This is another article in our Roth-IRA series. In this article we will go over a list of the best No-Fees Roth IRA account and the criteria to select your Roth IRA trading account. Fees can take a significant portion of the returns you earn on your investments. There are various types of fees a custodian can impose on you, some common fee types are:
Annual Account maintenance fees
Some Roth IRA custodians charge you custodial fees or account maintenance fees which could range from $50-$200 per year. However many financial institutions and low cost brokerage houses have now started offering Roth IRA accounts which do not have annual fees or minimum balance requirements.
If your Roth IRA account provider provides the ability to ability to trade in individual stocks and ETF, they will charge you a fee on each transaction you perform. The fee will vary from one financial institution to another and will depend on whether you are placing the order online or placing a broker assisted order. These fees can range from $5-$50 per transaction.
Management fees on Mutual accounts
Mutual funds cover their expenses by taking a slice from your investment in the fund as management fees. The fees that is been charged can be seen in the expense ratio published by the mutual fund. Also many funds charge a fee when you invest some money in the fund, upfront (known as front-loading) and when you withdraw money from the fund (known as back-loading). However there are some funds which will not charge you such fees either upfront or on withdrawal. Such funds care called No-load funds. When selecting a Roth IRA account, revive how many no-load mutual funds are available for investment.
You should ideally go for a Roth IRA account which does not require a minimum balance and has no annual maintenance fees. However there are more considerations to select a Roth IRA account provider:
Additional service to consider when choosing a Roth IRA provider
When you open a Roth IRA account it is likely that you will stick with the account provider for many years, so you must take some time to perform the initial research.
- Research and investment tools: If you are just starting out with your first investment account, the amount of financial data available will intimidate you but you will soon get comfortable with all the key data to look at. Access to good quality research and tools in your retirement savings account will help you make better investment decisions.
- Real time quotes: Real time quotes will offer you the ability to know the current prices of your investments and help you make better decisions about your transaction
- Range of assets: Not all financial institutions allow you to trade all instruments in the Roth IRA. Also the range of mutual funds and ETF permitted may be limited at certain financial institutions. Please check with customer support about the asset classes and the type of
- Overall services provided by the financial institutions: It is likely that the company you select as your Roth IRA account will also be your choice for other types of retirement and trading accounts. Plus it is easier to manage accounts under one login and not having to deal with multiple systems. At some late point you may decide to convert one account type, for example Traditional IRA to Roth IRA, having both accounts with the same custodian will make the conversion process simpler.
- Ease of fund transfer: If you can maintain your checking account with the same financial institution, you will be able to transfer funds quickly between your checking account and Roth IRA account when needed.
- Customer support: Good customer service representative are informed people who can help you setup your account, answer your questions, move your account or point you in the right direction.
Some good no-fees and low fees Roth IRA account providers are
- Charles Schwab
- Option Express
If you have any question please let us know on the FAQ page for Roth IRA.