The BEST 5 Places To Open a ROTH IRA for Beginners!

What are the 5 Best Places to open a Roth IRA? I explain in this video what you should be looking for, and suggest some options for you!

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Before we even go into where the BEST place to open a Roth IRA is, we need to ask ourselves the question:

"What type of investor am I?"

If you're the type of investor who likes to be more hands on, wants to choose exactly what they're investing in, then you're going to want to choose what's called an online brokerage where you're able to do these activities.

If you're the type of investor who likes a more hands-off approach, a more passive approach where someone or something manages your money for you - you can open your Roth IRA at a roboadvisory.

A roboadvisor, for those of you who do not know — is essentially an online platform with an algorithimically driven financial advisor. These firms hire investment pros to develop a handful of portfolios targeting different risk tolerances of investors. So if you're more aggressive, there will be a portfolio based on your risk tolerance, or if you're more of a conservative investor, there will be portfolio for that as well.

For Active Investors:

1. Vanguard.com, this is the home to the index fund. Vanguard is known for being the leader in low-cost funds and ETFs. Vanguard’s mutual funds and ETFs aren’t just low cost; they’re significantly less expensive than the industry average. Vanguard’s average expense ratio is 0.10%. The average expense ratio across all mutual funds and ETFs is 1.05%, according to data from investment researcher Morningstar.

Opening a Roth IRA through Vanguard is free and requires no account minimums, but buying an Index funds through vanguard have a minimum investment of around $3,000

The interface is slightly hard to use, and that is probably my biggest gripe with Vanguard, but in case you do get lost - they do have stellar customer support to help you out.

This brokerage is best for Buy and hold investors, mostly long-term retirement. It's not great for active traders - it's good for placing orders and not much more.

2) Fidelity

Is also great for beginners +

Has a really easy to use interface + great calculators for almost everything you need for investing/retirement/savings planners.

I think that Fidelity and Vanguard are pretty much neck and neck for best places to open your Roth IRA especially because of the low cost funds that they both offer.

3) Charles Schwab - side grade / lateral move

This is an excellent choice for a Roth IRA, there are no fees or balances like the other two suggested here. And they have a robo advisor available with no management fee, but it does have a $5,000 minimum.

Now let's talk about the 2 Robo advisors I like for more hands-off investors:

1. Wealthfront is a roboadvisor that has a $500 minimum to open, and their management fee is 0.25% of your assets - which is much lower, a typical human financial advisor is going to be closer to 1% of your assets, so if you have $10k to invest, a human might take $100 per year, Wealthfront will take $25 per year.

2. Acorns
I actually did a review on acorns, and the reason I like this so much is that it is very beginner friendly. With the Acorns Later account, the minimum is only $5. This is super beginner friendly, but the fee is $3 a month which doesnt sound like a lot, but is actually pretty high.

To make Acorns Later more worth it than say, Wealthfront, from a fee perspective, you'll need to have $14,600 in your retirement account to do so.

Acorns is a great place for anyone to get started that is not financially savvy and is looking for an easy solution to save for retirement.

▶️ My name is Humphrey Yang, I am an entrepreneur who has built businesses and am passionate about Personal Finance. This channel is dedicated to helping people (whether you're 21 or 81) become better with Personal Finance, Investing, and Entrepreneurship. I hope these videos help!

Disclaimer: I am not a financial advisor, any investment commentary are my opinions only. Some of the products and services that appear on this channel are from companies that I have an affiliate relationship with, such as Robinhood, for which I recieve a small percentage made via those links, but it doesn’t cost you anything extra!