7 Best Roth IRA Accounts of 2023

The best Roth IRA accounts let workers save after-tax dollars for retirement without paying exorbitant fees. However, it can be hard to choose a provider when so many companies offer Roth IRA accounts with similar features.

To help you meet your retirement goals, we’ve compared the top Roth IRAs available today based on factors such as investment options, educational resources, fees, and minimum account investment/balance requirements.

The Roth IRA providers we’ve highlighted below stand out from their peers, thanks to their low ongoing costs and a broad selection of investment options, as well as the ease with which you can open an account.

Our Top Picks for Best Roth IRA Accounts

• Fidelity Investments: Best Overall
• Charles Schwab: Best Investment Options
• Merrill Edge: Best Bonus Offer
• E*TRADE: Best for Low Trading Fees
• Vanguard: Best for Mutual Funds
• Betterment: Best Robo-Advisor Option
• Ally Invest: Best by an Online Bank

Best Roth IRA Account Reviews

Why we chose it: Fidelity Investments is our choice for best overall because it offers self-directed and managed Roth IRA options with no annual account fees, no required minimum balance and a wide selection of investment options.

Fidelity’s retail Roth IRA is a self-directed account where you can choose your own investment elections. You also get access to planning tools, research and 24/7 support from Fidelity’s representatives. Although there are no account or advisory fees, some investments may incur underlying fees which you should check before making a selection.

The Fidelity Go Roth IRA, on the other hand, provides discretionary investment management based on your risk tolerance and information. As with the retail account, you get access to digital planning tools and 24/7 customer service, plus unlimited one-on-one calls with a dedicated Fidelity advisor once your account reaches $25,000.

Fidelity’s Go Roth IRA doesn’t charge advisor fees for account balances under $25,000. However, it charges a 0.35% annual advisory fee for accounts over $25,000.

Fidelity includes tools like an IRA Contribution Calculator and educational resources to help prepare you for retirement. You’ll also get Fidelity’s intuitive online interface that makes it easy to research and track your investments over time.

In addition to retirement accounts, Fidelity features wealth management services with access to financial advisors for accounts over $50,000, which can be an option for those interested on a more hands-on approach. Fidelity also offers brokerage accounts with $0 commissions for online U.S. stock, exchange-traded funds (ETF), and options trades.

Why we chose it: Charles Schwab’s comprehensive selection of investment products and accounts, including personalized financial guidance, makes it a worthwhile brokerage firm for opening a Roth IRA.

Charles Schwab is a leading brokerage firm that makes it easy to open a Roth IRA online, as there are no minimum account deposits required, and you won’t pay any annual account maintenance fees.

Charles Schwab’s investment choices include stocks, bonds, ETFs, CDs, mutual funds and some cryptocurrency. It also offers multiple portfolio management options including robo-advisors, automated retirement income solutions and access to certified financial consultants.

As a customer, you also get access to retirement planning tools, resources and in-person help at more than 300 Charles Schwab locations nationwide.

Schwab’s robo-advisor options — called Schwab Intelligent Portfolios — offer automated investing with 24/7 live support and no advisory fees or commissions, although it requires a minimum investment of $5,000.

In addition, its premium version provides access to interactive planning tools and guidance from a certified financial planner. The latter, however, requires a minimum of $25,000 and has a one-time planning fee of $300 plus a $30 monthly advisory fee afterwards.

Why we chose it: Merrill Edge stands out from other brokers because it offers new account holders a competitive cash bonus of up to $600.

Merrill Edge offers low fees and a generous sign-up bonus. There are some restrictions to this offer, however: you have to make a qualifying deposit of at least $20,000 to your new account within 45 days of opening it, and you must keep the deposited amount intact for 90 days.

The cash bonus is determined based on the amount you deposit and ranges from $100 up to $600. A deposit of $200,000 or more is needed to receive the maximum cash reward.

Though there are no account fees for online stock and ETF trades, options trades carry a per-contract fee of $0.65.

If you’re a Bank of America customer, you’ll have a seamless experience linking your Merrill Edge brokerage account to your Bank of America account and will be able to keep track of its performance on the same dashboard. You’ll also benefit from instant transfers when moving money between accounts, a process that can take a few days if you use other banks.

Additionally, if you keep $20,000 or more in your Merrill brokerage account you may qualify for the Bank of America’s Preferred Reward program and get rate discounts on some loan products or a rate boost on your credit card rewards or savings account.

Why we chose it: E*TRADE made our list of best Roth IRA accounts for its low trading fees, which could be especially attractive to active investors.

E*TRADE offers $0 commission trades for most investment choices, including US Exchange-listed stocks, ETFs and bonds. It also provides access to over 6,500 mutual funds with no loads and no transaction fees. However, options start at $0.50 per contract, while futures are $1.50 per contract.

There are no minimum account balances required for this account either, and E*TRADE’s online trading platform makes it easy to access live market data and analysis.

E*TRADE also has a large library of educational resources and tools, including a “Knowledge” section that breaks down the basics of investing, while also giving advice on advanced trading and tax planning.

In addition to self-directed accounts, E*TRADE offers automated managed portfolios, known as Core Portfolios. These require a $500 account minimum to enroll, and charge an annual flat fee of 0.30%.

Unlike other auto-investing solutions, E*TRADE gives you access to a team of experts and tax-sensitive portfolios.You also get the option of choosing socially responsible investments and personalizing your portfolio based on your financial situation, goals and risk tolerance.

Why we chose it: With more than 200 commission-free ETFs and mutual funds to choose from, a simple robo-advisor and a history of zero to low fees, Vanguard can be an excellent Roth IRA option.

Vanguard Digital Advisor is a low-cost robo-advisor solution that offers access to ETFs-only portfolios which you can set up based on your risk assessment and current savings. Its algorithm manages and adjusts the investment mix as needed in order to help you reach your goals.

Although Vanguard Digital Advisor requires at least $3,000 to enroll, the expense ratio on Vanguard funds is among the lowest in the industry, at 0.20% per year. To give you an idea, for every $1,000 you’d pay $2. This is a relatively low fee to pay compared to other robo-advisors, like Betterment and Acorns, that charge fixed monthly fees; ultimately, this means you’re not going to have high fees eating into your profits.

Vanguard’s mutual funds also have no sales loads, sales commissions or account service fees if you choose to receive your account documents electronically. Plus, the company doesn’t charge commissions on stocks and ETFs trades.

With Vanguard, you can also choose how to pick your investments – either select targeted funds with a diversity of investments, pick and choose different funds to create a custom portfolio, or get expert help from one of Vanguard’s agents.

In addition, with Vanguard Personal Advisor Services you can get personalized financial advice from human advisors. However, to enroll in this service you need at least $50,000 in eligible assets.

Why we chose it: We chose Betterment as the best robo-advisor for beginners because it offers tax-harvesting features and shows users how much they need to save to meet their financial goals.

Opening a Roth IRA through Betterment is a great way for beginners to start a retirement plan on their own without a minimum deposit.

Betterment stands out because its algorithm helps set up clear goals and track them easily. Let’s say one of your goals is to save $800,000 for retirement. The app would then tell you the projected amount you need to deposit each month to meet that goal by your target time.
You’ll also get automatic rebalancing to optimize the growth potential of your retirement savings. Betterment’s algorithm will also automatically execute tax-saving strategies, including tax-harvesting, to help you reduce tax exposure by offsetting losses and gains.

Betterment also offers guidance and support from Certified Financial Planners to users who enroll in its Premium account. However, the Premium account has a minimum balance requirement of $100,000 plus an additional fee of 0.15%.

Betterment's main drawback is its new fee structure, which raised fees on small investors. Before, the company used to charge only a 0.25% or 0.40% annual management fee to all users, depending on the account balance.

Now, Betterment charges a $4 monthly fee which can only be switched to a 0.25% annual fee if you have a balance of over $20,000 across all your Betterment accounts or if you schedule a monthly recurring deposit of $250 or more.

Why we chose it: Ally’s easy-to-manage investment tools makes it one of the best apps to open an IRA Roth account.

With Ally, investors can open a Roth IRA without a minimum balance requirement and fund the account easily by linking to any other bank or credit union. In addition, the company charges no trading commissions on individual stocks or on thousands of ETFs.

Like many platforms, Ally charges a contract fee for options trading ($0.50 per trade). There are also some fees related to transfers and account closure. For instance, you’ll be charged a $50 fee for full or partial outgoing transfers from your IRA account and an additional $25 closure fee if you withdraw all your funds.

Since it’s connected to an online-only bank, it’s unsurprising that Ally Invest excels with its online tools and educational content. In addition, it offers an easy-to-use interface, a wide selection of securities and access to other financial products, like checking and savings accounts.

Ally’s Robo Portfolios can also be a great option if you’re looking for a hands-off investing experience. Like most brokers, Ally’s portfolios are built from a mix of ETFs.

You can choose from four portfolio types based on your risk profile and goal. For instance, its tax optimized portfolio is a great choice for after-tax accounts such as a Roth IRA, because it can help you optimize your investments using tax-advantaged ETFs.

Do note that Ally’s Robo Portfolios have a $100 minimum deposit requirement, and may also have a 0.30% annual advisory fee (charged monthly) depending on the type of account.

Other Companies We Considered

In addition to the companies on our top list, we also evaluated the companies below. However, they didn’t make it to our final selection because they feature higher management fees, account minimums or more limited investment choices than the ones we picked.

Wealthfront

Wealthfront’s best features are its low 0.25% management fee, and its robo-advisor capabilities. However, we ended up choosing Betterment for the position of best robo-advisor, due to Wealthfront’s $500 opening deposit and account minimum requirements. This restriction might not be a dealbreaker for some, but it can become an obstacle if you are financially strained.

TD Ameritrade

We considered Ameritrade as the best overall option, thanks to its no-account minimum and $0 commission fees for online stocks. However, it lost this position to Fidelity Investment, as they also have these options, while offering a plethora of low-cost investment alternatives.

SoFi

Although SoFi has robo-advisor capabilities and great customer support, it falls short due to its $75 full outgoing transfer fee, and for not offering tax-loss harvesting or stop-loss orders with their accounts.

M1 Finance

M1 Finance offers strong automated investment services, including flexible customization that adjusts to your investing needs. However, we decided not to pick it as one of our Roth IRA options due to its restrictions. The account has a $500 opening minimum, and you are charged an inactivity fee if you have less than $20 in your account and/or if you don’t trade for 90 days.

Fundrise

Fundrise is a solid option if you want to venture into real estate investment. However, we didn’t pick the company because its investment minimums are among the highest and charges $125 annual fee for investing via IRA. A basic plan requires $1,000 whereas its premium account level requires $100,000. Its starter plan only requires a $10 initial investment, however it doesn’t provide access to IRA investing. Additionally, since the company focuses solely on real estate, there are some extra fees that can apply, including development and liquidation fees.

Ellevest

Ellevest online investing plan can be used to open IRAs. However, it didn’t make the cut because its plan requires you to pay a $12 monthly account management fee, which might not be everyone’s cup of tea. Finally, the company doesn’t provide tax-loss harvesting for their plans.

Roth IRA Guide

Before you open a Roth IRA, it’s important to find out how it works, its income and contribution limits for 2023, withdrawal rules and the main differences between a traditional IRA and a Roth IRA.

What is a Roth IRA account?

A Roth IRA is an individual retirement account where you can contribute after-tax money. While this means you do have to pay taxes on what you invest now, it also means your contributions will grow tax-free until you’re ready to withdraw them, typically after age 59 ½ or once the account has been opened for at least five years.

When deciding whether to open a Roth IRA account, consider the following :

• Management fees and expense ratios are often the biggest determinants of your investment returns, since they chip away at your earnings yearly.

• The best Roth IRA providers typically have a robust online presence, and they should make it easy to open your account online.

• The income requirements to contribute to a Roth IRA.

Both Roth IRAs and Traditional IRAs provide tax advantages. However, when you get to enjoy those advantages will be different. Be sure to compare both options before deciding which is best for you.

Investors who want to diversify their portfolios could also consider a Gold IRA as an option for retirement. These accounts invest in precious metals like gold, silver and platinum, which are often considered a hedge against stock market volatility and inflation.

Backdoor Roth IRA

A Roth IRA conversion, or a backdoor conversion, is a strategy that consists of converting your pre-tax Traditional IRA or an employer retirement account into a Roth IRA.

Because Traditional IRAs don’t have income limits, you can make your desired contributions up to the contribution limit and later on move your money to a Roth IRA through a Roth conversion.

However, this strategy has its risk and tax consequences, which is why you should consult with a tax professional or financial advisor before taking that route.

Mega backdoor Roth IRA

A mega backdoor Roth is another strategy that lets you roll over any after-tax dollars you’ve contributed to a 401(k) into a Roth IRA.

Although traditional 401(k)s are tax-deferred accounts that you fund with pre-tax money, some accounts allow after-tax contributions up to a specified limit. The goal of a mega backdoor is to save after-tax money within your retirement plan up to the contribution limit to then move that portion to a Roth IRA, preferably before it starts accruing earnings.

As with a backdoor Roth IRA, a mega backdoor Roth can also have tax consequences, so you should consult with your tax advisor before using this strategy. In addition, take into account that not all 401(k) plans offer in-service distributions to a Roth IRA, meaning you should check if this option is permissible under your employer-sponsored plan.

How does a Roth IRA work?

Just like traditional IRAs, a Roth IRA is an individual retirement account you can set up to grow your finances over the years.

However, Roth IRAs differ in that the money you invest is taxed the moment it goes into your account, and not when you withdraw it. This means that the money in your account is tax-free, so you can withdraw it whenever without additional penalties or fees.

Who can contribute to a Roth IRA?

Not everyone can contribute to a Roth IRA — at least not the full amount.

You have to meet specific income requirements to be able to contribute to a Roth IRA. (See below for details). You’ll also face maximum contribution limits that vary based on your age, filing status and income.

Below we explain what are the income and contribution limits for tax year 2023.

Roth IRA income limits

In 2023, married couples filing with a modified adjustable gross income (MAGI) below $218,000 can contribute the full amount to a Roth IRA.

For couples with incomes between $218,000 and $227,999, the contribution maximum is lower, while no contributions are allowed at incomes of $228,000 or above.

Single filers or married couples filing separately with a MAGI below $138,000 can contribute the maximum to a Roth IRA in 2023. For incomes between $138,000 and $152,999, contribution limits are lowered, while no contributions are allowed at incomes of $153,000,000 and above.

Roth IRA Contribution Limits

Roth IRA contribution limits are somewhat higher for 2023, compared to previous years, and people who earn a taxable income are allowed to contribute up to $6,500 across their IRA accounts. For workers ages 50 and older, an additional $1,000 can be contributed for a total of $7,500 per year.

When can you withdraw from a Roth IRA?

Although, you can technically withdraw your Roth IRA contributions whenever you want and for any reason without penalties, Roth IRA accounts have a five-year waiting period in place to limit your withdrawal of tax-subsidized earnings.

Roth IRAs don’t adhere to the required minimum distributions (RMDs) rule either. This rule typically applies to traditional IRAs and requires account owners to start distributing their money at age 72. With a Roth IRA, however, you may decide to never take the distributions and leave it to your beneficiaries. You may also continue to make contributions after the age of 70 ½.

Contribution withdrawals are also tax-free, since you pay taxes when you add them to your account. Earnings, however, are subject to taxes and penalties if you withdraw them before the age of 59 ½. If you open an account after age 59 ½ you must still wait five years after opening your Roth IRA if you want to withdraw your earnings tax-free.

How is a Roth IRA taxed?

Unlike a traditional IRA, any contributions you make to a Roth IRA is nondeductible on your tax return. This is so because you pay tax before your money goes into the account.

Qualified distributions, including earnings on your contributions, are also tax-free. However, withdrawals before the five-year waiting period may be subject to fees from your IRA provider.

How to open a Roth IRA?

Almost anyone can open a Roth IRA account, as long as you meet the income limits required to contribute.

Below are four steps you need to take to open a Roth IRA.

• Check if you’re eligible. The first step is to find out whether your income is eligible to open and maintain a Roth IRA. The amount you can contribute to a Roth IRA can change each year, based on inflation and other factors.

• Choose a bank or brokerage firm. Research online for potential Roth IRA providers. There are a few dozen options to choose from — take the time to compare account requirements, fees, minimum balances and investment options. You can check our top picks to get a head start.

• Fill out the paperwork. As with opening similar accounts, you may need to fill out some forms and provide personal information and documentation — such as your Social Security number and your bank account information. You’ll also need the info of your beneficiaries.

• Choose how to invest the money. You can either design your own portfolio, choose one designed by the investment company, or hire a certified financial planner (CFP) to help you pick the best strategy for your financial goals.

Roth IRA fees

While opening a Roth IRA account is free, providers can often charge fees associated with account maintenance, commissions and funds’ expense ratio. Some common fees include:

• Account maintenance fees: While most banks and investment firms no longer charge annual or monthly fees for account maintenance, some may still charge a fee of up to $50. Roth IRA providers generally disclose these fees on the account paperwork.

• Transaction fees: You may also have to pay transaction fees or commissions for buying and selling securities, like stocks and ETFs. These fees can vary depending on the type of trade, amount invested and number of securities, ranging anywhere from $5 to $20 per transaction.

• Expense ratios: Mutual funds held in a Roth IRA generally have operating costs of their own, which you have to pay each year as a percentage of your investment. These fees are identified in the fund’s prospectus, and can range from 0.20% to upward 2% depending on the type of fund.

• Transfer or rollover fees: You may be charged a fee if you transfer or roll over part or all your Roth IRA to another institution or retirement account.

Roth IRAs pros and cons

As with most investment products, there are advantages and disadvantages you should consider. Below are some pros and cons of investing in Roth IRAs:

Roth vs Traditional IRAs

The biggest differences between Traditional and Roth IRAs are the way the accounts are taxed, and when you can withdraw your funds.

Traditional IRAs use pre-tax money, so your contributions aren’t charged until you withdraw them. When you do, you’re charged income tax on each withdrawal you make.

Most traditional IRAs also have a required minimum withdrawal (RMD) amount that you must withdraw on a yearly basis after reaching 72 or 70 ½ (if you reach age 70 ½ before January 1st, 2020). The RMD amount varies greatly from individual to individual, and is calculated using your age and account balance.

In contrast, Roth IRAs don’t have required minimum distributions (RMDs) unless you’re not the original account owner. With a Roth IRA, you can also make tax and penalty-free withdrawals of your contributions as long as you’ve had the account open for at least five years.

Traditional IRA Vs Roth IRA Vs Traditional 401K vs Roth 401K

The following chart breaks down the similarities and differences between Traditional and Roth IRAs, as well as Traditional and Roth 401Ks.

How We Chose the Best Roth IRA Accounts

There are numerous companies that offer financial planning via Roth IRA accounts, but they’re not all the same. The providers that made our list came out ahead of the pack based on four important factors: low minimum deposit requirements, low fees, access to low-cost investment options, and account management options.

Low Minimum Deposit Requirements

We only chose Roth IRA accounts with reasonable minimum account opening requirements (or none at all) for this list. This factor is crucial, since many consumers may not have the $1,000 or more to get started and need to invest small sums of money at first.

Accounts with reasonable minimum deposit requirements lower the entry barrier and make it considerably easier for new investors to get into the game.

Low Fees

We also looked for Roth IRA providers that offered no account management fees, had a good variety of no-load mutual funds and low expense ratios. These fees can directly chip away at your investment returns without providing you with any real benefit, so you’re better off not paying them for a self-directed account.

Access to Low-Cost Investment Options

All of the Roth IRA accounts that made our list let you choose from a broad range of investment options, many of which can be traded without any fees. We gave preference to financial institutions that offered their own selection of no-fee investment options, whether that includes ETFs, index funds, or mutual funds.

Account Management Options

Finally, we definitely gave preference to Roth IRA accounts with helpful online account management options, including setting up a rollover into another account if you choose.

This includes not only investing tools and resources, but also access to a mobile app that lets you manage and oversee your personal finance accounts on the go.

A few of the Roth IRA providers on our list also offer local branches where consumers can get in-person help, and we consider that a major plus.

Summary of Money’s Best Roth IRA Accounts of 2023

• Fidelity Investments: Best Overall
• Charles Schwab: Best Investment Options
• Merrill Edge: Best Bonus Offer
• E*TRADE: Best for Low Trading Fees
• Vanguard: Best for Mutual Funds
• Betterment: Best Robo-Advisor Option
• Ally Invest: Best by an Online Banke4e520a483f4