Best Roth IRA Accounts for November 2026

The best Roth IRA for most readers comes down to a few practical differences. All seven providers in this ranking charge $0 for online stock trades, and six of the seven have either a $0 account minimum or “$0 to open.” Commissions on stock trades therefore cannot separate these accounts. They differ in four other areas:

• What you pay per options contract. Fees run from $0 to $1.
• Who requires money up front. eToro is the one provider with a dollar minimum, $50.
• Asset access. Crypto and fractional shares are not available at every provider.
• Costs and features beyond headline pricing. These include fund expense ratios, interest on uninvested cash, support and research tools.

The Roth IRA itself is the same product everywhere. The IRS sets the contribution limits, income limits and withdrawal rules, and every custodian has to follow them. A Roth IRA at Fidelity and a Roth IRA at Ally carry identical tax treatment. Choosing a provider means choosing the investments, costs and service you will live with for decades. It does not decide how the account is taxed.

Matching the data to common situations

Which provider suits you depends mostly on how you will use the account:

• You will trade stock or ETF options in the account. SoFi, eToro and Robinhood (for stock and ETF options) charge $0 per contract. Vanguard’s $1 per contract is the most expensive in the group.
• You are starting with a small amount and want to buy specific stocks. Fractional shares matter, and Ally does not state whether it offers them. eToro has a $50 minimum.
• You want crypto exposure in a tax-free account. Ally does not offer crypto. At the providers that do, confirm that the product can sit inside a Roth IRA specifically.
• You will hold index mutual funds for decades. Commissions and options fees barely matter. Compare fund expense ratios and fund minimums, which is where Fidelity’s zero-expense-ratio funds and Vanguard’s low-cost lineup come in.
• You want help learning. Schwab’s education and coaching are the clearest strength in this area.

How to read the ranking

The numbered order is an overall ranking. It is not a sort by any single column in the comparison table. You can see this in the numbers:

• Fidelity sits at number 1 with a $0.65 per-contract options fee.
• SoFi (number 5) and eToro (number 6) both charge $0 for options.
• Vanguard (number 4) charges the highest options fee in the group, $1 per contract.

If the ranking were a cost ranking, those positions would look different. A lower rank does not mean a more expensive account, and a higher rank does not mean the cheapest one for your situation.

This matters because the fees that will cost you the most depend on how you use the account. A long-term index fund investor may never pay an options commission in their life. For that person, the difference between $0 and $1 per contract is irrelevant. Fund expense ratios, fund minimums and the interest paid on idle cash affect their results far more. Someone who sells covered calls every month faces almost the reverse situation.

The useful way to read the list is to identify the two or three costs or features that apply to how you plan to invest. Then check whether the providers you are considering differ on them. Where they don’t, the decision moves to service, tools and the fund lineup.

Where the seven providers actually differ

The real differences between the seven providers are few. Grouping them is more useful than going provider by provider.

Options pricing falls into four tiers:

• $0 per contract. SoFi and eToro, plus Robinhood for stock and ETF options.
• $0.50 per contract. Ally.
• $0.65 per contract. Fidelity and Charles Schwab.
• $1 per contract. Vanguard.

Minimums split into three groups:

• $0. Fidelity, Charles Schwab, Robinhood and Ally.
• “$0 to open.” SoFi.
• $50. eToro.
• Not stated. Vanguard gives no account minimum figure.

Asset access differs at the edges:

• Fractional shares are available at six providers. Ally does not state whether it offers them.
• Crypto is available at Fidelity, Charles Schwab, Robinhood, SoFi and eToro. Ally does not offer it, and Vanguard does not state whether it does.

Terms to confirm before opening. Robinhood’s $0 options price applies to stock and ETF options, so treat any other options product as priced separately until you confirm it. SoFi’s “$0 to open” covers the opening requirement, not a promise that every investment inside the account can be bought for any amount. Vanguard gives no figure for its account minimum or crypto access, and Ally gives none for fractional shares. Crypto access at a provider is also not automatically crypto inside a Roth IRA: some firms offer crypto through a separate account or entity, and others give retirement investors exposure through exchange-traded products. If tax-free crypto growth is the reason you are choosing a provider, confirm that the specific product can be held in the Roth IRA account type before you open it.

Everything else that separates these firms comes down to fund lineups, cash interest, research platforms, education and phone support. The provider notes below cover those areas where there is something specific to say.

Provider notes

Fidelity and Charles Schwab

On headline pricing, Fidelity and Charles Schwab are identical: a $0 minimum, $0 stock trades and $0.65 per options contract, with fractional shares and crypto available at both. The real differences are in how each firm handles the rest of a Roth IRA.

Fidelity offers a set of index mutual funds with a zero expense ratio. Fidelity is one of only a small number of firms that run funds at no annual fund cost. For a buy-and-hold Roth IRA, that removes a cost that otherwise compounds against you every year. Fidelity also pays a comparatively competitive rate on uninvested cash. That matters during the gap between depositing a contribution and investing it. Its Roth IRA carries no account fee or minimum unless you choose its managed product, Fidelity Go, which has its own pricing.

Fidelity’s “$0 commission” has some fine print worth knowing:

• Sell orders are subject to an activity assessment fee. Historically this has ranged from $0.01 to $0.03 per $1,000 of principal.
• A limited number of ETFs carry a $100 transaction-based service fee.
• An Options Regulatory Fee applies to both buying and selling options, on top of the $0.65 per contract.

None of these is large for a typical retirement investor, but “$0 commission” is not the same as “$0 cost to trade.” Critics of Fidelity’s platform point to relatively limited crypto and commodities trading and to planning tools that can be hard to navigate.

Charles Schwab stands out for investor education. It offers evergreen educational material, timely market commentary and regularly scheduled coaching sessions at no cost. It also runs several trading platforms, along with portfolio analysis tools and research screeners. Phone support runs 24/7, and in-person support is available at branches. The trade-offs are a low interest rate on uninvested cash and relatively high costs on some of its mutual funds. Those points matter more in a retirement account than in a trading account, because cash and funds can sit there for years.

Choosing between them. Because their headline pricing is the same, Fidelity versus Schwab usually comes down to two questions:

1. Will you hold index mutual funds and leave cash in the account at times? Fidelity’s zero-expense-ratio funds and higher cash rate work in your favor there.
2. Do you want structured learning, coaching and branch access? Schwab’s strengths line up with that.

Robinhood

Robinhood matches the $0 minimum and $0 stock trades of the firms above it. It differs on options: $0 for stock and ETF options against $0.65 at Fidelity and Schwab. For a Roth IRA holder who writes covered calls or buys protective puts on stock and ETF positions, this is the one entry in the top three that removes the per-contract commission. Fractional shares and crypto are both available.

Vanguard

Vanguard’s options fee of $1 per contract is the highest in the group. That number is less telling than it looks, because Vanguard does not pitch itself as an options platform. Its focus is long-term, buy-and-hold investing in low-cost mutual funds and ETFs. For the investor who matches that profile, the per-contract fee may never come into play.

A few points matter more for that investor:

• Fund costs. Vanguard is known for low management fees across a very large fund lineup. That includes target retirement funds, which hold a mix of stocks and bonds that becomes more conservative as the target year approaches.
• Fund-level minimums. An account can open with no minimum while individual funds still require one. Some Vanguard mutual funds have carried minimums of up to $3,000. ETFs avoid this, since you buy them by the share.
• Platform. The platform design is basic, and sophisticated trading capabilities are limited.
• Guidance. Vanguard offers human financial advisors and an automated robo-advisor for investors who prefer managed portfolios.

Vanguard offers fractional shares.

SoFi and eToro

SoFi and eToro both charge $0 for stock trades and options, and both offer fractional shares and crypto. They differ on the minimum:

• SoFi has “$0 to open.”
• eToro has a $50 minimum. It is the only provider in this ranking with a positive dollar minimum.

For anyone planning to fund a Roth IRA with a regular contribution, $50 is unlikely to be a barrier. It matters mainly if you want to open the account first and fund it later.

Ally

Ally has a $0 minimum, $0 stock trades and $0.50 per options contract. That fee sits between the $0 tier and the $0.65 charged by Fidelity and Schwab. Ally is the only provider here that does not offer crypto, and it does not state whether it offers fractional shares.

If you want to buy small dollar amounts of individual stocks or hold crypto exposure in your Roth IRA, those two gaps are the ones to weigh. For a portfolio built from whole-share ETFs, neither may matter.

How to choose a Roth IRA provider

Once you accept that the tax wrapper is identical everywhere, choosing a provider is a matter of matching costs and features to how you will use the account. The following areas decide it.

Commissions and fees

The cost of a Roth IRA is not one number. It is the sum of several, and which ones matter depends on what you hold and how often you trade.

Trading commissions. All seven providers charge $0 for stock trades, so this cost is neutralized for stocks and ETFs. Options are where commissions remain. Options fees are charged per contract on each side of a trade. Opening and closing a position are two separate charges.

Hypothetical example (for illustrating the mechanics only): Assume you trade 10 contracts per position and open and close 24 positions a year. That is 48 trades of 10 contracts each, or 480 contracts.

At this activity level, the gap between the cheapest and most expensive tier is $480 a year. At one or two trades a year, it is a few dollars. Even at $0 per contract, regulatory fees on options transactions can still apply, so “$0” refers to the broker’s commission, not every charge on the trade confirmation.

Fund expense ratios. Mutual funds and ETFs charge an annual percentage of the assets invested. You never see a bill: the cost comes out of the fund’s returns. In a Roth IRA held for decades, this is often the largest cost of all.

Hypothetical example: On a $50,000 balance, a fund with a 0.50% expense ratio costs $250 a year. A fund with a 0.03% expense ratio costs $15 a year. Over time the gap widens, because the money lost to fees also stops compounding. Zero-expense-ratio index funds, such as those Fidelity offers, remove this line entirely for the funds that qualify.

Account fees. These include annual maintenance fees, inactivity fees, paper statement fees and transfer-out fees. A Roth IRA you plan to hold for 30 years should ideally carry no recurring account fee. If you ever move the account, a transfer-out fee is charged once. Look at the provider’s full fee schedule before opening, not just the trading commissions.

Management fees. If you choose a managed portfolio or robo-advisor inside your Roth IRA, the provider charges an annual percentage of assets on top of the underlying fund costs.

Hypothetical example: A 0.25% management fee on a $40,000 Roth IRA is $100 a year. Whether that is worth paying depends on whether you would otherwise build and rebalance the portfolio yourself.

Cash drag. This is the money you lose by not investing, rather than a fee. When you contribute $7,000 to a Roth IRA, it often lands as cash first. It earns whatever rate the provider pays on uninvested cash until you buy something. Providers pay very different rates: Fidelity’s is competitive, while Schwab’s is low. Leaving a contribution in a low-yield sweep for months has a real cost. The simplest fix is to invest contributions promptly. You can also hold cash in a money market fund if the provider offers one.

Available assets

A Roth IRA can hold stocks, ETFs, mutual funds, bonds, CDs, money market funds and, at some providers, options and crypto-related products. The question is whether the specific assets you want are available inside the IRA at the provider you choose.

Fractional shares let you invest an exact dollar amount, such as a $500 monthly contribution, into a single stock or ETF. Without them, you buy whole shares and leave the remainder in cash. This matters most for small balances and for investors who want positions in high-priced stocks.

Mutual funds matter for investors who want a single fund to handle allocation, such as a target-date fund. Check whether the provider offers its own low-cost funds and what it charges to buy funds from other companies. Some brokers charge transaction fees on outside funds.

Options in a Roth IRA come with limits that do not apply in a taxable margin account. An IRA cannot be pledged as collateral for a loan. As a result, strategies that require borrowing, such as selling uncovered calls, are generally not permitted. Strategies that are fully secured can be allowed subject to the broker’s approval levels. Examples include covered calls, cash-secured puts, buying calls or puts, and certain spreads. Each broker sets its own approval tiers for IRAs.

Crypto is the least standardized asset class here, and access at a provider does not guarantee access inside the IRA.

Your style

How you intend to manage the account narrows the field faster than any feature list:

• Self-directed, buy-and-hold. You pick a few funds and add to them each year. Fund costs, fund minimums, fractional shares and cash interest matter. Options pricing does not.
• Self-directed, active. You trade individual stocks or use options strategies allowed in IRAs. Per-contract fees, platform quality and research tools matter.
• Hands-off. You want someone or something else to build and rebalance the portfolio. Look at whether the provider offers a managed portfolio or robo-advisor for Roth IRAs and what it charges as a percentage of assets. Vanguard offers both a robo-advisor and human advisors, and Fidelity offers Fidelity Go.

You do not have to pick one style forever. Some investors keep a core of index funds and trade a small slice actively. In that case, the provider needs to handle both well enough, and the cost that matters most is the one tied to the larger share of the balance.

User experience

You will log into a Roth IRA account less often than into a checking account. You will still make contributions, check allocations, rebalance and eventually set up withdrawals. A few practical points tend to matter:

• How easy it is to set up automatic contributions, and whether they can be invested automatically.
• Whether the contribution screen asks which tax year a deposit is for. Between January 1 and the filing deadline, you can contribute for either the current or the prior year.
• Whether the mobile app supports the same actions as the website.
• How the provider handles required paperwork, such as beneficiary designations.

Vanguard’s platform is basic. For a buy-and-hold investor who logs in a few times a year, that may be acceptable. An active trader may find it limiting.

Research tools

Research tools include stock and fund screeners, analyst reports, portfolio analyzers and retirement planning calculators. Schwab offers top-tier portfolio analysis tools and research screeners. Fidelity offers a wide set of planning tools, though some are hard to navigate.

For a retirement investor, a good planning tool estimates whether your savings rate puts you on track and shows your overall asset allocation across accounts. That can be worth more than any single stock screener.

Educational content

If you are opening your first Roth IRA, the provider’s education library can shorten the learning curve. Useful material covers how to pick funds, how asset allocation works, how to rebalance and how Roth withdrawal rules apply. Schwab’s free educational material, market insights and scheduled coaching sessions are the strongest in this group.

For a beginner, the decision is usually simpler than it looks. Pick a provider with no account fee and no minimum. Make sure it offers a low-cost, broadly diversified fund you can hold for years, such as a target-date fund or a total market or S&P 500 index fund. Then set up automatic contributions.

Roth IRA rules that apply at every provider

The following rules come from the tax code, not from any broker. They apply identically at all seven providers.

Who can contribute

You need earned income. IRA contributions must come from taxable compensation. That includes wages, salaries, commissions, tips, bonuses and net income from self-employment. Investment income, rental income and pension payments do not count. You can contribute up to the annual limit or your earned income for the year, whichever is lower.

Spousal Roth IRA. A married couple filing jointly can make contributions for a spouse with little or no earned income, based on the working spouse’s compensation. The couple’s combined contributions cannot exceed their combined taxable compensation.

Graduate students. Since the SECURE Act, taxable non-tuition fellowship and stipend payments count as compensation for IRA purposes. A graduate student whose stipend is taxable may be able to contribute even without a traditional paycheck.

Income limits. The amount you can contribute directly to a Roth IRA phases out as your modified adjusted gross income (MAGI) rises. MAGI is your adjusted gross income with certain items added back. For most people it is close to their AGI.

Below the range, you can contribute the full amount. Within it, the allowed contribution shrinks. Above it, you cannot contribute directly.

There is no age limit. You can open and contribute to a Roth IRA at any age, as long as you have earned income and meet the MAGI test. Someone in their 30s, 50s or 70s with qualifying income can still contribute.

Workplace plans don’t block a Roth IRA. Participating in a 401(k) affects whether traditional IRA contributions are deductible. It does not affect Roth IRA eligibility, which depends only on MAGI and earned income.

How much you can contribute

These limits are combined across all your IRAs, traditional and Roth. With two Roth IRAs and one traditional IRA, your total contributions to all three for 2026 cannot exceed $7,500 (or $8,600 at 50 or older). Opening accounts at several providers does not increase the limit.

The IRA limit is separate from workplace plan limits. For 2025, the 401(k) employee deferral limit was $23,500. Someone who maxes out a 401(k) can still contribute the full IRA amount if they are otherwise eligible.

Deadline. You can make contributions for a tax year until that year’s tax filing deadline, typically around April 15 of the following year. Extensions do not extend it. Contributions made between January 1 and the deadline must be designated for the correct year. Most contribution screens ask, and the provider reports the designation to the IRS on Form 5498.

Excess contributions. Contributing more than allowed triggers a 6% excise tax on the excess for every year it remains in the account. This can happen by exceeding the dollar limit, exceeding your earned income, or contributing when your MAGI turns out to be too high. You can generally avoid the tax by withdrawing the excess and any earnings on it before the filing deadline. Another option is to recharacterize the contribution as a traditional IRA contribution.

How withdrawals work

Roth IRA withdrawals follow an ordering rule. Money comes out in a fixed sequence:

1. Regular contributions first. You can withdraw what you contributed at any time, for any reason, with no tax and no penalty. You already paid tax on it.
2. Conversions next, oldest first. Each conversion has its own five-year clock for penalty purposes.
3. Earnings last. Earnings are the part where the qualified distribution rules apply.

A qualified distribution of earnings is tax-free and penalty-free. It must meet both of these conditions:

• At least five tax years have passed since your first contribution to any Roth IRA.
• You are 59½ or older, disabled, the distribution goes to a beneficiary after your death, or the withdrawal is for a first-time home purchase (up to a $10,000 lifetime limit).

Withdrawals of earnings that are not qualified are taxed as ordinary income. They also face a 10% early withdrawal penalty unless an exception applies. Penalty exceptions include:

• Qualified higher education expenses
• Unreimbursed medical expenses above 7.5% of AGI
• Health insurance premiums while unemployed
• Up to $5,000 for a qualified birth or adoption
• A series of substantially equal periodic payments

These exceptions remove the 10% penalty, not the income tax.

The five-year rule in practice

The five-year clock for contributions starts on January 1 of the tax year for which you made your first Roth IRA contribution. It does not start on the date you made the deposit.

Example of the mechanics: A first-ever contribution made in April 2026 but designated for tax year 2025 starts the clock on January 1, 2025. The five-year period would be satisfied on January 1, 2030.

The clock runs once per person, not once per account. A Roth IRA opened later at a second provider inherits the start date of your first Roth IRA. That is one reason to open a Roth IRA early, even with a small contribution: the clock starts regardless of the balance.

No required minimum distributions

The original owner of a Roth IRA is never required to take distributions. Traditional IRAs require withdrawals beginning in your 70s. A Roth IRA can keep growing untouched for life, which gives it flexibility in retirement income planning and estate planning. Beneficiaries who inherit a Roth IRA are subject to their own distribution rules.

Conversions and the backdoor Roth

You can convert money from a traditional IRA, or from an eligible workplace plan, to a Roth IRA at any income level. The converted pre-tax amount is added to your taxable income for that year. Since 2018, conversions cannot be undone through recharacterization, so a conversion is permanent once made.

Investors whose income exceeds the Roth limits sometimes use a two-step backdoor Roth:

1. Make a nondeductible contribution to a traditional IRA.
2. Convert that money to a Roth IRA.

The catch is the pro-rata rule. When you convert, the IRS looks at all your traditional, SEP and SIMPLE IRA balances as of December 31 of that year. It treats the conversion as coming proportionally from pre-tax and after-tax money.

Hypothetical example: You have $93,000 of pre-tax money in a traditional IRA and add a $7,000 nondeductible contribution. That makes $100,000 total, of which 7% is after-tax. Converting $7,000 would leave roughly 93% of the conversion taxable. The basis is tracked on Form 8606.

Roth or traditional: the tax trade-off

Since the provider does not change the tax treatment, the bigger decision is often whether a Roth is the right account type at all. The core trade-off is simple:

• Roth. You pay tax now and get no deduction, but qualified withdrawals are tax-free.
• Traditional IRA. Contributions may be deductible and earnings are tax-deferred, but withdrawals are taxed as ordinary income at your rate when you take them.

If your tax rate is the same when you contribute and when you withdraw, the two produce the same after-tax result for the same pre-tax dollars.

Hypothetical example: Assume $7,000 of pre-tax income, a 22% tax rate today, and an investment that quadruples by retirement.

• Traditional: $7,000 goes in, grows to $28,000, and is taxed at withdrawal.
  • At 22%, you keep $21,840.
  • At 12%, you keep $24,640.
  • At 32%, you keep $19,040.
• Roth: You pay 22% first, so $5,460 goes in. It grows to $21,840, and that is what you keep, regardless of future tax rates.

The Roth comes out ahead when your future rate is higher than today’s. The traditional IRA comes out ahead when it is lower. The Roth also removes uncertainty about future tax rates.

The limit is nominal. A $7,000 Roth contribution is $7,000 of after-tax money. A $7,000 traditional contribution is $7,000 of pre-tax money, which is worth less once tax is owed. Maxing out a Roth therefore shelters more real value than maxing out a traditional IRA.

A Roth tends to fit these situations:

• You expect your tax bracket to be higher in retirement than it is now. This is common early in a career.
• You want tax-free income in retirement to manage how much of your other income is taxable.
• You want no required minimum distributions.
• You want access to your contributions in an emergency without tax or penalty.

A traditional IRA deduction is worth more when you are in a high bracket now and expect a lower one in retirement.

State taxes also shift the math. Someone who expects to retire in a state that taxes retirement income gains more from tax-free Roth withdrawals than someone retiring in a state on the list of states with no income tax.

Pros and cons of a Roth IRA account

Advantages:

• Tax-free growth and qualified withdrawals. Contributions are made with taxed money, so qualified earnings never get taxed.
• Access to contributions. Your own contributions can come out at any time without tax or penalty.
• No required minimum distributions for the original owner.
• Wide investment choice. Like other retirement accounts, a Roth IRA can hold stocks, mutual funds, ETFs, bonds and more, limited only by what the provider offers.
• Independence from your employer. The account is yours regardless of job changes.

Drawbacks:

• No tax deduction. You get no tax break in the year you contribute.
• Income limits. High earners are phased out of direct contributions and must use conversions instead.
• Low annual limit. The cap is far below workplace plan limits.
• Rules on earnings. Withdrawing earnings early can trigger tax and a 10% penalty, and the five-year rule adds a timing requirement.
• Provider costs. Fees for certain trades, funds or managed portfolios can reduce returns.

Opening and funding a Roth IRA

The account opening process is broadly similar across providers.

1. Confirm eligibility. Make sure you have earned income for the year and estimate your MAGI against the phase-out range.
2. Choose the provider using the criteria above.
3. Open the account and select “Roth IRA” as the account type. A brokerage IRA is a Roth only if it is opened and titled as one. The account documents and statements state the type.
4. Name beneficiaries. A beneficiary designation on an IRA generally controls who inherits it, regardless of what a will says. Keep it updated after marriage, divorce or the birth of a child.
5. Fund the account. You can contribute from a bank account (designate the tax year), transfer from another IRA, or convert from a traditional account.
6. Invest the cash. Contributions often land as cash. Until you buy investments, the money earns only the provider’s cash rate.
7. Set up recurring contributions if you plan to contribute throughout the year rather than in one deposit.

Moving an existing Roth IRA

If you already have a Roth IRA elsewhere, there are two ways to move it.

A direct trustee-to-trustee transfer moves the account between custodians without the money passing through your hands. It is not reported as a distribution, and there is no limit on how many you can do. Between US brokerages, this usually runs through the ACATS system. The receiving firm starts the request. The sending firm may charge a transfer-out fee, and some receiving firms reimburse it.

An indirect (60-day) rollover means you take a distribution and redeposit it within 60 days. You are limited to one IRA-to-IRA rollover of this type in any 12-month period, across all your IRAs. Missing the deadline turns the money into a distribution. A direct transfer avoids both risks.

Transfers can move holdings “in kind” or as cash. Proprietary mutual funds may not transfer in kind to another firm and may need to be sold first. Selling inside an IRA has no tax consequence, but the money will be out of the market briefly.

Multiple Roth IRAs

You can hold as many Roth IRAs as you like, at one provider or several. The annual contribution limit is shared across all of them, and the five-year clock starts with your first Roth IRA.

Some investors keep more than one account for these reasons:

• To separate a hands-off core from an actively traded portion.
• To hold an asset available only at a specific custodian.
• To stay within protection limits at a single firm.

More accounts also means more statements, more beneficiary forms to maintain and more places to check your allocation.

How assets in a Roth IRA are protected

Two different protections can apply, and neither one protects against investment losses.

SIPC covers customers of member brokerages if the firm itself fails and customer assets are missing. Coverage is up to $500,000 per customer per capacity, including up to $250,000 in cash. An IRA is a separate capacity from an individual taxable account at the same firm. SIPC does not cover a decline in the value of your investments.

FDIC insurance applies to deposits at banks. Some brokerages sweep uninvested cash into bank deposits, which may then be FDIC-insured up to applicable limits. A money market fund is different. It is a security, not a bank deposit, and it is not FDIC-insured or guaranteed by any government agency. It is possible to lose money in a money market fund.

What a Roth IRA “interest rate” really means

A Roth IRA does not have an interest rate of its own. It is an account type, and your return depends entirely on what you hold inside it.

A Roth IRA invested in a stock index fund rises and falls with the market. A Roth IRA holding a CD or a Treasury bill earns that instrument’s yield. Uninvested cash earns whatever the provider pays on its sweep or money market option. That rate varies widely between providers, which is why the cash rate is a real comparison point.

For a long-term retirement account, the more relevant number is the real return after inflation. Money that sits in cash for decades may keep its nominal value while losing purchasing power.

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