Where Is the Best Place to Open a Roth IRA Account in June 2024?

What Is the Best Place to Open a Roth IRA Account in 2024?

Looking for the best place to open a Roth IRA account in 2024? We've evaluated and ranked nine top providers to help you make an informed decision. Among them, Robinhood stands out as the best place to open a Roth IRA account in 2024, offering a generous matching IRA contribution and other compelling benefits.

Eight Best Roth IRA Accounts

Below is a summary of our top nine Roth IRA account providers in 2024, followed by detailed descriptions of each.

Detailed Descriptions

Robinhood: Best for Matching IRA Contribution

Robinhood offers a unique benefit: a matching IRA contribution, up to 3% with a Robinhood Gold membership. They provide commission-free trading in stocks, options, and ETFs, and also offer cryptocurrency trading. Robinhood Gold members earn a 5% APY on cash balances up to $2.25 million.

SoFi Invest: Best for Access to Certified Financial Planners (CFPs)

SoFi Invest stands out by offering access to certified financial planners, providing valuable financial advice without specific investment recommendations. They offer commission-free trading of stocks and ETFs, and a robo-advisor service for hands-off management. Although their IRA matching program ended in April 2024, it may return in the future.

Charles Schwab: Best for Wide Investment Selection

Charles Schwab provides a vast selection of investments, including U.S. and foreign stocks, mutual funds, ETFs, options, futures, and fixed-income securities. They offer automated investment management through Schwab Intelligent Portfolios with no annual advisory fee for accounts with a minimum of $5,000.

Fidelity: Best for Customer Service

Fidelity excels in customer service, with 24/7 live phone support and over 200 branch locations. They offer a wide range of investments and a robo-advisor service, Fidelity Go, which requires no minimum investment and manages the first $25,000 for free.

Webull: Best for Frequent Trading

Webull is designed for frequent traders, offering commission-free trading of stocks, ETFs, options, and futures. They provide advanced investment tools, a paper trading feature, and a community for sharing investment ideas.

E*TRADE: Best for Options Trading

E*TRADE is ideal for advanced traders, particularly in options. They offer comprehensive options tools and reduced per-contract fees for high-volume traders. E*TRADE also provides a managed investment option, Core Portfolios, with a $500 minimum investment and a 0.30% annual advisory fee.

Ally Invest: Best for Investing with Online Banking

Ally Invest integrates with Ally Bank, offering a range of banking services alongside investment options. They provide commission-free trading of stocks, options, and ETFs, and access to over 17,000 no-load mutual funds. Their Robo Portfolios require a $100 minimum investment.

Betterment: Best for Hands-Off Robo-Advisor

Betterment offers automated investment management with multiple portfolio options, including crypto portfolios. They charge a 0.25% annual advisory fee for standard accounts and 0.40% for Premium accounts. Betterment also provides a no-fee checking account with cash-back Visa debit card.

How We Found the Best Online Roth IRA Brokerages of 2024

We evaluated the best Roth IRA accounts based on:

1. Specialization.
2. Fee structure.
3. Minimum initial investment.
4. Investment selection.
5. High-interest savings options.
6. Sign-up bonuses.
7. Customer service availability.
8. Managed portfolio options.

How to Select the Best Roth IRA Brokerage Account for You

To find the best Roth IRA account for you:

1. Identify the benefits that matter most to you.
2. Compare fee structures.
3. Check minimum initial investment requirements.
4. Review the available investment options.
5. Look for high-interest savings options.
6. Consider sign-up bonuses.
7. Evaluate customer service availability.
8. Check for managed portfolio options.

Roth IRA Pros and Cons

Pros:

• Tax-free withdrawals after age 59 ½.
• Contributions can be withdrawn anytime, tax-free.
• Tax deferral of investment earnings.
• No required minimum distributions (RMDs).

Cons:

• Contributions are not tax-deductible.
• Low contribution limits ($7,000 per year; $8,000 if 50 or older).
• Income limits for contributions ($161,000 for singles; $240,000 for married couples).
• Early withdrawal penalties for investment earnings before age 59 ½.

Frequently Asked Questions (FAQs)

How will my Roth IRA grow? Your Roth IRA grows through regular contributions and investment earnings. Favor equity-type investments for long-term growth.

How easily can I access my money? You can withdraw contributions tax-free at any time. However, early withdrawal of earnings is subject to taxes and penalties.

What is the best kind of Roth IRA? The best Roth IRA depends on your investment style. Self-directed investors may prefer brokerage accounts, while those seeking hands-off management might choose a robo-advisor.

What is the 5-year rule for a Roth IRA? Earnings cannot be withdrawn tax-free until at least five years after your first contribution.

How much will a Roth IRA grow in 20 years? With a 5% annual return and $7,000 annual contributions, your Roth IRA will grow to $231,464 in 20 years. At a 7% return, it will grow to $286,972.

What are the tax implications? Withdrawals after age 59½ and five years in the plan are tax-free. Contributions are not tax-deductible.

Can I contribute to a Roth IRA if I have a 401(k) or traditional IRA? Yes, as long as your income is within limits. Contributions to all IRAs combined cannot exceed the annual limit.