Best ROTH IRA Providers


2018 best ROTH IRA providers. Top-rated, low-cost online SEP, Simple, Traditional, and Rollover IRA providers to open an individual retirement plan investment account.




Rating: TD Ameritrade rating

ROTH IRA Setup Fee: $0
ROTH IRA Annual Fee: $0
ROTH IRA Termination Fee: $0

First in our list of top ROTH IRA providers, TD Ameritrade offers investors an excellent selection of trading tools, including two trading platforms and three mobile apps. The broker also has an ample supply of mutual funds - over 14,000 (!). 296 ETF's can be traded free of charge. A company associate can be reached over the phone or at one of the firm's 450+ local branches. TD Ameritrade is one of the few firms not to charge a fee for closing an IRA account, and its non-retirement accounts have no fees, either.

Barron’s magazine rated TD Ameritrade #1 for Beginner Investors and #1 for Long Term Investing, and gave it top scores in the Mobile Trading, Range of Offerings, Research Amenities, Customer Service and Education categories.

TD Ameritrade ROTH IRAs have no fees: there are no setup, maintenance, inactivity, or annual IRA fees. A retirement account can be opened with no money down.

Learn more in TD Ameritrade IRA Review



Rating: Ally Invest rating

ROTH IRA Setup Fee: $0
ROTH IRA Annual Fee: $0
ROTH IRA Termination Fee: $50

Ally Invest customers pay only $4.95 for stock and ETF trades - one of the lowest commissions among online brokerage firms on the list. Investors making 30 trades per quarter or with $100K account balance get even lower rate - $3.95. This ROTH IRA provider has no IRA accounts fees, aside from a closure charge. Ally offers over 11,000 mutual funds and 100 ETF's that can be traded commission free. Mutual funds transaction cost are also some of the lowest in the industry - just $9.95 per trade.

Learn more in Ally Invest IRA Review



Rating: Etrade rating

ROTH IRA Setup Fee: $0
ROTH IRA Annual Fee: $0
ROTH IRA Termination Fee: $0

Although E*Trade charges an about-average $6.95 for stock and ETF transactions, frequent traders do receive a $2 discount. They also have access to the broker's advanced desktop platform and live streaming of CNBC on the broker's mobile app. E*Trade has 30 branch locations, on-line chat, and 24/7 phone service. More than 100 ETF's are available that have no commissions. Mutual fund investors also have more than 4,400 products that carry no load and no transaction fee, one of the largest lists in the industry.

Learn more in E*Trade IRA Review



Rating: Vanguard rating

ROTH IRA Setup Fee: $0
ROTH IRA Annual Fee: $0
ROTH IRA Termination Fee: $0

Last in the best ROTH IRA providers list is Vanguard which is known for its excellent selection of mutual and exchange-traded funds. The broker is keeping funds expense ratios at around 0.50%, and many are below that. Customers with large holdings in Vanguard funds can receive discounts on fees. Some account fees can be avoided simply by signing up for electronic delivery of statements. While the firm doesn't have a desktop platform or a very advanced website, securities can be traded on the Vanguard mobile platform. In addition to Apple and Android devices, Vanguard's app can also be used on Amazon Kindle.

Learn more in Vanguard IRA Review



Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
TD Ameritrade $6.95 $49.95 $6.95 + $0.75 per contract $0 $0
Ally Invest $4.95 $9.95 $4.95 + $0.65 per contract $0 $0
Etrade $6.95 $19.95 $6.95 + $0.75 per contract $0 $0
Vanguard $7-$20 $8-$35 $20 + $1.00 per contract $20* see

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
TD Ameritrade
Ally Invest
Etrade
Vanguard



Is ROTH IRA Safe Overview


Retirement savers who have any concerns about the safety of a Roth or Traditional IRA should be aware of the specific protections that banks and brokerage firms provide. This article will explore such safeguards and see if an IRA is safer at a bank or broker.


Bank Traditional and Roth IRA's Safety


Roth and Traditional IRA's are governed by the same laws and have the same level of safety, generally speaking. It should be noted that the two retirement accounts have different policies, such as when withdrawals must be made and how the two accounts are taxed. Such regulations typically do not affect the safety of the accounts, and both Roth and Traditional IRA's have the same level of protection.

What does affect the safety of an IRA is the insurance defending them. Both Roth and Traditional accounts can be opened either at a bank or a brokerage house. If it is opened at a bank, the IRA is protected by the FDIC. This includes up to $250,000 of insurance. Keep in mind that this amount is the total insurance provided by the bank to the customer. So, for example, if you had $100,000 in a checking account and $300,000 in an IRA, you would not be covered for $400,000. You are eligible for a maximum of $250,000 per bank. There are strategies for increasing this maximum, although that issue is beyond the scope of this article.

Bank IRA's are typically deposited in a savings account or certificate of deposit, both of which are covered by the FDIC. Some banks offer IRA's that are money market deposit accounts. These are basically savings accounts with checking privileges. This option would be convenient for account holders who are old enough under IRS regulations to make withdrawals penalty-free.

While bank IRA's are insured by the U.S. federal government, they tend to pay fairly low rates. For example, a 3-year IRA CD at Ally Bank currently yields just 1.55%. And this rate requires a minimum deposit of at least $5,000. A 1-year IRA CD with Bank of America pays only 7 basis points per year and comes with a $2,000 opening requirement. Wells Fargo Bank requires only a $100 deposit to open an IRA savings account, but the account only earns 0.03% annually.


Brokerage Traditional and Roth IRA's Safety


A Traditional or Roth IRA opened at a brokerage firm is protected by SIPC insurance, which has a limit of $500,000. There is a $250,000 maximum on cash balances. Unlike the FDIC, SIPC is not a government agency. It was Congressionally-mandated, but it remains a private organization. It is funded by its member brokerage firms. If you open an IRA or any other account at a securities broker, you want to make sure that the firm is a member of SIPC.

Brokerage IRA's typically invest in a range of securities, such as stocks, bonds, ETF's, and mutual funds. While these assets tend to be more volatile in price, some products are available to brokerage customers that have lower risk and greater price stability. A money market mutual fund, for example, attempts and usually succeeds in keeping its price exactly at $1 per share while paying a monthly dividend. Individual short-term bonds can also be traded. They tend not to fluctuate very much in price. article.


Bank v. Broker, Roth v. Traditional


Withdrawals must begin from a Traditional IRA no later than age 70½. A Roth, on the other hand, does not require distributions to ever be taken. Deposits to a Traditional account receive a tax deduction (in some cases), but will be taxed at withdrawal (in all cases). Deposits into a Roth, on the other hand, are taxed before they go in, so they are tax free during retirement. This structure means that the Roth is better for people who will be in a higher tax bracket after work.

Brokers usually offer a greater variety of IRA's than banks. For example, Firstrade offers SEP and SIMPLE IRA's. These accounts are designed for small businesses and self-employed persons. TD Ameritrade clients can open a Rollover IRA where an old 401(k) plan can be converted to an IRA. TD Ameritrade also has an option where the account's assets can be managed by investment advisors for a fee. Fidelity has an Inherited IRA that is designed for people who have inherited an IRA or workplace savings plan. Investors who need something besides a Roth or Traditional would probably be better off choosing a brokerage firm rather than a bank.

While securities typically have much higher return potential than bank products, the prices of securities can fluctuate, sometimes second-by-second on the stock exchange. A bank deposit, on the other hand, is guaranteed by the government to remain rock solid. Obviously, retirement savers who are primarily concerned with safety and security would get better sleep at night if they choose a bank IRA.


Summary


ROTH Individual Retirement Accounts have different levels of safety, depending on where they're opened and what they're invested in. Knowing the basics of bank and brokerage accounts will help you avoid any pitfalls.


Updated on 9/19/2018.