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Best Roth IRAs of 2022

Learn which Roth IRA account is best for you

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A Roth IRA account is a type of retirement savings and investment account with unique tax advantages. With a Roth IRA, you can save for retirement with after-tax dollars and make qualified withdrawals in the future with no capital gains tax or penalties. While everyone’s tax situation is different, those with a long-time horizon before retirement are poised to get the best benefits from this type of account.

Here’s a look at top-rated Roth IRA accounts, based on data we reviewed to determine which brokers are the best for these accounts, to help you make the best choice for your investments.

If you’re shopping for the best Roth IRA account, it’s important to look at fees, account minimums, available investments, and other account features to determine which is the best Roth IRA for your needs.

Fidelity Investments


Get $100 when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply. Offer Disclosure.

  • Account types: Traditional brokerage, traditional IRA, Roth IRA, Simplified Employee Pension self-employed (SEP) retirement accounts, others
  • Fees: No recurring fees or account minimums, commission-free trading
  • Key features: Low-cost robo-advising available. No-fee mutual funds available.
Why We Chose It

Fidelity Investments is our top choice for the best Roth IRA account provider. That’s the result of a combination of very low costs and a wide variety of investment options. With a Fidelity Roth IRA, you can trade nearly any major stock, exchange-traded fund (ETF), or mutual fund available, including Fidelity’s family of low-cost funds.

Fidelity offers a suite of accounts and products that would allow you to handle all your finances with one login, including your banking and investments. While many users will feel comfortable using the main, self-directed Fidelity Roth IRA for free, you can also choose a robo-advisor version for a low cost or a full-service investment advising service for a higher fee. Different minimums and costs apply to those accounts.

With a funded account, you can buy from a huge list of more than 7,000 domestic and international stocks and ETFs, more than 10,000 mutual funds, options, fixed income investments, and precious metals. Access to such a wide range of investments, mostly fee-free, makes the Fidelity Roth IRA an excellent choice.

Pros & Cons
Pros
  • Roth IRA with no recurring fees or minimum-balance requirements available

  • Commission-free trading

  • Options to upgrade for additional advising and support

  • 0% expense ratio mutual funds

Cons
  • Only self-service investment account is fee-free

  • High fees for phone and broker-assisted trades

Charles Schwab


Charles Schwab

Charles Schwab

  • Account types: Traditional brokerage, traditional IRA, Roth IRA, Simplified Employee Pension self-employed (SEP) retirement accounts, others
  • Fees: No recurring fees or account minimums, commission-free trading
  • Key features: No-fee robo-advising. Good for handling all finances with one company.
Why We Chose It

Charles Schwab made the list of best Roth IRA accounts due to low costs, a large list of supported investments, and the ability to handle all your banking and investment needs with one provider. Schwab’s automated investment program, Schwab Intelligent Portfolios, is a standout offering with no commission or advisory fees. Schwab Intelligent Portfolios supports taxable and retirement accounts, including the Schwab Roth IRA.

The brokerage’s Roth IRA account has no minimum deposit and no recurring fees. Users can trade many securities, including stocks and ETFs, without commissions. Schwab accounts give you access to most major U.S. and international stocks, more than 2,000 ETFs, thousands of mutual funds, bonds and other fixed income securities, and others.

The fee-free robo-advisor product may be a major draw if you're less knowledgeable about picking investments. You also might like that Schwab offers free checking and savings accounts, with no fee for ATMs anywhere in the world. But even if you only want a simple Roth IRA account offering, the Schwab Roth IRA is a good option to consider.

Pros & Cons
Pros
  • No recurring fees or minimum-balance requirements

  • Commission-free trading

  • No-cost robo-advisor service

  • Good choice for all banking and investment needs

Cons
  • Monthly fee required for full-service advising

  • High fee for broker-assisted trades

Merrill Edge


  • Account types: Traditional brokerage, traditional IRA, Roth IRA, Simplified Employee Pension self-employed (SEP) retirement accounts, others
  • Fees: No recurring fees or account minimums, commission-free trading
  • Key features: Benefits for loyal Bank of America and Merrill Lynch customers with high combined balances
Why We Chose It

Merrill Edge is the consumer investment side of Bank of America and a legacy of the original Merrill Lynch brokerage firm. We like the Roth IRA from Merrill Edge because of its low costs and the variety of investments available for self-directed accounts. This account has no minimum balance requirements or recurring monthly fees. Robo-advising and full-service advising are available for a fee.

With a funded account, you can invest in stocks, bonds, options, ETFs, and “well-known mutual funds.” Most trades are commission-free when you enter them yourself online.

The best benefits come to those who have high combined balances at Bank of America and Merrill Edge. Preferred Rewards benefits start at $20,000 in combined balances and include discounts and perks with banking, credit card, lending, and investment products. As your balance increases and passes certain thresholds, those benefits increase. If you’re excited by the idea of getting more benefits as you save and invest, the Merrill Edge Roth IRA could be right for you.

Pros & Cons
Pros
  • No recurring fees or minimum balance requirements available

  • Commission-free trading

  • Discounts and benefits for loyal customers

Cons
  • Shorter menu of available investments than some competitors

  • Expensive broker-assisted trade cost

Wealthfront


  • Account types: Traditional brokerage, traditional IRA, Roth IRA, Simplified Employee Pension self-employed (SEP) retirement accounts, others
  • Fees: 0.25% annual advisory fee for robo-advisory, $0 trade fee
  • Key features: Automated portfolio management
Why We Chose It

Wealthfront is an automated robo-advisor. New customers answer a few questions about their age, investment goals, and risk tolerance. Based on your answers, you then are assigned to a professionally-designed portfolio for people with a similar investor profile. It’s very easy to use, and you don’t need a lot of investment knowledge. Portfolios are made up of ETFs.

With any Wealthfront investment account, including the Roth IRA, there’s a required annual fee of 0.25% of your portfolio value. But that’s likely all you will pay, as trades and portfolio management are included with that fee. Savvy investors may prefer to pick their own investments to avoid paying the fee, but less-experienced investors may find this to be a bargain.

While you can take a mostly hands-off approach, there are options to pick specific investment themes, such as socially responsible investments or cryptocurrency funds. You could handle all your banking and investment needs at Wealthfront, but the automated investment product is what makes it stand out for Roth IRA retirement accounts.

Pros & Cons
Pros
  • Automated investments based on your goals and needs

  • Predictable costs and no trading fees

  • Support for socially responsible investments, cryptocurrency, and other themes

Cons
  • Required fee based on your portfolio size

  • Limited investment types supported

M1 Finance


M1 Finance

M1 Finance

  • Account types: Traditional brokerage, traditional IRA, Roth IRA, Simplified Employee Pension self-employed (SEP) retirement accounts
  • Fees: No recurring fees or trading commissions
  • Key features: Automated investment portfolios
Why We Chose It

M1 Finance offers a unique method of investing in a Roth IRA. In some ways, it’s a combination of a robo-advisor and self-directed brokerage account. You can pick single stocks or funds as part of your portfolio, called an investment “Pie.” Or you can pick a pre-designed “Expert Pie” aligned with your goals.

Every time you add funds to your account or make a withdrawal, M1 automatically splits it up among your Pie investments. It also rebalances for you periodically to keep your portfolio in line with your Pie selections. There are no fees other than when you close or transfer out an account.

With additional banking and lending products, it’s easy to keep all your finances at M1. The Roth IRA requires a $500 minimum investment to get started. The low costs and unique Pie investment model make it a good choice for a wide range of investors.

Pros & Cons
Pros
  • No recurring fees or commissions

  • Semi-automated investing based on portfolios or your investment selections

  • Can handle all banking and investment needs

Cons
  • Fees to close or transfer out an account

  • $500 account minimum

  • No human financial advising

Betterment


Betterment

Betterment

  • Account types: Traditional brokerage, traditional IRA, Roth IRA, Simplified Employee Pension self-employed (SEP) retirement accounts
  • Fees: 0.25% or 0.40% annual fee
  • Key features: Fully automated investing with human advising available
Why We Chose It

Betterment is an automated robo-advisor, where your investments are assigned to a professionally-designed portfolio optimized for investors with similar needs. The basic plan requires a 0.25% annual fee. If you upgrade to work with a human advisor, you’ll pay 0.40%. The human-assisted plan requires a $100,000 minimum investment, while the basic doesn’t have any minimum requirements.

The tools at Betterment help you know if you’re on track to meet your retirement goals. The basic robo-advising platform is easy to use and suitable for nearly any investment goal. If you have the higher minimum balance and are willing to pay the higher 0.40% fee, you can get many of the benefits of working with a traditional financial advisor as well.

Betterment makes it possible to do your banking and investing under one roof. While you have less control over your specific investments, this robo-advising platform is ideal for those who want a hands-off investment experience.

Pros & Cons
Pros
  • Automated investing based on your goals

  • Option to upgrade for access to a human advisor

  • Can do all banking and investing with one login

Cons
  • Minimum 0.25% annual fee for investments

  • High minimum investment and a higher fee for human advisor access

  • Somewhat limited investment options

Final Verdict

A Roth IRA account may play a key role in your long-term financial plans. If you’re a younger investor with several decades of work and investing ahead, the tax benefits of a Roth IRA can be compelling. If you’re looking to start retirement investing or want to improve your retirement investing strategy, any of these Roth IRA providers could be a good fit for your personal finance needs.

Compare the Best Roth IRAs

Company Account Types Fees Key Features
Fidelity Traditional brokerage, traditional IRA, Roth IRA, SEP IRA retirement accounts, others No recurring fees or account minimums, commission-free trading Low-cost robo-advising available. No-fee mutual funds available
Charles Schwab Traditional brokerage, traditional IRA, Roth IRA, SEP IRA retirement accounts, others No recurring fees or account minimums, commission-free trading No-fee robo-advising, good for handling all finances with one company
Merrill Edge Traditional brokerage, traditional IRA, Roth IRA, SEP IRA retirement accounts, others No recurring fees or account minimums, commission-free trading Benefits for loyal Bank of America and Merrill Lynch customers with high combined balances
Wealthfront Traditional brokerage, traditional IRA, Roth IRA, SEP IRA retirement accounts, others 0.25% annual advisory fee, $0 trade fee Automated portfolio management
M1 Finance Traditional brokerage, traditional IRA, Roth IRA, SEP IRA retirement accounts No recurring fees or trading commissions Automated investment portfolios
Betterment Traditional brokerage, traditional IRA, Roth IRA, SEP IRA retirement accounts 0.25% or 0.40% annual fee Fully automated investing with human advising available

How Does a Roth IRA Work?

A Roth IRA is a retirement account where contributions are made with after-tax dollars, and qualified withdrawals in the future are tax-free. “IRA” is an acronym for individual retirement account. Other types of IRA accounts also have tax benefits, but they may differ from the unique after-tax contributions of Roth-designated retirement accounts.

When you contribute to a Roth IRA, your contributions are not tax-deductible in the current year. While you’ll pay regular income taxes on those funds in the year you contribute them, they can grow in a Roth IRA account indefinitely, and you won’t have to pay taxes on withdrawals during retirement. You’re also allowed to withdraw tax-free for a first-time home purchase.

Are There Income Limits for Roth IRAs?


If you are married filing jointly, you can contribute the full annual limit if you earn up to $204,000. If you earn over $214,000, you are not allowed to contribute. If you are a single filer, head of household, or married filing separately tax return, the phaseout begins at $129,000. The maximum income to participate with these tax statuses is $144,000.

How Much Can I Contribute to a Roth IRA Per Year?

The IRS sets annual contribution limits for Roth IRA accounts. Even if your income is below the contribution threshold, you can’t contribute more than the IRS annual limit. For tax years 2019 to 2022, the limit is $6,000 if you’re under 50 years old or $7,000 if you’re 50 or older. You can never contribute more than your annual earnings, although a spouse’s earnings can be considered part of your combined income when you’re married filing jointly.

Roth IRA vs. Traditional IRA

Roth IRA Traditional IRA
Best for those with a long time horizon before retirement Better for those nearing retirement
After-tax contributions; income is not deducted on tax return Pre-tax contributions; income is deducted on contribution-year tax return
Qualified withdrawals are tax-free Qualified withdrawals are taxed at your regular income tax rate

How Should You Choose the Best Roth IRA?

If you’ve decided a Roth IRA is best for your retirement needs and goals, it’s essential to take the time to pick the best account for your unique needs. When deciding where to open a Roth IRA account, it’s important to consider any ongoing account fees, trading fees, the type of investment advice you want, and how much involvement you want with your investments.

A self-directed investment account is best for some investors because you can pick any stocks, ETFs, mutual funds, and other assets you choose. For others, a robo-advisor or completely managed portfolio could make more sense, even if that advice and support requires an additional fee.

Keeping costs low is essential for your long-term returns, as is your available list of investments. There’s no perfect Roth IRA for everyone, but there is likely a best Roth IRA for you.

Methodology

We are dedicated to providing readers with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience, and customer service. A rating scale was established based on these criteria, collecting thousands of data points that were weighed into a scoring system.

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