Bank of America accounts
Fantastic educational material, investment tools, and retirement planning
No minimums for self-directed Roth IRA accounts
Limited, complex options trading
$1,000 minimum for Merrill Guided Investing; $20,000 minimum for Merrill Guided Investing with Advisor
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.
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.
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.
Intuitive and innovative retirement planning tools help you readily assess your strategy.
Excellent account aggregation functionality provides a well-rounded view of your financial situation.
Self-Driving Money and Path features help automate the approach to your retirement goals.
Accounts with less than $100,000 cannot be customized outside of risk preferences.
Using robo-advisor strategy is the only option; there are no human financial advisor or self-directed portfolio options.
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.
UBS and Wealthfront announced on Sept. 2, 2022 that they had mutually agreed to terminate their merger agreement, which was initially announced on Jan. 26, 2022. Wealthfront was to be acquired by UBS Americas Inc. under that agreement.
Read the full Wealthfront review.
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
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.
Zero fees incurred for account management and trading
Superb range of investment selections, customization, and portfolio automation options
Fractional shares supported, allowing you to be fully invested in your Roth IRA
Minimal financial tools, calculators, and goal-tracking features
Lacking external account aggregation for investment allocation purposes
Human financial advisors not available for additional retirement help
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 M1or build-your-own allocation. Either option is available to you with no trading costs or asset management fees. But you won’t find these options at M1 if you’re looking for additional help preparing for retirement in the form of human advisors and 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.
Read the full M1 Finance review.
Best for Hands-Off Investors : Betterment
- Account Minimum: $0; $10 to get started
- Fees: 0.25% or $4 per month based on balance or recurring deposit
- Online tools: One the first robo-advisors in the industry
Paid non-client of Betterment. Views may not be representative. See more reviews at the App Store and Google Play Store. Learn More about this relationship.
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 & Cons
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
No self-directed retirement investment options, assets limited to ETFs
Margin account and borrowing products not available
Additional fee between $299 and $399 per consultation for human advice
$100,000 required for Premium plan
One of the first robo-advisors in the industry, 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 an all-around excellent platform.
Read the full Betterment review.
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.
Frequently Asked Questions
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 contribution in 2023. 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?
Roth IRAs are a powerful variation on the traditional IRA from a tax perspective 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 as for you (no taxes and no RMDs) if your beneficiary is your spouse. 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 March 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.
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