Which Roth IRA Should You Open? A Comprehensive Guide

Choosing the right Roth IRA can be difficult with so many options available. We've put together this comprehensive guide to help you make an informed decision about which provider is best for you.

Which Roth IRA Should You Open? A Comprehensive Guide

Choosing the right Roth IRA can be a daunting task. With so many options available, it can be difficult to know which one is best for you. To help you make an informed decision, we've put together a comprehensive guide to the top Roth IRA providers. We'll review Charles Schwab, Wealthfront, Fidelity Investments, Fundrise, Betterment, Interactive Brokers, Merrill Edge, and M1 Finance.

When it comes to Roth IRAs, Charles Schwab is a great option. It offers a robust platform with a variety of investment options, trading tools, and portfolio management options. Schwab is particularly notable for its extensive ETF evaluation capabilities, including more than 150 filtering capabilities that also incorporate socially responsible investing (SRI) selections. If you prefer to have a less practical investment management strategy, portfolios driven by financial advisors and the robo-advisor offer of Smart Portfolios are also available.

Wealthfront is one of the leading independent robo-advisors and it brings a lot to the table for investors looking for someone to do the investment work for them. Wealthfront chooses investments based on risk tolerance and time to retirement. All you need to do is add money to the account. Wealthfront chooses from investments in 11 asset classes, giving you a wide variety of funds and increasing your diversification, which can reduce your risk.

In addition to choosing your investments, Wealthfront also offers some important tools, including a robust financial planner that can help you keep track of all your assets in one place. The management fee for Wealthfront is a reasonable 0.25 percent, right in line with the industry standard. Betterment is another great robo-advisor option if you want someone else to handle investment and portfolio management for you. Betterment Digital manages its investments from a selection of around a dozen exchange-traded funds and collects only 0.25 percent of its assets annually. You'll get automatic rebalancing to keep your portfolio in line with your target allocation, automated tax loss collection (which only applies to taxable accounts), and access to financial advisors via in-app messaging. Interactive Brokers does everything traders and professionals need, and does it with high quality.

It excels in global trading and reach, fast execution and its advanced trading platforms. In short, Interactive Brokers is ideal for advanced traders. Interactive Brokers also does surprisingly well in mutual funds, offering more than 17,000 with no transaction fee (including over $4,000 USD). In addition, the company offers a “lite” version of its service, which does not charge commissions on stocks or ETFs, effectively competing against Schwab and Fidelity. Merrill Edge has a strong mix of investment tools and educational material focused on retirement planning, highlighting its strength as a Roth IRA provider.

The Retirement Evaluator and Portfolio History tools combine a long-term planning perspective with a detailed portfolio analysis so you can get a better idea of your retirement readiness. Since Merrill Edge is under the umbrella of Bank of America, your other accounts within the institution can be added so you can enjoy a more holistic portfolio analysis thanks to this full integration. As one of the industry's leading digital investment advisory platforms, Wealthfront stands out among Roth IRA holders due to its superior goal tracking, integration features and digital planning tools. Retirement-driven investors will especially appreciate Wealthfront's use of third-party data and robust account integration features that give you a fuller understanding of your retirement landscape. M1 Finance has created an innovative platform that allows you to manage your money comprehensively, making it a natural landing point if you want your finances to be kept in one place. Not only will you have access to save, spend and borrow products but you'll also be able to take advantage of a unique investment management solution that supports extensive portfolio customization while also putting management strategy on autopilot. Finally, Fidelity Investments offers an impressive selection of index funds with a zero expense ratio and mutual funds with no minimum purchase making it a great place to open a Roth IRA.

In addition to its rich menu of fund options, Fidelity's robust library of retirement resources helped this platform win the top spot on our list of the best online brokers. No matter which provider you choose for your Roth IRA account, make sure that it meets your needs and goals as an investor. Do your research before making any decisions so that you can make an informed choice that will help you reach your retirement goals.