Roth IRA accounts are wealth building tools that grow your earnings tax-free. Many financial institutions offer Roth IRA accounts to their customers. After searching Google for Roth IRA, I came across tons of banks/credit unions that offer Roth IRAs. Haven’t opened yours yet? Well, you no longer have an excuse. Everything you need is right here.
Roth IRA Rules & Benefits
- Contributions can be withdrawn anytime without taxes or penalties.
- Distributions, interest, and dividends are tax-free if you are at least 59 ½ and the account has been established for longer than five years.
- You can contribute after age 70 ½ as long as you have earned income.
- No required minimum distribution (RMD) during your lifetime.
- Tax-free distributions can be passed to your beneficiaries.
You should consider a Roth IRA if:
- You want tax-free earnings.
- You are already saving for retirement with an employer-sponsored plan.
- Your income does not exceed $169,000 for married taxpayers or $116,000 for single taxpayers
- You want to invest for retirement but may need to access your savings.
Best Roth IRA Accounts
Opening your Roth should be convenient, not an arduous task. Just make sure you open one somewhere, although maintenance fees and account minimums are factors to consider. Each bank/broker provides different benefits that include price, ease of use, accessibility, customer service, etc. Compare the best no fee IRAs and fee requirement IRAs in the business. Our personal favorite is TradeKing
| Bank Name | Annual Fees | Commissions | Minimum Balance | Overall Rating (1-5 Stars) | Comments |
| TradeKing Roth IRA | $0 | $4.95 | $0 |  |
Pros: Great Customer Service, Fast Trade Execution, Retirement Education, Active investing community and Top level security.
Cons: Slow site speed, Difficult to Transfer Moeny |
| Etrade Roth IRA | $0 | $12.99 | $0 | |
Pros: Fast trade execution, Fast website, Decent customer service, Great tools, Great Reputation
Cons: Higher Commissions |
| OptionsXpress Roth IRA | $0 fees | $14.95 | $0 | |
Pros: Fast website, Good Customer Service, Easy to Use Tools, Educational Tools
Cons: Expensive Commissions |
| Fidelity Roth IRA | $0 | $19.95 | $1,000 | |
Pros: Fast website, Excellent Customer Service, Great Reputation, Average Security, Largest Retirement Fund Broker
Cons: Expensive Commissions, Expensive Transfer out fees |
| T.Rowe Price Roth IRA | $10 fee/year for accounts < $5,000 | $0 for No Load Funds | $1,000 | |
Pros: No Load Funds, Fast Website, Good Security, Good Education
Cons: Not for Traders, $1k Minimum to Open Account |
| Bank of America Roth IRA | $30 fee for balances < $10000 | $0 | $0 | |
Pros: $0 Trades with $25k+ Account, Good Security, Fast Website, Good Execution
Cons: Lack of Tools, Lack of Education |
| Zecco Roth IRA | $0 fees if over $2.5k balance | $4.50 | $0 | |
Pros: 10 Free trades per month if you qualify, Easy to Use website, Easy to Transfer Funds, Helpful Investment Community
Cons: Need $25k+ to Qualify for Free Trades, Slow Site Speed, Lack of Customer Service |
Delaying Your Roth IRA 1 Year Can Cost You Thousands of Dollars
Putting off your retirement savings for even just 1 year can costs you thousands of dollars in the future. An extra year of compound interest could boost your IRA balance at retirement by thousands because the money had 365 more days to earn interest. Not to mention any total gains you will earn on stocks, mutual funds, bonds, or annuities.Once you open your Roth Retirement account, you can choose the best Roth IRA funds based on your risk aversion and time horizon.
My Favorite Roth IRA Broker: TradeKing
I’ve had a TradeKing account for over 4 years (even before I launched InvestorTrip.com) and they are extremely consistent with their product offering, customer service, and overall business practices. While other brokers have fine print requirements (like Etrade and Zecco), Tradeking is straight forward with their $4.95 stock trades and this fee has never changed since I joined years ago.
Still Need Answers? Read our 2009 Roth IRA Retirement Guide
If you are looking for more comprehensive information on roth ira accounts, please read our online Roth IRA guide now.
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TJP,
Thankyou for your advice.
I am looking into both - Vanguard and Fidelity . Both look attractive. I was wondering…. does it make sense to open 2 Roth IRAs, one with each of the above? Like 2k each for 2007 and in the following years go half an half.
In addition … is it advisable to invest in brokerage accounts? Any good companies giving good returns?
Thankyou for your time and help.
Happy Thanksgiving to all ,
Sid.
What is your opinion on Janus, I don’t see it in your list?
There is a great book on this topic, called “It’s Your IRA”. It is an excellent resource for those wanting to learn more about investing in Roth and Traditional IRAs. It is definitely worth a look.
WOW….all I can say is thank you. Just running across the site has cleared up a few years, several books and numerous articles of confusion for me. I now have direction and don’t feel like subject matter for a “Dummies” book. (Though I may still qualify).
Haha. Glad I could sort things out for you.
If you have any more questions, please let me know.
@TJP:
Great site! Do you still recommend Fidelity for Roths and are there any particular funds that look good for a potentially rough 2008 market?
Thanks!
TJP,
This forum has been a real big help. I am 17 and have a traditional 401k plan started through my employer. I am investing 3% into this each paycheck, and have matching contributions up to 5% from my employer. As soon as i can figure out how, i am going to change my automatic contributions to 5%. I am looking at investing in a Roth IRA. I have no idea where or what to invest in, or with what company to do my investing. I see you like Vangaurd and Fidelity. I want an account that has compounded interest at the greatest rate with the least fees over the long run. I want to just invest my money and watch it grow over time. Should i invest in mutual or index? I want to start this up relatively soon, to give it the greatest amount of time to grow. I am a highschool senior working part time, which end up being a $250 bi-weekly paycheck. I plan on attending college full time to get a bachelor’s degree in mechanical engineering. My income will not be much, so to say. I have been told and read myself that a Roth IRA would be a good option for me. Any help you can provide would be a great help.
I only can start with $1,000. Is it ok to do Vanguard’s Star Fund for Roth 401k?
@ Bob
For amounts less than $2k, I recommend the target date funds, which automatically adjust as you reach closer to retirement.
Depending on your age, you may try the Vanguard 2040 or Vanguard 2045.
However, it’s always smart to read up on any fund prospectus before making a final decision.
Good Luck!
I am in the process of starting a roth IRA as well. Has anyone heard anything about H&R Block? would that be a good place to open one? I was also thinking state farm, but changing my mind after seeing this site. Thanks for the advice
How can Bob inest in Vanguard’s Target Retirement funds? The minimum investment is $3,000. Bob has only $1,000. Bob go with the Star Fund for your Roth.
Thank you so much for posting this! It was very helpful for me to decide that Vangaurd is the best place to open a Roth IRA account.
I’m nearing 22 and I’m wondering what type of IRA I should get into. I have a grand saved up, but I make around $1.5k a month. Anyone have any ideas of what I should do to prepare myself for retirement? What kind of IRA should I get?
I’m wanting to start some type of retirement savings plan, but I’m not sure which type or IRA to go with. I’m nearing twenty-two and I have about $340-400 worth of bills a month and I average about $1,500 monthly. I only have a little over a grand in savings but could easily add to it. Could anyone help me out as to what I should invest in?
Thanks, guys
Oops. Double post, sorry guys. I wasn’t able to see the first post there.
I started investing last year in Roth IRA.My advisor recommended American Funds and I contribute about $200 every month.I don’t know much about investment and would like some advice whether this is the right fund.I hear a lot about Vanguard and am debating whether to move my money to them.HELP before i make a wrong decision.
@ Tinashe
Vanguard is very good for indexing, owning a share of the indices that represent the Dow, Nasdaq, etc.
If you don’t have time to research investment, index funds are the best way to do. I’m not familiar with American Funds, but I know personally that Vanguard is excellent.
Hope this helps!
Anyone got any helpful info for me?
Hi Gunnar,
You probably want a nice mix of stocks, bonds, and short term certificates like money market and CDs.
I’m only 21 myself, and I buy mostly stocks and short term money market funds in my IRA.
Since your time horizon is 40+ years, think agressively.
However, if you rather just park your money and forget it, go with Index Funds.
There are no right or wrong way to invest. It depends on your personal knowledge, tolerance, and risk averison.
Try buying some stocks in a sector you are familiar with. Maybe Tech or Retail, or whatever.
Thanks for all the great info on this site.
I am now debating between the Vanguard 2045 and the Vanguard Total Int’l Stock Index after reading Tarik’s link. The long term return is 8% higher on the international fund - but is it too risky to choose just this? I am 30 years old. I also have a 401K w/ my company that I have had for 10 years so the Roth IRA won’t be my only investment. What do you guys think? Thanks! Laura
I think this website is great and many of you have great ideas. But I see a consistent issue of young people being confused about financial issues. I was in the same boat myself. I am in the military serving my country in Iraq and have never done any quality investing in my life because i was always too confused by the options and b.s. legal jargon. then I saw the videos from Dave Ramsey’s “Financial Peace University”. I’m not kidding, it has changed my life and gotten me out of a lifelong problem of debt and never investing. It covers EVERYTHING you ever need to know about finances and getting ahead financially in life. It is not a get-rich-quick scheme in any way. I wish I had gone to Financial Peace University 20 years ago! I am recommending it to family and anyone else I care about! Seriously, i do not work for the company in any way, but for any caring parent out there, young person or even middle-aged person who cares about their future and the future of their loved ones, it is an absolute MUST to go to Financial Peace University, if you care about your future and finances, no matter who you are or what you do for a living. It is by far the best thing I have ever done for my financial future. It’s a confusing world, especially when it comes to finances, and there are no more guarantees for big pension retirements like there used to be. Just go to http://www.daveramsey.com and check out Financial Peace University. You will never regret it. I don’t. Check out the 149.00 membership package! Tom
i have been putting off opening a rothIRA and finally decided upon opening with vanguard. here is what i have:
1. i can contribute the max ($5K) up front - i’m assuming it’s better to do this than contributing monthly.
2. i don’t know a lot about what to invest in (would prefer info or a plan that is low-maintenance).
3. i have a 401K plan with my job that i’m contributing already.
4. i’m 28.
thanks in advance and for all the info you’ve provided on this site!
I have a Roth IRA with ING Direct, but I was thinking of changing banks. Whould I go with Vanguard (seems like the most popular) or USAA (I’m a veteran)? I’m 30, but not making much money yet. Any help would be greatly appreciated. Thank you.
@ Laura
Why not invest in both? Use Morning Star’s X Ray Tool to figure out how much you want to put in each index fund. That way, if one underperforms or you rather sell it, you can sell 1 index fund and buy more of the 2nd.
Thanks for the question, and please consider our Roth IRA Forums to get insight from other Investor Trip Community Members.
@ Tom
Awesome link, Tom. Thanks for the inspirational story and link resource.
@ Shelia
Hi Shelia, I can quickly make some suggestions:
1. Max it out. You’re already ahead of the ballgame there.
2. If you’re a beginner, then invest in index funds that track the market. You can create a diversified portfolio just by indexing.
3. 401(k)’s are great. Keep doing what you are doing.
4. You’re still young. Any age under 30 makes you a VERY YOUNG investor.
Shelia,
You’re better off than most people already. Just keep learning about investing, and funding those accounts. You will be successful.
I can feel it
Thanks for the awesome questions!
@ David
Hi David. I’m an advocate for Vanguard because I am familiar with their offerings and services.
USAA is a bit foreign to me, so I cannot properly give my recommendations.
Try calling up both Vanguard and USAA to see who competes more for your business. You should receive some additional perks since you served your country.
Good Luck to you, and thanks for the question.
I’m not an expert yet on USAA’s Roth IRA, but I do have everything else dealing with finances under USAA. I have used many financial institutions over the years, and none of them have come even close to the customer care and benefits I have received from USAA. I am constantly amazed by their benefits and helpfulness to military members and vetarans. My two uncles, who are the only millionaires in my family, also choose USAA over any other financial institution, for everything. After the hurricanes that destroyed a lot in the South of our country, while other insurance companies were doing everything they could to screw their customers who just lost everything, USAA was taking care of all their customers who were victims, with no hassle, including writing a large check to my uncle to fix two of his homes and a buy a new car for the one that was destroyed, with no hassle. Like I said, I am not an expert yet on their Roth IRA, but based on their performance of taking care of their customers and being voted #1 in customer service for the second year in a row by BusinessWeek (I can see why, every time I deal with them, with their great care for me despite how poor I am), I just cannot see any investment with USAA as being a bad thing. I am going to look in to starting a Roth IRA with them myself, as soon as I have the time to look into it.
Just wanted to mention a few corrections/updates to the chart at the top of the page, as I am looking into starting my first Roth IRA:
1. TD Ameritrade requires a starting minimum balance of 2,000.00, not 500.00.
2. The 2,500.00 minimum balance listed for Fidelity can be waived for anyone who wants to do their program of 200.00 automatic payments every month.
3. T. Rowe Price has a great deal/program where those of us who are poor can waive the minimum balance by paying only 50.00 a month automatic payments.
4. I have always paid my bills, but for some reason Scottrade is a real hassle and wants me to bring in all kinds of documents to one of their branches in order to open an account, which is impossible since I am stationed in Iraq.
5. TradeKing’s website is so slow that I have tried to open an account 3 times on different days and it will only go so far before the pages stop loading (I know I have a slow connection, but this is still pretty sad, and I have no problem with any other site loading).
6. Vanguard also has a great deal where the minimum is waived if you do a guaranteed monthly payment of 200.00.
7. I have not yet looked into USAA, but based on the outstanding performance of their company in every corner of personal finance, I am sure I will not be disappointed.
I am in the military as well. I have gone with Vanguard with my investing needs. They are way better than USAA with the investments. However, I use USAA for car insurance etc.
Just in case anyone has not already gone to this site, I have been heavily researching IRAs/Roth IRAs for the past couple weeks, and it looks to me like this is the best all-around site for anyone just starting to invest in a Roth IRA:
http://www.getrichslowly.org/blog/2007/06/07/how-to-start-a-roth-ira-and-where-to-do-it/
Can you please add Navy Federal Credit Union?
I have a 401(k) with a former employer. I would like to get it out of there, as I am not sure of the company’s long-term stability, and roll it into a Roth IRA. If I go with Fidelity, or another similar company, will I have to pay fees to them for managing it? I am clueless about how to do all of this. Any advice for a novice is greatly appreciated.
Does anyone know what instuition has the top performing Roth IRA option. I’m looking to open one for the first time and am looking for maybe the top three historical peformers. I am 26, in it for the long haul and plan to make the maximum contribution every year.
Also, does anyone know about Wells Fargo’s performance? I do my banking through them and like the idea of keeping everything in one house but not at the expence of historical performance?
Any insight would be greatly appreciated.
Thanks,
Trey
For a long-term investment like an IRA, the best approach is to stick with a low cost mutual fund company such as Vanguard.
Doesn’t Fidelity have a $2500 minimum for Roth IRA?
Never mind, i was looking at the wrong company
Hey sib,
No problem. I started my IRA with only $100, but that’s because I opened the account at Fidelity’s district office.
Can you add Edward Jones?
Doesn’t Vanguard have no-fee Roth IRAs?
Edward Jones will be added to Award Winning Brokers. And yes, Vanguard is no fee.
Thanks for the info on this site. I am 33 year old and planing to open my roth IRA with Vanguard star fund. Please do let me know if you have any comments on this. Thanks in advance.
Thanks for the info on this site. I am 33 yr old and planing to open my roth ira now. I am planing to go with Vanguard STAR fund. Please let em know your comments. Thanks in advance.
This article is a good introduction to Roth IRA, but if you want more in depth info, I suggest you visit Roth IRA Rules. they have some really good insights
Cheers
That was an interesting article. It’s hard to read, but nonetheless informative.
I am using ING Direct for my roth IRA. How do they compare to others?
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