Roth IRA Best Rates [2020 Edition]

In this article, we will take a look at the Roth IRA Best Rates and determine the Best Roth IRAs where you want to put your retirement funds.

When considering opening a Roth IRA, many people want to investigate Roth IRA best rates. However, this is not the question to really be asking. Rather, we want to know what are the best Roth IRAs in which to put our retirement funds.

Why is this? Well, a Roth IRA is an investment vehicle not an investment in and of itself. Roth IRAs, as such, do offer “rates”. Rates are determined by the investments that we chose within the Roth IRA framework. Thus, we need to first determine where we want to put our retirement money–the best Roth IRAs- and then we can choose investments within that Roth IRA.

Roth IRA Best: Which Roth IRA Best Suits Your Needs

In searching for the Roth IRA best, we need to take a look at the various options.

First, you will want to know how much you can put in your Roth IRA?  After you determine this, while it is relatively easy to learn how to open a Roth IRA in any of these places, the choice that you make can well determine your financial future.

There are basically three places in which you can open a Roth IRA account: your bank, a mutual fund, or a brokerage house. Let’s take a look at each of these situations.

Opening a Roth IRA Account At Your Bank

It may be that you can open a Roth IRA at your bank. But should you? Most banks do offer Roth IRA investment services but it may very well not be among the best Roth IRAs that you can choose. Why not?

Banks are usually not the place to open a Roth IRA account because your investment options are severely limited.

Usually, you only get to choose from CDs, money market funds, and some variety of cash equivalent.

Another downside of using your bank as your Roth IRA provider is that banks often charger higher fees on transactions than a mutual fund or brokerage house.

With that said, many banks have recently expanded and are vying to become full service financial providers. If you have a lot of trust and confidence in your bank (which is tough with all the bank activities of late), then you may want to set up a meeting with your bank counselor to find out if their Roth package is right for you.

Opening Your Roth IRA With a Mutual Fund Company

I am a big fan of opening your Roth IRA with a mutual fund company.

To me, mutual funds offer the best Roth IRAs because you have the availability that you need without a whole lot of risk. (I find it ironic that it is so easy to open a Roth IRA account with so little paperwork given the huge importance of retirement money.)

After we open a Roth IRA account, we will then be looking for Roth IRA best rates within that account.

Mutual Fund companies come in many varieties so be mindful to choose the right ones.

When choosing a mutual fund for your Roth IRA, be especially mindful of two things: commissions/account fees and variety of funds available.

Avoid–like the plague–any mutual funds with large commissions and fees. Many of these mutual funds make their money on the fees that they charge you. Thus, they will take a percentage of your profits and outfit themselves with new homes with your retirement money. Don’t allow this to happen to you.

Some mutual fund companies that have earned loyalty for their honesty and investment availability options are Vanguard (my personal favorite), Fidelity, and Charles Schwab.

Opening Your Roth IRA with A Brokerage House

Your final option in choosing the best Roth IRAs is a brokerage house.

When we inquire as to the Roth IRA best rates, you will have the best opportunity to earn money in your Roth IRA if you go with a discount brokerage house. However, I do not recommend this.

Why?

If you have your retirement money in a brokerage house, you will have the availability to trade stocks frequently at practically no charge.

While this may seem like a benefit, for your retirement fund, it is not safe and offers a temptation that you do not need.

When the market plummeted in 2008/2009, I saw many people lose their entire retirement savings. This happened because they were “playing the market” with their retirement money and this is never a good idea. Mutual funds, which diversify your financial assets in a number of investments, were not as affected as many individual stocks, which essentially lost all of their value.

Though you can get some of the Roth IRA best rates if you are a savvy investor, it is probably not the safest choice for the majority.

Roth IRA Best Rates: Summary

As we stated in the beginning, a Roth IRA is an investment vehicle and not an investment itself. You first need to find which would be among the best Roth IRAs for you: your bank, a mutual fund, or a brokerage service.

I do not recommend your bank because this is not usually their specialty. Also, fees tend to be higher.

I do recommend a Mutual Fund with low fees and commissions. This will allow your money to grow steadily without the risk of losing it all.

Finally, you may find that you can achieve the Roth IRA best rates with a brokerage account because you can trade stocks–and have potential huge gains–by investing in personal stocks. However, this is too risky for your retirement money. Do that with your “play money.”

My Conclusion: Open your Roth IRA account with a mutual fund company, set up steady automatic payments that equal the maximum Roth contribution (currently $6,000), and forget about it.

When retirement comes, you will be happy that you took this path!