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14 Best Roth IRA Accounts of October 2022

A Roth IRA is a great tool to help you save for retirement. Check out our picks for the best Roth IRA accounts below.Alana Benson Oct 21, 2022 Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. 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

BrokerNerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.FeesAccount minimumPromotionLearn more Fidelity IRALearn more on Fidelity's website 5.0/5 Best for Hands-On Investors$0no account fees to open a Fidelity retail IRA$0Get $100when 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 LiteLearn more on Interactive Brokers' website 5.0/5 Best for Hands-On Investors$0per trade$0Noneno promotion available at this timeLearn more on Interactive Brokers' website Merrill Edge IRALearn more on Merrill Edge's website 4.5/5 Best for Hands-On Investors$0per trade$0Up to $600when you invest in a new Merrill Edge Self-Directed account.Learn more on Merrill Edge's website E*TRADE IRALearn more on E*TRADE's website 4.5/5 Best for Hands-On Investors$0$0Noneno promotion available at this timeLearn more on E*TRADE's website SoFi Automated InvestingLearn more on SoFi Invest's website 4.9/5 Best for Hands-Off Investors0%management fee$0Freecareer counseling plus loan discounts with qualifying depositLearn more on SoFi Invest's websiteView More Our pick for Hands-On Investors

Fidelity IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.5.0/5Learn more on Fidelity's website Fees $0 no account fees to open a Fidelity retail IRA Account minimum $0 Promotion Get $100 when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply.Our Take Pros $0 trade commissions. Free research and data. Strong customer support. 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).

Interactive Brokers IBKR Lite

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.5.0/5Learn more on Interactive Brokers' website Fees $0 per trade Account minimum $0 Promotion None no promotion available at this timeOur Take Pros Large investment selection. Strong research and tools. Over 17,000 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.

Merrill Edge IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.4.5/5Learn more on Merrill Edge's website Fees $0 per trade Account minimum $0 Promotion Up to $600 when you invest in a new Merrill Edge Self-Directed account.Our Take 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.

E*TRADE IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.4.5/5Learn more on E*TRADE's website Fees $0 Account minimum $0 Promotion None no promotion available at this timeOur Take Pros No minimum balance. 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

SoFi Automated Investing

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.4.9/5Learn more on SoFi Invest's website Fees 0% management fee Account minimum $0 Promotion Free career counseling plus loan discounts with qualifying depositOur Take Pros Broad range of low-cost investments. Free management. Automatic rebalancing. Customer support. Access to certified financial planners. Cons Limited account types. No tax-loss harvesting. 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.

Wealthfront IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.5.0/5Learn more on Wealthfront's website Fees 0.25% management fee Account minimum $500 Promotion Get $50 customer bonus when you fund your first taxable Investment AccountOur Take Pros Get $50 customer bonus when you fund your first taxable Investment Account (NerdWallet promotion). Automatic rebalancing. Digital financial planning tools. Low management fee. Cons No large-balance discounts. No access to human advisors. No fractional shares. 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).

Betterment IRA

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.5.0/5Learn more on Betterment's website Fees 0.25% management fee Account minimum $10 Promotion 1 Year of free management on up to $5,000Our Take Pros Multiple investment options. Robust goal-based tools. Fractional shares mean all your cash is invested. Low management fee. 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.

E*TRADE Core Portfolios

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.4.0/5Learn more on E*TRADE's website Fees 0.30% management fee Account minimum $500 Promotion None no promotion available at this timeOur Take Pros Extensive investor tools and educational resources. Strong customer service. Low investment-expense ratios. Specialty portfolio options. Cons No tax-loss harvesting. 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.

Ally Invest Robo Portfolios

NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.4.5/5Learn more on Ally Invest's website Fees 0.0% with Cash-Enhanced Managed Portfolio; 0.3% otherwise Account minimum $100 Promotion None no promotion available at this timeOur Take Pros Solid investment selection. Integration for Ally bank and brokerage clients. Cons No tax-loss harvesting. 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:TD Ameritrade IRAAlly Invest IRACharles Schwab IRASchwab Intelligent PortfoliosFidelity Go Last updated on October 21, 2022

LendingClub High-Yield Savings

4.5NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.APY3.12% With $0 min. balance for APYLearn more at LendingClub Bank, Member FDIC

SoFi Checking and Savings

5.0NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.APY2.50% SoFi members with direct deposit can earn up to 2.50% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rates of 2.50% APY (with direct deposit) and 1.20% APY (without direct deposit) are current as of 09/30/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheetWith $0 min. balance for APY Bonus$300 Earn up to $300 with direct deposit. Terms apply.Learn more at SoFi, Member FDIC

Discover Bank Online Savings

5.0NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.APY2.35% Annual Percentage Yield (APY) is accurate as of 10/20/2022With $0 min. balance for APY Bonus$200 To get your $150 or $200 Bonus: What to do: Apply for your first Discover Online Savings Account, online, in the Discover App or by phone. Enter Offer Code NW922 when applying. Deposit into your account a total of at least $15,000 to earn a $150 Bonus or deposit a total of at least $25,000 to earn a $200 Bonus. Deposit must be posted to account within 30 days of account open date. Maximum bonus eligibility is $200. What to know: Offer not valid for existing or prior Discover savings customers or existing or prior customers with savings accounts that are co-branded, or affinity accounts provided by Discover. Eligibility is based on primary account owner. Account must be open when bonus is credited. Bonus will be credited to the account within 30 days of the account qualifying for the bonus. Bonus is interest and subject to reporting on Form 1099-INT. Offer ends 12/15/2022, 11:59 PM ET. Offer may be modified or withdrawn without notice.Requirements to qualifyLearn more 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. For more details about the categories considered when rating providers and our processes, read our full broker ratings methodology and our full robo-advisor ratings methodology. To recap our selections...

NerdWallet' s Best Roth IRA Accounts of October 2022

Fidelity IRA: Best for Hands-On InvestorsInteractive Brokers IBKR Lite: Best for Hands-On InvestorsMerrill Edge IRA: Best for Hands-On InvestorsE*TRADE IRA: Best for Hands-On InvestorsSoFi Automated Investing: Best for Hands-Off InvestorsWealthfront IRA: Best for Hands-Off InvestorsBetterment IRA: Best for Hands-Off InvestorsE*TRADE Core Portfolios: Best for Hands-Off InvestorsAlly Invest Robo Portfolios: Best for Hands-Off InvestorsTD Ameritrade IRA: Best for Hands-On InvestorsAlly Invest IRA: Best for Hands-On InvestorsCharles Schwab IRA: Best for Hands-On InvestorsSchwab Intelligent Portfolios: Best for Hands-Off InvestorsFidelity Go: Best for Hands-Off Investors

Frequently asked questions

What is the best bank for a Roth IRA? 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.Is it a good idea to invest in a Roth IRA? 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 do Roth IRAs earn? 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.Do I qualify for a Roth? 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.How easily can I access money in my Roth IRA? 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.Can I contribute to a Roth IRA if I already have a 401(k) or a traditional IRA? 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.How do I open a Roth IRA? 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.How will my Roth IRA grow? 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.

About the author

Alana Benson

Alana Benson is an investing writer who covers socially responsible and ESG investing, financial advice and beginner investing topics. Her work has appeared in The New York Times, The Washington Post, MSN, Yahoo Finance, MarketWatch and others. Read moreEmail

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