If the thought of paying taxes on money in retirement makes you nervous, (who knows what the tax rate will be by then?) consider a Roth IRA. You’ll invest with after-tax money, so when you go to withdraw it, it’ll be tax-free. It’s also a good option if you think you’ll earn more money over time, and therefore you’ll be in a higher tax bracket when you retire. You’ll need to find a company to invest with, as a Roth IRA account holds the investments you make, so different companies have different investment opportunities. They may also have different fees, strengths and weaknesses and other features, so to make it easier for you, we put together this list of the top ten companies to open a Roth IRA.
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1. Vanguard: Best for low-cost mutual funds
Vanguard boasts that 90% of their no-load mutual funds perform better than peer-group averages over the past ten years. Another great thing about Vanguard is the low fees and low-cost investment options. The company was founded with the idea of helping investors invest in the stock market at a low cost. It doesn’t lend itself well to a lot of trading, but rather is perfect for the investor who wants to hold onto their investments over the long-term. Click here to open a Roth IRA account at Vanguard.
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2. Fidelity: Best for Customer Service
Fidelity is another big name in the investment business. It offers a fee of $0 for transactions and $0 account minimum. They also have a lot of online help, so that you can do your own research on the website. Opening an account is very easy, and traditional investors who like to research, buy and hold will find Fidelity a comfortable home. Click here to open a Roth IRA account at Fidelity.
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3. Charles Schwab: Best Overall
If you think you might be happy with a robo-advisor, Charles Schwab has an excellent one that is free to use. They offer over 4,000 no-load, no transaction fee funds to choose from, and no account minimum. There are great resources on the website, and guidance is available 24/7. There’s also a mobile app. Click here to open a Roth IRA account at Charles Schwab.
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4. TD Ameritrade: Best for Beginners
TD Ameritrade was purchased by Charles Schwab in a $26 billion dollar deal, although for now they will treat them as separate entities. If that’s true, TD Ameritrade is great for beginning investors, thanks to its extensive research and data base. There are videos, online seminars, in-person presentations at banks—you’ll definitely find out whatever you need to know. You can use it if you’re a more experienced investor, because you enter your skill level (rookie, scholar or guru) before you start researching. Another great feature is their mock trading feature, where you get to invest $100,000 in practice money to get a feel for investing. Click here to open a Roth IRA account with TD Ameritrade.
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5. E-Trade: Best for online management
E-Trade was named 2019’s number one online broker, and for good reason. It’s easy to open and manage your account and make sure your reaching your financial goals with E-Trade. They have options for self-directed investing or managed account. Until August 31 if you invest $5,000, they’ll give you up to $2,500 as a bonus. If you’re an active investor, E-Trade makes it easy to buy and sell. Click here to open a Roth IRA account with E-Trade.
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6. You Invest by JP Morgan: Best for Chase card holders
You Invest connects to Chase’s existing online banking app. If you’re a Chase customer already, you’ll be comfortable with You Invest’s platform. If you want a managed account, you’ll need $2,500 but if you want to do it yourself, you can open an account with as little as $1. They’re currently offering up to $725 when you open and fund a new account. Click here to open a Roth IRA account with You Invest by JP Morgan.
7. Betterment: Best Robo-Advisor
Betterment is a low-fee (.25%) robo-advisor account. If you’re looking for someone else to do the investing for you, Betterment is a great choice. You just answer questions regarding your tolerance for risk and your goals, and the robo-advisor finds investments that you’re your needs. They have two levels of service: Digital manages your money from a selection of exchange-traded funds, and Premium is for those with $100,000 to invest. Click here to open a Roth IRA account with Betterment.
8. Merrill Edge – Bank of America: Best for Bank of America account holders
If you already have an account with Bank of America, you probably know they have branches everywhere. Also, if you open an account with Merrill Edge, they often offer things like bonus credit card rewards. Lastly, you can get help from a real person (if you want it) at any branch of Bank of America. There’s also a ton of educational materials on the site. They’re offering a $600 bonus if you invest at least $20,000 right now. Click here to open a Roth IRA account with Merrill Edge – Bank of America.
9. Fundrise: Best for Real estate
If you’re interested in adding real estate to your Roth IRA account, consider Fundrise. They have real estate investment trusts (REIT’s), private and commercial properties for you to invest in. Asset management fees are 1% and there’s a $500 minimum to open an account. Fundrise is a good way for the average person to invest in multiple properties. Click here to open a Roth IRA account with Fundrise.
10. Ally Invest: Best for Managed Portfolios
Ally Invest features a $0 fee for trading, so for those who like to buy and sell, Ally Invest could be perfect for you. It also has a $0 account minimum, so you can invest as little or as much as you’d like. If you want someone to manage your portfolio for you, you can start with as little as $100, and you can choose from socially responsible, tax-optimized, or income portfolios. Mutual funds carry a $9.95 fee for trading, though, so customers who like mutual funds should probably buy and hold them. Click here to open a Roth IRA account with Ally Invest.
Last Thoughts
There are many things to consider when you’re deciding where to put your money. You need an investment firm that’s perfect for you, not perfect for your neighbor. These companies all have strengths and weaknesses, but one is bound to be right for you.