Top 5 Places to Open a Roth IRA (FOR BEGINNERS)

Today we’re going to give a bit more information about the best places to open a Roth IRA. If you’re not sure what a Roth IRA is, then be sure to Read our Article on the difference between different types of IRA accounts. That way you’re up to speed for what we’re going to cover today. Of course, just because you know you’re supposed to open a Roth IRA, doesn’t mean you automatically know where to do it. Not to worry! In this video, we’re going to give you the top 5 places to open a Roth IRA so you’re ready to take action. Let’s get to it!

Vanguard

First up, when it comes to opening your Roth IRA, you definitely can’t go wrong with Vanguard. Vanguard is the first place everyone should look. It is an “old school” retirement investment brokerage. It isn’t just any ordinary stockbroker. In the industry, Vanguard is known for its cheap ETF and index fund costs. According to NerdWallet, the average Vanguard expense ratio is 0.1 percent compared to 1.05 percent which is the industry average. Opening a Roth IRA with Vanguard is free and does not require account minimums. Not only that, they offer great customer service. That’s a plus! But, on the downside, their website is difficult to use. Especially if you’re a beginner.

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The interface can be difficult to navigate. Although, if you are the “purchase and hold for the long-term” sort of person, you won’t need to use it too often. Vanguard is also recognized for its low-cost target-date funds. Target-date funds are a form of mutual fund that automates your retirement investment. Once you’ve completed the initial setup and purchased it, you won’t have to do anything with it until you retire. It progressively modifies your asset allocation. For beginners, target-date funds are an excellent choice. Outside of a target-date fund, you’d have to manually build your own portfolio of stocks, bonds, and cash, and then modify the asset allocations yourself.

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Over time, you would want to shift your money away from volatile equities and toward more stable income-producing investments. This requires some skill. But investing in a target-date fund avoids the need for you to do so because the fund will do it for you. If you like automating your retirement, better go with target-date funds. In that case, Vanguard is a terrific spot to create your Roth IRA. Also, Vanguard is fantastic for buying individual stocks, various types of ETFs, and mutual funds. A Vanguard Roth IRA will allow you to do it all with little cost. When compared to other brokerages, Vanguard is the leader in retirement accounts. And with a Roth IRA at Vanguard, you really can’t go wrong.

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Fidelity

Next up is Fidelity, which is another great place to start a Roth IRA. Fidelity is great for beginners and they have a ton of resources for you. They have a full list of different financial calculators for almost every personal finance scenario imaginable. They also have an easy interface and great customer support. They’re also known for low-cost and ZERO-cost funds. If you’re new to investing, you’ll probably start with something simple like index funds.

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While determining where to create your Roth IRA, consider a platform that will grow with you. Another thing about Fidelity is its cheap commissions. If Vanguard costs seven dollars each stock trade, Fidelity just charges four dollars and ninety-five cents. Fees and commissions are something you should think about before opening your Roth IRA at any site. With Fidelity, you don’t have to go through lengthy automated phone menus and such to speak with customer service.They’ll hold your hand and coach you through any questions you have regarding your account.

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Acorns

Acorns is the third site to open a Roth IRA. If your grandma wants a computer, are you going to give her a five thousand dollar high end gaming system or an iPad? She would just become confused if you’ll give her the gaming computer. Acorns is comparable to the iPad of investing. It offers few options yet is incredibly easy to use for newbies. If you’re just getting started, you’ll enjoy Acorns. When you are struggling with saving money, acorns is for you. Acorn is fantastic for beginners since it makes it simpler for you to save money for investments. Once you start your Roth IRA, you should be able to continue building up a sizable portion of your retirement savings from the extra change. Unlike Fidelity and Vanguard, Acorns is a Robo-advisor.

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This means that acorns will advise you and handle everything for you. When you open your Roth IRA at Acorns, one of the questions they’ll ask is which of their five portfolios you want to put the money in. You don’t have to be aware of what the stock market is doing at the moment. All you have to do is choose which portfolio you want, ranging from the most conservative to the most aggressive. After selecting your portfolio, you may review the contents. Acorns also has a popular “round up” feature that covertly takes the extra cents from your bank transactions and purchases. Then it applies that money to your investment accounts. It is investing on auto-pilot. Each portfolio is expertly crafted and supported by data to maximize profits while lowering risk. It just doesn’t get any more streamlined than that.

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With Fidelity and Vanguard, there will be a little bit more of a learning curve. But for Acorns, it makes it incredibly simple for you to have the money in your Roth IRA invested in the market as quickly as possible without any prior expertise. Acorns is very user-friendly for beginners. The minimum deposit amount for the Acorns Later account is just five dollars. You’ll need to have $14,600 in your retirement account to make Acorns Later more cost-effective. Anyone searching for an easy way to save for retirement but lacking in financial literacy can start with Acorns. If you’re still unsure where to open your Roth IRA, stay till last…

Stash

Another excellent location for newbies is Stash. Stash’s themed portfolios set it apart from Acorns. While they both offer a great “round-up” option, Stash also provides investments in green and clean firms that are pioneering technologies like renewable energy. Since everything is clearly arranged, you won’t have to search for it within strange financial and technical jargon. This makes it incredibly simple for you to create a portfolio based on your interests without needing to wade through complicated financial terms. If that is how you want to invest your Roth IRA, you better check out Stash.

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Between the two Robo-advisors, Stash gives a lot more tools and opportunities for customization than Acorns does. This includes the ability to purchase fractional shares of individual stocks and ETFs, which is another useful feature. Another Robo-advisor like Stash and Acorns is Betterment. Betterment gives greater advice and a larger variety of account possibilities. But it is not as straightforward as Acorns or Stash. It provides a wide range of account options in addition to Roth IRAs, including standard IRAs, SEP IRAs, joint accounts, trust accounts, and 401(k).

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Betterment

Along with fully taxed non-retirement investment accounts, Betterment also offers amazing savings accounts known as smart saver accounts. These pay more than two percent, which is more than the interest you would get at almost any bank . This means you can store your investments and savings in one location. This is convenient because it means you have one fewer username and password to remember. However, you’re likely going to need more than just a Roth IRA. To save money for a down payment on a home in a few years or merely to pay for your ideal trip, you’re going to need an emergency fund in an investing account. Because Betterment offers such a broad variety of account choices, you can essentially have all of the accounts you need for various purposes at one location rather than having them scattered across several locations.

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If you like the idea of investing based on your goals, you should consider opening your Roth IRA with Betterment. So, if you’re a newcomer and need a very simple technique, consider a Roth IRA at Acorns. If you want something more extensive yet as easy to use as Acorns, Betterment is a fantastic choice. If you appreciate the idea of having all of your accounts in one place and are pursuing many different financial goals at the same time, choose Betterment. Or, choose a Roth IRA at Stash if you appreciate the concept of investing in themed portfolios. Of course, if you want to open a Roth IRA on a platform that can handle everything, go with Vanguard or Fidelity, even if they are a bit more challenging to use. Those who like doing their own research before investing will enjoy a more sophisticated choice like Fidelity or Vanguard. Hopefully, you now have a pretty good idea of where to open your Roth IRA. The most crucial thing is to get started, choose a platform, open your Roth IRA, conduct research, and begin investing. Of course, this list of top places to open a Roth IRA isn’t exhaustive.

Top 5 Places to Open a Roth IRA (FOR BEGINNERS)

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