Best Roth IRA Accounts of August 2024

A Roth IRA is a retirement account that you contribute after-tax income to, and then withdraw the money tax-free. You can put in up to $7,000 each year if you’re below age 50, or $8,000 if you’re 50 or older. That amount is reduced if you exceed certain income levels.

Read More: The Surprising Way You Can Get Guaranteed Retirement Income for Life

The big difference between a Roth IRA and its traditional counterpart is linked to paying taxes. Traditional IRAs are centered on tax-deferred growth potential. Roth IRAs provide tax-free growth potential. You receive tax-free funds from your Roth IRA once you meet the qualifications, but you’re required to pay taxes on the funds from a traditional IRA when you receive them.

If you are interested in opening a Roth IRA, it’s helpful to explore your options to find the best Roth IRA for your needs. You’ll find a breakdown of the best Roth IRA accounts below.

Best Roth IRA Providers of August 2024

Here’s a quick look at the best Roth IRA providers so that you can compare fees and promotional offers. These providers were selected based on factors such as cost, investment options, customer support and technology features.

1. Best for Hands-Off Investors: Betterment

One of the first robo-advisors, Betterment remains one of the largest such advisors in the market. It offers customized plans based on your answers to a survey about your financial goals.

When you sign up for an account, you can set goals and roll over previous 401(k) plans. The digital advisor manages your investments, rebalancing your portfolio automatically. With access to low-cost ETFs and fractional share options, you can build a robust investment portfolio.

2. Best for Self-Directed Investors: Charles Schwab

Charles Schwab earned above-average marks in the 2024 J.D. Power Award for Self-Directed Investor Satisfaction, cementing its reputation as a great company for investors who like to take control.

Schwab offers support around the clock and provides investors with an assortment of resources and financial services. Seasoned investors appreciate the low fees, while less experienced investors benefit from access to helpful tools.

3. Best for Hands-On Investors: E-Trade

In the 1980s, online trading wasn’t even on the radar for most companies — but E-Trade was a pioneer in the field. Now it’s part of banking giant Morgan Stanley. The merger, completed on Oct. 2, 2020, brings E-Trade’s revolutionary platform to Morgan Stanley.

E-Trade has a long history and provides a wide array of investment options for those who like to diversify. Customers have access to thousands of commission-free mutual funds. E-Trade is a well-known online brokerage site that puts investing in the hands of its customers through an easy trading platform.

4. Best for Mutual Funds: Fidelity

Fidelity is a big name in retirement savings in the United States. The company offers a good mix of physical locations and online investment services to suit your preferences. The company won the 2024 J.D. Power Award for Self-Directed Investor Satisfaction.

Fidelity offers an impressive number of mutual funds and exchange-traded funds. It does not impose trading fees, giving Roth IRA investors a great deal of choice. Also, customers have access to thousands of mutual funds with no transaction fees.

If that feels overwhelming, you can do your research using the available reports and other helpful materials provided by this brokerage. In addition, customer service representatives are available to help you sort through options.

5. Best for Convenience: Merrill Edge

Merrill Edge is part of Bank of America, Member FDIC, which is good news for account holders. Merrill Edge is a respected name, and it gains even more credibility from its association with Bank of America, one of America’s most valuable banking brands.

Merrill Edge is relatively simple, making it usable for a broad swath of investors. You won’t be intimidated if you’re just starting to dabble in financial management, and you’ll be able to do everything you need to if you’re experienced.

6. Best for Beginners: SoFi

SoFi brings simplicity to the table, making it an excellent choice for new investors. You’ll have access to everything you need to manage your Roth IRA.

Several tools are available to help you evaluate your goals and select the product that’s best for you. When you need extra assistance, you can speak to a financial planner about your situation at no cost and learn more about your investment options.

7. Best Value for Investors: Vanguard

Vanguard earned its reputation as a leading mutual fund provider. The company has more than 200 mutual funds and over 70 ETFs that carry the Vanguard name.

In addition to its impressive collection of funds, Vanguard offers a low-cost fee structure unrivaled in the market. Customers pay 82% less than the industry average. There is a $25 annual fee for each account, but is a way to waive this. You must have at least $5 million in qualifying assets.

8. Best for Research Tools: Interactive Brokers

If you want to handle your own investment portfolio with a careful eye on all of your options, then the robust selection of research tools available through Interactive Brokers could be a good fit. The platform offers thousands of no-transaction-fee mutual funds, which can help you build a portfolio without breaking the bank.

9. Best for Chase Account Holders: J.P. Morgan Wealth Management

J.P. Morgan Wealth Management offers an easy-to-use platform to help you grow your portfolio. It’s an especially useful option for Chase users because the app seamlessly connects all of your other Chase accounts. The downside is that you won’t find too many investment research tools.

Currently, there is an offer available to receive up to $700 in commission-free trades online if you meet all qualifications after opening a J.P. Morgan Self-Directed Investing account. This applies to retirement or a general account. It must be opened on the promotion page in order to qualify. This offer expires on Oct. 11, 2024.

10. Best for Hands-Off Personalization: Wealthfront

For investors who want to customize their portfolio without digging through hundreds of different mutual fund options, Wealthfront offers the best of both worlds. When you open the account, you’ll be able to easily customize the portfolio based on your goals, risk tolerance and interests. For example, you could ask for a portfolio focused on tech or ESG principles. From there, you’ll allow the robo-advisor to handle the building of your portfolio. You can check in to make adjustments to your strategy at any time. But you’ll give up all access to human advisors because Wealthfront doesn’t provide any human advisor options.

11. Best for Women: Ellevest

Ellevest is a platform focused on helping women build brighter financial futures. It takes the issues facing women, like pay gaps and longer lifespans, into account when building your investment portfolio. Additionally, Ellevest offers educational resources to help you take control of your financial situation. If you are looking for a women-centered approach to investing, Ellevest could be the right fit.

12. Best for Regular Traders: Ally Invest

If you want to make regular trades through your Roth IRA, Ally Invest could be the right fit. As a low-cost platform, you can seamlessly make trades as you want to with a straightforward fee structure attached. Plus, you’ll have access to a wide range of resources to help you do the appropriate research before making any trades. But if you prefer a hands-off option, Ally Invest delivers with a Robo Portfolio, which takes your preferences into account as it builds out a portfolio that suits your needs.

13. Best for Options Traders: Firstrade

If you want to trade options within your Roth IRA, Firstrade’s lack of contract fees is a rare opportunity. Additionally, the account doesn’t come with any trade or account minimums to get started. You can find over 11,000 mutual funds and plenty of stocks and bonds.

Note: Options trading is generally a risky investment strategy best reserved for experienced investors.

14. Best for Precious Metal Investors: Noble Gold

Gold is a type of precious metal that many investors want to hold in their investment portfolios. If you want to buy gold through your Roth IRA, Noble Gold presents a valuable opportunity. You can invest in physical gold through this account.

15. Best for Building a Portfolio Slowly: Acorns

While it might be nice to contribute thousands of dollars to your Roth IRA each year, that’s simply not possible for everyone. If you want to tackle the goal of a robust retirement savings account slowly, Acorns can help. You can set up small recurring contributions, starting with just $5 from each paycheck. The manageable amount can help you build the habit of saving money, which you can increase over time.

16. Best for Matching Funds: Robinhood

Robinhood offers a rare opportunity to pursue matching funds through your Roth IRA. As of writing, Robinhood’s IRA match is equal to 3% with Robinhood Gold or 1% without Robinhood Gold. With that, you’ll automatically get 3% or 1% of every dollar you contribute to your Roth IRA. But you’ll have to keep the funds in your Robinhood IRA for at least 5 years to hold on to those funds.

17. Best for Bonus Life Insurance: Stash

When you work with Stash, you’ll pay $3 to $9 per month. If you pay $3 per month, the plan comes with a $1,000 life insurance policy. If you pay $9 per month, the plan comes with a $10,000 life insurance policy. With a Stash account, you have the option to open a Roth IRA. You can make automatic contributions and use the advice from Stash to build a portfolio that suits your needs.

Where Is the Best Place To Invest in a Roth IRA?

The best place is through a bank or broker that is convenient for you. When choosing the best Roth IRA option, there are several factors to keep in mind before you open an account:

• Account minimums: Make sure you have enough money to meet the minimum requirement.

• Contributions: Contributions to a Roth IRA are not tax-deductible.

• Fees: They can add up quickly and take away from your earnings.

• Income: Your income determines how much money you’re allowed to contribute to a Roth IRA each year.

• Growth: Find out how your earnings compound.

• Qualifications: Income restrictions determine eligibility for Roth IRAs. You might not be eligible if you make too much money.

A robo-advisor is an automated system that assesses an individual’s financial situation and needs. Customer can respond to surveys, and this information gathered can suggest investment strategies and periodically rebalance portfolios.

An online broker allows clients to use a digital trading platform. Investors can use an online broker to buy and sell investments.

Final Take

A Roth IRA is a useful place to build retirement savings. If a Roth IRA suits your retirement planning goals, then exploring all of your options is useful. Once you find an account that suits your needs, don’t wait to move forward.

FAQ

Here are the answers to some of the most frequently asked questions about Roth IRAs.

• Is a Roth IRA better than a bank account?

  • A Roth IRA is not intended to replace your checking or savings account. Instead, a Roth IRA is designed to help you save for retirement. If you want to use an account to save for retirement, a Roth IRA might be a good fit.

• What is the downside of a Roth IRA?

  • The downside of a Roth IRA is that you could be penalized for accessing the funds before you reach age 59 1/2. If you need to use the funds before that date, you may face a penalty.

• How does money grow in a Roth IRA?

  • Within a Roth IRA, you can invest your funds to grow. Additionally, you can make contributions each year to grow your balance over time.

Sarah Sharkey and Andrew DePietro contributed to the reporting for this article.

Data is accurate as of Aug. 5, 2024, and is subject to change.

GOBankingRates is a personal finance and consumer interest rate website and an online marketing company serving top-tier banks, credit unions and other financial services organizations. Some companies mentioned in this article might be clients of GOBankingRates, which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by the companies included in the article. All fees and rates are subject to change at the issuers’ discretion. Some interest rates might be short-term or promotional offers only, and it is possible additional terms and conditions must be met to obtain the interest rates listed. Rates and availability might vary by region. Verify terms and conditions before opening an account.

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This article has been updated with additional reporting since its original publication.

This article originally appeared on GOBankingRates.com: Best Roth IRA Accounts of August 2024