You can open a Roth IRA at a bank, brokerage, or robo-advisor — each charges different fees and offers different investment options
A Roth IRA is not a product you buy from one place. It is an account type you open at a financial institution, and that institution holds your money and investments inside it. You choose where to open it based on what you want to invest in, how much you want to pay in fees, and how much help you want making decisions.
The three main categories are traditional brokerages (which let you pick individual stocks and funds), robo-advisors (which automatically manage your money based on your age and risk tolerance), and banks (which offer savings accounts and CDs but limited investment choices). Your money grows tax-free inside any of them, but the fees, minimum deposits, and investment menu differ significantly.
Key Takeaways
- Brokerages like Fidelity, Vanguard, and Charles Schwab let you invest in thousands of stocks, bonds, and funds, with most charging no account fees or minimum deposit.
- Robo-advisors like Betterment and Wealthfront automatically build and rebalance a portfolio for you, usually charging 0.25% of your account balance per year.
- Banks offer Roth IRAs tied to savings accounts or CDs, which are safer but earn less, and some have minimum deposits of $500 to $2,500.
- You can move your Roth IRA from one provider to another without tax penalty through a process called a trustee-to-trustee transfer.
- The provider you choose does not affect your contribution limits or tax rules — those are set by federal law regardless of where you open the account.
Brokerages: The most investment options and lowest fees
A brokerage is a company that lets you buy and sell investments. The largest ones — Fidelity, Vanguard, Charles Schwab, E-Trade, and TD Ameritrade — all offer Roth IRAs with no account fees, no minimum deposit, and access to thousands of stocks, bonds, mutual funds, and exchange-traded funds (ETFs).
Fidelity and Vanguard are the two most common choices. Fidelity charges no fees for most accounts and lets you invest in their own funds or any fund from any company. Vanguard is owned by its investors and tends to have lower expense ratios on its own funds, meaning you pay less annually to hold them. Charles Schwab charges no account fees and offers a similar range of investments. All three have phone support and educational resources.
If you want to invest in individual stocks or options, a brokerage is your only choice. If you want to invest in just one or two low-cost index funds and never touch it, a brokerage is still the cheapest option because there is no advisory fee.
Robo-advisors: Automatic management for hands-off investors
A robo-advisor is a service that builds and manages a portfolio for you based on a questionnaire about your age, income, and risk tolerance. You deposit money, and the service automatically invests it across a mix of stocks and bonds, then rebalances it periodically. Common robo-advisors include Betterment, Wealthfront, Schwab Intelligent Portfolios, and Vanguard Personal Advisor Services.
Robo-advisors charge a management fee, usually 0.25% to 0.50% of your account balance per year. That means if you have $10,000 in the account, you pay $25 to $50 per year. Some, like Schwab Intelligent Portfolios and Vanguard Personal Advisor Services, charge nothing if your balance stays below a certain threshold (usually $500,000 to $1 million). Most have no minimum deposit or very low ones ($1 to $500).
A robo-advisor makes sense if you do not want to pick investments yourself but also do not want to pay a human financial advisor 1% or more per year. The trade-off is less flexibility — you cannot buy individual stocks or hand-pick which funds go into your portfolio.
Banks: Safety and simplicity, with limited growth potential
Most major banks — Chase, Bank of America, Wells Fargo, and others — offer Roth IRAs, but they are usually tied to savings accounts or certificates of deposit (CDs). A savings account at a bank currently earns 4% to 5% per year (rates change with the Federal Reserve), while a CD locks your money for a set term (3 months to 5 years) in exchange for a may provide rate.
Bank Roth IRAs are the safest option because deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. However, they earn far less than stock market investments over time. Many banks also require a minimum deposit of $500 to $2,500 to open the account.
A bank Roth IRA makes sense only if you are very close to retirement, extremely risk-averse, or using it as a temporary holding place while you decide where to move the money. For most people saving for retirement decades away, the lower returns make a bank account a poor long-term choice.
Comparing fees and minimums across provider types
| Provider Type | Account Fees | Typical Minimum Deposit | Investment Options |
|---|---|---|---|
| Brokerage (Fidelity, Vanguard, Schwab) | None | $0 | Thousands of stocks, funds, ETFs |
| Robo-advisor (Betterment, Wealthfront) | 0.25%–0.50% per year | $0–$500 | Pre-built portfolios of funds |
| Bank (Chase, Bank of America) | None to $25/year | $500–$2,500 | Savings accounts, CDs only |
How to move your Roth IRA if you change your mind
You are not locked into your first choice. If you open a Roth IRA at one provider and later want to move it to another, you can do so without paying taxes or penalties through a trustee-to-trustee transfer. You contact the new provider, they handle the paperwork, and the old provider sends the money directly to the new one. The whole process usually takes one to two weeks.
Do not withdraw the money yourself and deposit it at a new provider — that counts as a distribution and can trigger taxes and penalties. Always ask the new provider to initiate the transfer on your behalf.
You can also move money between investments within the same provider without penalty. For example, if you open a Roth IRA at Fidelity and later decide you want a robo-advisor instead, you can transfer your Fidelity Roth IRA to Betterment or Wealthfront without any tax consequence.
What to look for when choosing a provider
Start by deciding what kind of investor you are. If you want to pick your own investments and pay nothing for the privilege, choose a brokerage. If you want someone (or something) to manage it for you and do not mind paying a small fee, choose a robo-advisor. If you want absolute safety and do not care about growth, choose a bank.
Next, check the minimum deposit requirement and whether it fits your situation. Most brokerages have no minimum, so if you are starting with $500 or $1,000, a brokerage is fine. Some robo-advisors also have no minimum. Banks often require more upfront.
Finally, consider whether you want phone support and educational resources. Fidelity, Vanguard, and Charles Schwab all offer extensive help. Smaller robo-advisors may have only email or chat support. Banks have branch locations if you prefer in-person help.
Frequently Asked Questions
Can I open a Roth IRA at more than one provider?
Yes. You can have multiple Roth IRAs at different institutions. However, your total contributions across all of them cannot exceed the annual limit set by the IRS (currently $7,000 for most people, $8,000 if you are 50 or older). Track your total contributions carefully to avoid over-contributing.
Do I have to invest in stocks if I open a Roth IRA at a brokerage?
No. You can invest in index funds, bond funds, or money market funds instead. Many people at brokerages invest entirely in low-cost index funds and never buy individual stocks. The brokerage simply gives you the option.
What happens if I do not have enough money to meet a bank's minimum deposit?
Open your account at a brokerage instead — most have no minimum. Once you have saved more money, you can move the account to a bank later if you want to, though most people find a brokerage works better long-term.
Is my money safe at a brokerage or robo-advisor?
Brokerages and robo-advisors are not FDIC-insured like banks, but they are regulated by the Securities and Exchange Commission (SEC) and required to keep your money separate from theirs. If the company fails, your account is protected. However, if your investments lose value, that is not protected — you bear the investment risk.
Can I change my mind and move my Roth IRA later?
Yes, without penalty or tax consequence. Contact your new provider and ask them to initiate a trustee-to-trustee transfer. Never withdraw the money yourself, as that triggers taxes and penalties.