Comparing Roth IRA Providers

by Cynthia Myers

Many different financial institutions offer Roth IRAs. With a Roth IRA, you pay taxes on the money you put into the account, but you withdraw it and the interest it earns tax-free after you retire. Banks, credit unions and investment companies provide an array of options for opening your retirement fund. To determine which Roth IRA provider is right for you, a number of factors must be weighed. Comparing the pros and cons of various providers side by side will help you decide which provider to entrust with your retirement savings.

Types of Providers

Most financial institutions -- from local banks or credit unions to online banks and large investment companies -- offer Roth IRAs, each with advantages and disadvantages. You can sit down at your local bank and discuss your savings face to face with a banker. You might save money and make all the decisions yourself with an online investment company, or rely on the financial planners at a large investment company to help you decide how to invest your money.

Investment Options

Roth IRA providers differ primarily in the fees they charge and the types of investments they offer. Smaller banks and lower cost investment companies may limit the types of instruments in which you may invest. For example, a bank might offer only certificates of deposit for your Roth IRA. An online investment company may offer only a few mutual funds, while a larger investment company may allow you to choose among stocks, bonds and mutual funds. A wider range of investment options allows you to balance risk and gain to find a level of yield with which you’re comfortable.

Money Matters

You’ll pay a fee to open and/or maintain your Roth IRA. Some providers charge a low, flat fee to open the account and annual fees thereafter. Others charge monthly or quarterly maintenance fees, which may be a flat rate or a percentage of the account balance. High fees can cut into the rate at which your investment grows. In addition to fees, you must compare each provider’s investment requirements. Some Roth IRA providers set investment minimums for opening an account or for making additional contributions. When comparing providers, you must eliminate those whose minimum requirements exceed the amounts you have to invest.


Some investment companies' financial advisers or counselors will sit down with you to map out a plan for your retirement. They can guide you through the process of opening a Roth IRA and choosing investments. Other financial institutions offer articles and descriptions of investment options online, but it’s up to you to read and interpret this advice. Still other companies have financial advisers who can help you with your investments over the phone. You may also hire an independent financial adviser to study your financial picture and offer advice for opening your Roth IRA.

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