Investing Simple Logo
Menu
Get Started on Robinhood With 1 Free Stock!
Robinhood is offering new users 1 free stock worth between $3 and $225 when you open an account and fund it with any amount of money.
Written by Kevin Mercadante on March 17, 2021
Category: 
FTC Disclosure

Best Brokerages For Roth IRA Accounts In 2021

A Roth IRA has increasingly become a must-have account in recent years. But who are the best brokerages for Roth IRA accounts? In this guide, we’re going to summarize the best features of eight popular investment brokerages, and why we think each is one of the best choices for your Roth IRA account.

The Best Brokerages for Roth IRA Accounts

Below is our list of what we believe to be the best brokerages for Roth IRA accounts:

Betterment

Why Betterment is a good option for a Roth IRA: Betterment is a very popular robo-advisor, and an excellent choice if you prefer to have your account professionally managed for a very low fee. Betterment will handle all the details, including portfolio selection, periodic rebalancing, and dividend reinvesting. Your only responsibility will be to fund your account.

Your Roth IRA will be invested in a fully diversified portfolio that will include US and international stocks and bonds. And you can open an account even if you have no money. If you qualify for the Premium plan, you’ll also have unlimited access to financial advisors.

Betterment Features:

  • Minimum Initial Investment: $0 on the Digital Plan, and $100,000 for the Premium plan.
  • Available accounts: Individual and joint taxable brokerage accounts, and traditional, Roth, rollover and SEP IRAs.
  • Investments offered: Investments in US and foreign stocks and bonds through exchange traded funds (ETFs).
  • Fees: 0.25% per year for the Digital Plan, and 0.40% for the Premium plan.
  • Customer support: Phone support, Monday through Friday, from 9:00 AM to 6:00 PM.

Betterment Pros:

  • Perfect choice for investors looking for someone else to handle investment management for them.
  • Low cost – you can have a $20,000 portfolio managed for just $50 per year.
  • No minimum account balance required on the Digital plan.
  • Unlimited access to financial advisors on larger accounts.
  • Offers a high-interest cash option for uninvested capital in your taxable investment accounts.

Betterment Cons:

  • No capability to choose specific investments.

M1 Finance

Why M1 Finance is a good option for a Roth IRA: M1 Finance is a robo-advisor, much like Betterment. But it takes a completely different approach by allowing you to choose your own investments. This is done through a system they refer to as “pies”. Each pie is a portfolio that can be filled with “slices” of up to 100 individual stocks or ETFs. They also offer prebuilt pies if you don’t want to select your own investments.

You can build as many pies as you want, and once you do, M1 Finance will provide robo-advisor management, free of charge.

M1 Finance Basic Features:

  • Minimum Initial Investment: None, but you do need a minimum of $100 to invest.
  • Available accounts: Individual and joint taxable investment accounts, and traditional, Roth, rollover and SEP IRAs.
  • Investments offered: Choose from thousands of individual stocks and ETFs.
    Fees: None – there are no trading fees and no account management fees.
  • Customer support: Phone support , Monday through Friday, 9:00 AM to 5:00 PM, Central time.

M1 Finance Pros:

  • No minimum balance requirement to open an account.
  • No management or trading fees.
  • Choose your own investments or use one of 80 prebuilt templates.
  • Combines choosing your own investments with robo-advisor management.

M1 Finance Cons:

  • Not a trading account, so while you can invest in individual stocks, you can’t trade them on a regular basis.
  • No mutual funds or bonds available.

Personal Capital

Why Personal Capital is a good option for a Roth IRA: Personal Capital is designed for investors with larger account balances. You’ll need a minimum investment of $100,000, but that comes complete with access to a team of financial advisors. And with an account balance of at least $200,000, you’ll have access to two dedicated financial advisors.

Personal Capital isn’t a robo-advisor, but more of a comprehensive investment management service. They can handle multiple accounts, including both taxable and retirement accounts, with the combination of both counting toward the minimum investment requirements.

Personal Capital

Personal Capital Basic Features:

  • Minimum Initial Investment: $100,000.
  • Available accounts: Individual and joint taxable investment accounts, and traditional, Roth, rollover and SEP IRAs.
  • Investments offered: ETFs invested in US and international stocks and bonds, real estate investment trusts, energy and gold.
  • Fees: Investment advisory fee starting at 0.89% per year, but stair-stepping down to 0.49% on account balances over $10 million.
  • Customer support: Phone support, Monday through Friday, 8:00 AM to 6:00 PM, Pacific time.

Personal Capital Pros:

  • Offers free financial tools for budgeting and personal investment management.
  • Unlimited access to financial advisors.
  • Advisory fee is well below that charged by traditional, human guided investment advisors.
  • Takes investments not held with Personal Capital into account in building your portfolio.
  • Offers a high-interest cash option for uninvested capital in your taxable investment accounts.

Personal Capital Cons:

  • No self-directed investing capability.
  • Fee structure is much higher than that of robo-advisors, though Personal Capital comes with access to financial advisors.
  • The $100,000 minimum investment requirement will exclude many investors.

SoFi Invest

Why SoFi Invest is a good option for a Roth IRA: SoFi is perhaps best known for student loans. In recent years they’ve expanded their product menu to include investments. They offer both SoFi Active Investing for self-directed investors, and SoFi Automated Investing for those who prefer to have their accounts professionally managed. You’ll have access to SoFi financial advisors with either plan.

SoFi Active Investing offers commission-free trading of stocks and ETFs, as well as investing in cryptocurrency. SoFi Automated Investing provides full portfolio management, including rebalancing and dividend reinvesting. With either, you can also take advantage of a high-interest cash account.

SoFi Robo Advisor

SoFi Invest Basic Features:

  • Minimum Initial Investment: $0 with both SoFi Active Investing and Sofi Automated Investing.
  • Available accounts: Individual and joint taxable brokerage accounts, and traditional, Roth and SEP IRAs.
  • Investments offered: SoFi Active Investing: stocks, ETFs and cryptocurrencies; Sofi Automated Investing: ETFs invested in US and international stocks and bonds.
  • Fees: SoFi Active Investing: commission-free trades; SoFi Automated Investing: no management fee.
  • Customer support: Phone support, Monday through Thursday, 8:00 AM to 8:00 PM, and Fridays, 8:00 AM to 7:00 PM, all times Eastern.

SoFi Invest Pros:

  • Commission-free trades of stocks and ETFs with SoFi Active Investing, and no management fee for SoFi Automated Investing.
  • One of the few brokerage platforms that offers trading in cryptocurrencies.
  • No minimum investment with SoFi Active or Automated Investing.
  • SoFi Active Investing offers investing in cryptocurrencies.
  • Offers a high-interest cash option for uninvested capital in your taxable investment accounts.

SoFi Invest Cons:

  • SoFi Active Investing doesn’t offer mutual funds, bonds, or options.
  • Active Investing tools and research are limited.

Webull

Why Webull is a good option for a Roth IRA: Webull may be the top choice broker for active traders. That’s because it’s set up specifically as a trading app for active traders. But you’ll need to be a knowledgeable, self-directed investor to get the best benefit from Webull. Both customer support and investor resources and tools are limited.

Webull now offers NASDAQ TotalView, providing Level II Advanced quotes and trading, which can be particularly beneficial for active traders. It gives you access to the bid and ask prices for stocks you’re tracking, as well as the number of shares investors are looking to trade.

Webull Basic Features:

  • Minimum Initial Investment: None.
  • Available accounts: Individual taxable brokerage accounts, and traditional, Roth and rollover IRAs.
  • Investments offered: Stocks, ETFs, options, ADRs and cryptocurrencies.
  • Fees: None.
  • Customer support: Live chat through the app, email, and limited phone support.

Webull Pros:

  • Fast, commission-free trades of stocks, ETFs and options.
  • One of the few brokerage platforms that offers trading in cryptocurrencies.
  • Designed for active traders.
  • Easy to use investment app.

Webull Cons:

  • Limited investment selection – does not offer bonds or mutual funds.
  • Individual accounts only, joint accounts are not permitted.
  • No managed portfolio option is offered, which can be a limitation for retirement investors.
  • Education and investor tools are limited.

Firstrade

Why Firstrade is a good option for a Roth IRA: Firstrade is another investment service designed for self-directed and active investors. But it offers more trading tools and investment research than Webull. For example, they provide comprehensive research from respected investments, authorities, like Morningstar, Zacks and Benzinga. And if you like to invest in mutual funds – as many do in their retirement accounts –Firstrade offers more than 11,000 commission-free mutual funds.

The main downside for retirement investors with Firstrade is that it doesn’t offer a managed portfolio option.

Firstrade Basic Features:

  • Minimum Initial Investment: None.
  • Available accounts: Individual and joint taxable brokerage accounts; traditional, Roth, rollover, SIMPLE and SEP IRAs; trust, custodial and business accounts.
  • Investments offered: Stocks, bonds, ETFs, mutual funds, OTC penny stocks and options.
  • Fees: Commission-free trades on stocks, ETFs and options and mutual funds.
  • Customer support: By phone, email and live chat, Monday through Friday, 8:00 AM to 6:00 PM, Eastern time.

Firstrade Pros:

  • Commission-free mutual funds, in addition to stocks, ETFs and options.
  • No contract fee on options trades.

Firstrade Cons:

  • Cannot trade foreign stocks.
  • No managed portfolio option, which retirement investors often look for.
  • Lacks 24/7 customer service capability.

Charles Schwab

Why Charles Schwab is a good option for a Roth IRA: Schwab is the largest investment brokerage firm, which tells you something about the service they offer. It may best be described as a full-service broker with commission-free trading. They also offer 24/7 customer service, and a wealth of investing tools and research, as well as no fewer than three free trading platforms.

And while Schwab is best known for self-directed investing, they also provide a managed portfolio option. Schwab Intelligent Portfolios provides complete investment management with no management fee. That will give you the option to have at least some of your Roth IRA portfolio professionally managed while also maintaining self-directed investing.

Charles Schwab Basic Features:

  • Minimum Initial Investment: None, but $5,000 for Schwab Intelligent Portfolios.
  • Available accounts: Joint and individual taxable investment accounts; traditional, Roth, rollover, SEP and SIMPLE IRAs; Solo 401(k)’s, trusts and custodial accounts.
  • Investments offered: Stocks, bonds, ETFs, mutual funds, options, futures and CDs. ETFs investing in US and international stocks and bonds for Schwab Intelligent Portfolios.
  • Fees: Commission-free trades of stocks, options, and ETFs; more than 4,000 commission-free mutual funds. No management fee on Schwab Intelligent Portfolios.
  • Customer support: 24/7 by phone, email and live chat.

Charles Schwab logo

Charles Schwab Pros:

  • Schwab offers both self-directed investing in a managed portfolio option.
  • No minimum initial investment required for a regular brokerage account.
  • Trade among more than 4,000 commission-free mutual funds.
  • 24-hour customer service as well as branches located throughout the country.

Charles Schwab Cons:

  • High fees for broker-assisted trades, at $25.
  • Schwab Intelligent Portfolios requires a minimum initial investment of $5,000.

Fidelity

Why Fidelity is a good option for a Roth IRA: Much like Schwab, Fidelity is a full-service investment platform offering commission free trades of stocks, options, and ETFs. They also provide an incredible amount of investor research and investor tools to help you maximize your investment performance. But they also offer a managed portfolio option, Fidelity Go. Unlike Schwab Intelligent Portfolios, Fidelity Go requires no minimum account balance. However, they do charge a management fee, though the first $10,000 is managed free.

Fidelity offers 24/7 customer service, as well as more than 300 branch offices throughout the country.

Fidelity

Fidelity Basic Features:

  • Minimum Initial Investment: None on either a brokerage account, or on Fidelity Go.
  • Available accounts: Joint and individual taxable investment accounts; traditional, Roth, rollover, SEP and SIMPLE IRAs; Solo 401(k)’s,
  • Investments offered: Stocks, bonds, mutual funds, ETFs, options, and other securities. Fidelity Go invests your account in ETFs centered on US and international stocks and bonds, as well as short-term investments.
  • Fees: Commission-free trades of stocks, options, and ETFs; more than 3,000 commission-free mutual funds. Fidelity Go: No fee on the first $10,000; $3 per month on balances between $10,000 and $49,999, and 0.35% on account balances $50,000 or higher.
  • Customer support: 24/7 by phone, email and live chat.

Fidelity Pros:

  • No minimum initial investment required for either a brokerage account or Fidelity Go.
  • Highly diversified brokerage firm that can easily accommodate everyone from new investors to the most advanced.
  • Commission-free trades on most investments.
  • 24-hour customer service with branches across the country.
  • Top notch research and investment tools.

Fidelity Cons:

  • High commission on non-Fidelity funds, at $49.95 on purchases.

What is a Roth IRA and How Does it Work?

If you’re reading this article, you probably already have a good idea what a Roth IRA is and why it’s well worth having. But let’s do a quick summary anyway.

A Roth IRA works very similar to a traditional IRA. You can contribute up to $6,000 per year – $7,000 if you’re 50 or older – and the funds in the account accumulated investment income on a tax-deferred basis.

But unlike a traditional IRA, Roth IRA contributions are not tax-deductible. However, any withdrawals taken from the account are completely tax-free – both contributions and investment earnings – once you reach at least 59 ½ years old and have participated in a Roth plan for at least five years.

Because Roth IRA contributions are not tax-deductible, they can be withdrawn at any time, free from income tax or the 10% early withdrawal penalty. (However, both tax and penalty will apply to any early withdrawals of accumulated investment income.)

You should also be aware that there are income limits beyond which you cannot make a Roth IRA contribution. For 2021 single taxpayers, a Roth IRA contribution is fully permitted up to an income of $125,000. It phases out between $125,000 and $140,000, after which no contribution is permitted.

For married taxpayers filing jointly, the contribution for 2021 is fully permitted up to a combined income of $198,000. It phases out between $198,000 and $208,000, after which no contribution is permitted.

Just as is the case with a traditional IRA, you can invest a Roth IRA just about anywhere you want. That’s why the choice of the brokerage account to hold your Roth IRA is so important.

Bottom Line: Best Roth IRA Brokerage Accounts

As you can see, different investment brokers can accommodate different investor preferences. If you prefer self-directed trading, you may want to consider Webull or Firstrade. If you prefer a managed option, Betterment or Personal Capital offer a better option. But if you want to combine both self-directed investing and a managed option, M1 Finance, SoFi, Charles Schwab or Fidelity will get the job done for you.

Best Roth IRA Accounts

Robo-AdvisorFeesLink
Betterment Robo Advisor0.25% To 0.40%Download
M1 Finance Robo AdvisorNo Management FeesDownload
Charles Schwab Robo AdvisorNo Management FeesDownload

roth ira complete guide
Article written by Kevin Mercadante
Kevin Mercadante is a freelance professional web content writer for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has extensive backgrounds in both accounting and the mortgage industry. In fact, it was his career crash-and-burn from the mortgage business in 2008 that led him into blogging and freelance professional web content writing. Kevin and his family live in New Hampshire, after long stints in New Jersey and Georgia.

Latest Posts

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Fundrise
Passively invest in private real estate deals with as little as $500. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
© Copyright 2018 - 2020 Investing Simple LLC. All Rights Reserved. Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Developed by Stallion Cognitive
magnifiermenucross-circlechevron-down-circle
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram
Copy link
Powered by Social Snap