Best Roth IRA accounts of December 2024

The Roth IRA — a popular retirement account — is similar to a traditional IRA in that you can regularly contribute to the account and watch your investments grow so you have a nest egg to tap into later on.

The key differences that make a Roth IRA stand out, however, include limits on who can contribute and the ability to withdraw your earnings in retirement tax-free (see our FAQs for more details).

To determine which Roth IRAs are best, CNBC Select compared over 20 different accounts offered by national banks, investment firms, online brokers and robo-advisors. Our top Roth IRA selections require no (or low) minimum deposits, offer commission-free trading of stocks and ETFs, provide a variety of investment options and have educational resources or tools that account holders can access. (See our methodology for more information on how we chose the best Roth IRAs.)

Who's this for? A Roth IRA at Charles Schwab is ideal for experienced investors because you can make after-tax contributions, buy and sell stocks, mutual funds, ETFs and avoid paying taxes on qualified withdrawals. There are no monthly service fees and no account minimums. To open a Roth IRA at Charles Schwab, you'll need your Social Security number, your employer's name and address, if applicable, and any date of birth for inheritance recipients.

Standout benefits: For retirees-to-be, Schwab offers all the tools and resources to ease the transition, such as planning calculators and market insights from experts.

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Who's this for? When opening a Roth IRA at Fidelity Investments, you can choose whether to have Fidelity pick and manage your investments (the Fidelity Go^® Roth IRA option) or to do it yourself. Either way, there's no minimum required to open your account.

Standout benefits: Newbie investors ready to dive in can rely on Fidelity's robust planning tools, support from Fidelity representatives, helpful explainer articles, personalized quizzes and even free educational webinars and events.

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Who's this for? The Ally Invest Roth IRA allows beginner investors to dip their toes into the market in a DIY way through its Self-Directed Trading option. There's no account minimum to get started, plus no monthly maintenance fees or commission fees on stocks, ETFs or options.

Standout benefits: Ally offers plenty of articles on investing, as well as general banking and inspirational personal finance stories from real people.

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Who's this for? Wealthfront is a popular robo-advisor that offers the option to invest for retirement in a Roth IRA through automated index investing — meaning Wealthfront will build and manage your retirement portfolio for you so you can be totally hands-off. To do so, Wealthfront will ask questions about your financial goals, your investment preferences and questions to calculate your risk level before showing you a personalized portfolio.

Standout benefits: You have the ability to make portfolio adjustments as you'd like and can choose to have exposure to new opportunities like tech and clean energy. As time goes on, Wealthfront software will automatically rebalance your investments for you.

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Who's this for? Betterment users can get guidance from Betterment's financial experts for a fee. The popular robo-advisor creates a retirement plan for you by estimating your future income needs and it has tools to help you figure out how much more money you need to save. You can set up recurring deposits into your retirement account and Betterment's technology makes sure that you don't contribute beyond the annual Roth IRA limits.

Standout benefits: Betterment will rebalance your portfolio automatically, notify you of any external accounts you may want to roll over, recommend deposit amounts to stay on track and provide automated tax-saving tools. Its Roth IRA has multiple investment options, such as "Innovative Technology" and "Climate Impact."

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Charles Schwab offers brokerage and retirement accounts, online trading, plus products outside of investing like checking and savings accounts, home loans, credit cards and more.

Minimum deposit and balance

Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One^® Brokerage Account. Automated investing through Schwab Intelligent Portfolios^® requires a $5,000 minimum deposit

Fees

Fees may vary depending on the investment vehicle selected. Schwab One^® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract

Investment options

Stocks, bonds, mutual funds, CDs and ETFs

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Fidelity Investments is best known for its retirement plans, but the brokerage also offers investing and trading, 529 accounts, life insurance, a cash management account and credit card.

Minimum deposit and balance

Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum to open a Fidelity Go® account, but minimum $10 balance for robo-advisor to start investing

Fees

Fees may vary depending on the investment vehicle selected. Zero commission fees for stock, ETF, options trades and some mutual funds; zero transaction fees for over 3,400 mutual funds; $0.65 per options contract. Fidelity Go® has no advisory fees for balances under $25,000 (0.35% per year for balances of $25,000 and over and this includes access to unlimited 1-on-1 coaching calls from a Fidelity advisor)

Investment options

Stocks, bonds, ETFs, mutual funds, CDs, options and fractional shares

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Ally Invest includes self-directed trading, robo portfolios and IRAs. Under the Ally Bank umbrella, there are also checking and savings accounts, including a high-yield savings, CDs and a money market account. Ally also offers credit cards, as well as home and auto loans.

Minimum deposit and balance

Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for Self-Directed Trading. $100 minimum for Robo Portfolios

Fees

Fees may vary depending on the investment vehicle selected. Self-Directed Trading has zero commission fees for stock, ETF, options trades; $0.50 per options contract. Robo Portfolios have zero management fees

Investment options

Stocks, bonds, ETFs, options, mutual funds, margin account and forex trading

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Wealthfront is a robo-advisor offering automated investing, individual stock investing, fractional shares, IRAs, a 529 account, plus a high-yield cash account.

Minimum deposit and balance

Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts

Fees

Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance

Investment options

Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks

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Betterment is a robo-advisor offering automated investing, IRAs, a high-yield cash account, plus a no-fee and cash-back rewards checking account.

Minimum deposit and balance

Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn’t require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Premium Investing requires a $100,000 minimum balance

Fees

Fees may vary depending on the investment vehicle selected, account balances, etc. Click here for details

Investment options

Stocks, bonds, ETFs and cash

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A Roth IRA is a retirement account invested in the market where you pay taxes upfront by contributing after-tax dollars, and later in retirement, your withdrawals are tax-free (as long as your account has been open for at least five years). Generally, Roth IRAs are best if you're in a lower tax bracket today than you think you'll be in when you retire.

Roth IRAs work by you contributing to your account consistently. Your money grows thanks to compound interest, which essentially pays interest on top of interest. Even when you aren't making contributions, the investments in your Roth IRA earn dividends or interest that get added to your balance. That interest earns more interest and so on.

To choose a Roth IRA, look for one that offers low fees and/or commissions, a variety of investment options to choose from, as well as tools to help you plan your retirement. The top picks on this list do just that. Note that not all investment options are the same everywhere you go. You can find Roth IRAs at both banks and online brokers.

There are both benefits and drawbacks to a Roth IRA:

Pros of a Roth IRA

• Your money grows tax-free since your contributions use after-tax dollars
• Though there are income limits on who's eligible, high-earners have the backdoor Roth IRA loophole
• You can withdraw your contributions at any time without paying any tax or penalty (as long as your account has been open for at least five years)
• There are ways to withdraw your earnings early with no penalty, like for first-time home purchases, college expenses and birth or adoption expenses

Cons of a Roth IRA

• There are income limits on who can contribute (though there's a workaround we mentioned above)
• There's a low annual contribution limit
• Your contributions are not tax-deductible
• It's a delayed tax break
• They're not ideal if you're in a lower tax bracket come retirement
• There's a penalty for early withdrawal of earnings unless you withdraw for one of the allowed exceptions mentioned above

With both a Roth and traditional IRA, you make consistent contributions, invest those contributions in the market and watch your money grow over time.

However, Roth IRAs have a few components that make them stand out from your traditional IRA. Here's what makes them unique:

• When you withdraw your contributions from a Roth IRA in retirement, those withdrawals are generally tax-free (as long as your account has been open for at least five years) and don't count as income. Withdrawals in retirement from a traditional IRA and 401(k) will be taxed as income.
• Contributions into a Roth IRA use after-tax dollars, unlike contributions to a traditional IRA or 401(k), which are not taxed. This may be a bigger hit to your finances in the short term, but your money will grow tax-free.
• If you withdraw earnings you've made on investments in a Roth IRA before age 59 and a half, you'll incur a 10% early withdrawal penalty and may be subject to income tax.
• There are exceptions to the early withdrawal penalty on Roth IRAs, including taking out funds for first-time home purchases, college expenses and birth or adoption expenses.
• Your tax filing status and income level determine whether or not you can contribute to a Roth IRA. Your contribution can be reduced as your modified adjusted gross income (MAGI) approaches the higher end of the phase-out ranges.

With a Roth IRA, you pay taxes on your contributions upfront so you don't have to pay them later when you withdraw money from your retirement fund (as long as your account has been open for at least five years).

This is the biggest difference from a traditional IRA, which lets you delay paying taxes until you withdraw funds later. With traditional IRAs, your contributions are also tax-deductible, up to certain limits, so your contribution reduces the amount you owe in taxes each year.

A good rule of thumb when choosing between the two types of IRA accounts is to consider your tax bracket:

• Choose a Roth IRA if you expect to make more money in your later years — and thus in a higher tax bracket. It makes more sense to pay taxes today to take advantage of your current low tax rate before it goes up. Plus, since your withdrawals from Roth IRAs don't count as income and aren't taxed after 59 and a half, you can count on every dollar in your account when making withdrawals.
• Choose a traditional IRA if you expect to make less money in your later years — and thus in a lower tax bracket. In this case, it makes more sense to reduce your taxable income in the present, so in theory, you'll pay less in taxes both now and in the future when your tax rate is lower.

Use a Roth vs. traditional IRA calculator to help you decide between the two.

Withdrawing from your traditional IRA before age 59 and a half comes at a cost. You'll be taxed, in addition to incurring a 10% early withdrawal penalty fee.

With a Roth IRA, you have much more flexibility when it comes to withdrawing money from your account before you retire. You can withdraw after-tax contributions from your Roth IRA at any age tax and penalty-free. With earnings, it's a little different. If you withdraw any earnings you've made on your investments in a Roth IRA before age 59 and a half, you will incur a 10% early withdrawal penalty (and may be subject to income taxes like a traditional IRA). There are some unique exceptions to this early withdrawal penalty on Roth IRAs that include first-time home purchases, college expenses and birth or adoption expenses.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every Roth IRA review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of retirement and investment accounts. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best Roth IRAs.

To determine which Roth IRAs are the best for those looking to save for retirement, CNBC Select analyzed and compared Roth IRAs offered by national banks, investment firms, online brokers and robo-advisors. We narrowed down our ranking by only considering those that offer commission-free trading of stocks and ETFs, as well as a variety of investment options so you can best maximize your retirement savings.

We also compared each Roth IRA on the following features:

• $0 minimum deposit: Most of the Roth IRAs on our ranking don't have minimum deposit requirements.
• Low fees: We considered each Roth IRA's fees, commission trading fees and transaction fees.
• Bonus offered: Some Roth IRAs offer promotions for new account users.
• Variety of investment options: The more diversified your portfolio, the better. We made sure our top picks offer investments in stocks, bonds, mutual finds, CDs and ETFs. Most also offer options trading.
• A hub of educational resources: We opted for Roth IRAs with an online resource hub or advice center to help you educate yourself about retirement accounts and investing.
• Ease-of-use: Whether accessing your Roth IRA via your laptop at home or on your smartphone while on the go, it's important to have an easy user experience. We noted when an investment platform excelled in usability.
• Customer support: Every Roth IRA on our list provides customer service available via telephone, email or secure online messaging.

After reviewing the above features, we focused our recommendations mostly on their appeal to beginner investors who are likely just starting out in their careers since Roth IRAs are the most effective retirement savings vehicles if you're in a lower tax bracket today than you'll be in retirement. For the purposes of this ranking, we focused only on Roth IRAs, though the best providers often overlap with those that offer the top traditional IRAs — read our list of the best traditional IRAs here.

Your earnings on contributions to a Roth IRA depend on any associated fees, the contributions you make to your account and the fluctuations of the market.

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