The Best Roth IRAs of 2020

Point of Interest

Many of the best Roth IRA options available at well-known banks offer lucrative promotions, low or no fees, and no account minimums to get started saving for retirement in 2020.  

Created in the 1990s, Roth IRAs are a tax-advantaged investment medium that individuals can use to save for retirement. While similar to a traditional IRA in composition and the intended purpose, Roth IRAs differ significantly in how contributed funds are taxed. Those looking for the best Roth IRA on the market will be pleased with the available options. Some of the top account options include promotional offers, low or no fees, and low or no minimum balances to get started.

The 8 best Roth IRAs of 2020

TIAA – Best for options

Merrill Edge – Best for guided investing

Charles Schwab – Best for new investors

Ally – Best for Roth IRA products

Vanguard – Best for mutual funds

Fidelity – Best for research

TD Ameritrade – Best for ETFs

Betterment – Best for account tools

ProviderFeesMinimumsKey Benefit
TIAA$0$0Fully customizable investment options
Merrill Edge0% – 0.85%$0 – $20,000$600 new account bonus
Charles Schwab$0$0Access to expert market insights
Ally Bank$0Not listedHigh-yield IRA CDs available
Vanguard$0$0Industry-leading mutual fund options
Fidelity$0$0Extensive research and investment tools
TD Ameritrade$0$02,300 ETFs available commission-free
Betterment0.25% – 0.40%$0 – $100,000Unique tax-savings tools

What is a Roth IRA?

A Roth IRA is a retirement savings account that offers tax benefits to the invested party. Typically, Roth IRAs are made up of stocks, bonds, certificates of deposit (CDs), and exchange-traded funds (ETFs). Investors are able to take advantage of certain tax benefits for annual contributions to their Roth IRA account. While many investment mediums offer tax benefits right away, Roth IRAs defer those benefits until the money is withdrawn.

Roth IRA vs. traditional IRA

The two main types of IRAs available are traditional and Roth. Traditional IRAs have been around for decades, while the Roth IRA was created in the 1990s. Both accounts are comprised of the same types of investments. The major difference, though, has to do with when the invested funds are taxed. Traditional IRAs offer an immediate tax benefit, but taxes are paid on the principal when withdrawn. Roth IRAs, though, pay taxes on the invested money immediately but owe no taxes on the principal when withdrawn.

Roth IRA vs. 401(k)

401(k) accounts are also retirement savings accounts like Roth IRAs. The major difference, though, is that a 401(k) is sponsored by an employer. Often, 401(k) accounts come with a percentage match on contributed funds from the employer. This is done as an incentive to attract new hires and retain existing talent. 401(k)s come in Roth and traditional formats as well.

Roth IRA vs. pension plan

Pension plans are work-sponsored retirement plans that do not require a financial investment from the employee. Instead, they are given to employees as an incentive for their time spent with a particular company. Often, those saving for retirement will have both IRA accounts and a pension plan if it is offered by their employer.

The 8 best Roth IRAs of 2020

TIAA – Best for options

TIAA offers Roth IRAs with no account fees, no required account minimums, and a team of experienced consultants to walk you through the process. While the company does not have any current promotions on new IRA accounts, it does stand out with quite a few options. Roth IRA accounts are fully customizable with mutual funds, annuities, and full-service brokerage products available.

Merrill Edge – Best for guided investing

The Roth IRA options at Merrill Edge are great for people that want to manage the account themselves or those who are looking for some guided help from experts. The self-directed account option is available with no transaction fees and a $0 account minimum to get started. Additionally, it comes with up to a $600 bonus for new accounts. Those looking for some professional assistance can upgrade to the Merrill Guided Investing or the Merrill Guided Investing with an advisor for a small percentage fee and a required account minimum.

Charles Schwab – Best for new investors

Roth IRAs are available through Charles Schwab with no account minimum and no fees on transactions. What stands out about the option the most, though, are the resources available to help newer and seasoned investors make better decisions. The company provides users market insight, commentary and investment ideas direct from the company experts.

Ally – Best for Roth IRA products

While you can put whatever you’d like in your Roth IRA account at Ally, there are some unique products with great returns you can include. For example, the company has IRA high-yield CDs available from 3 months up to 60 months. Current rates on a one-year IRA CD are 2.00% and go up to 2.15% at five years.

Vanguard – Best for mutual funds

When you open a Roth IRA through Vanguard, you get access to their impressive family of mutual funds. 88% of the no-load funds through Vanguard outperformed their peer group average over the last decade. Additionally, you’ll have access to the company’s target-date funds that have grown in popularity over the past years.

Fidelity – Best for research

Opening a Roth IRA with Fidelity grants you access to the company’s research and investment tools. These products give you the necessary information to make the best decisions about the future of your retirement savings. Accounts are available with no minimum opening deposit and $0 commissions on U.S. stock, ETF, and options transactions.

TD Ameritrade – Best for ETFs

If you’re looking for options when it comes to investing, the Roth IRA from TD Ameritrade would be a good fit. The company boasts an impressive 2,300 exchange-traded funds available with no commission charge. On top of that, you’ll have access to a long list of other products, including mutual funds, fixed income products, and more.

Betterment – Best for account tools

Those looking for unique research and account will like what Betterment has put together for their Roth IRA account holders. One of the neatest is the Tax-Coordination tool that uses artificial intelligence to allocate your assets for boosting after-tax returns. The system claims it can save upwards of 15% over the course of 30 years.

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Jason Lee

Personal Finance Contributor

Jason Lee is a seasoned copywriter with a passion for writing about banking, tech, personal growth, and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill set with the rest of the world.