Yes, Robinhood offers Roth IRA accounts alongside traditional IRAs and SEP IRAs
Robinhood lets you open a Roth IRA through its platform. You can fund it, invest the money in stocks, ETFs, options, and crypto, and manage it all from the same app you use for a regular taxable brokerage account. The account itself is held at Robinhood Financial LLC, which is registered with the SEC and FINRA.
A Roth IRA is a retirement account where you contribute money that has already been taxed. The money grows tax-free, and when you withdraw it in retirement — after age 59½ — you pay no taxes on those gains. This is different from a traditional IRA, where contributions may be tax-deductible now but withdrawals are taxed later.
Robinhood does not charge a monthly or annual fee to hold a Roth IRA. You only pay commissions or spreads when you buy or sell investments inside the account, the same way you would in any other Robinhood account.
Key Takeaways
- Robinhood Roth IRAs let you invest in stocks, ETFs, options, and crypto with tax-free growth on gains.
- You can only contribute money you have already paid income tax on, and contribution limits are set by the IRS each year.
- Withdrawals of your contributions (not gains) can be taken out at any time without penalty, but gains withdrawn before age 59½ are taxed and penalized.
- Robinhood charges no account fee, but you pay normal trading costs when you buy or sell inside the account.
How to open a Roth IRA on Robinhood
Open the Robinhood app or website and tap or click the Account menu. Select "Open an account" or "Add account" and choose Roth IRA from the list of account types. You will be asked to confirm your personal information, Social Security number, and employment status. Robinhood will verify this information with the IRS and your bank.
Once your account is approved, you can link a bank account and transfer money in. You can also set up automatic recurring transfers if you want to contribute a fixed amount each month. After the money lands in your Roth IRA, you can buy investments the same way you would in a regular Robinhood account.
The whole process usually takes a few minutes to a few hours, depending on how long verification takes. You do not need to have an existing Robinhood account to open a Roth IRA — you can start with the IRA alone.
Contribution limits and IRS rules
The IRS sets a yearly limit on how much you can put into a Roth IRA. This limit changes most years. For the 2024 tax year, the limit is $7,000 if you are under age 50, and $8,000 if you are 50 or older (the extra $1,000 is called a "catch-up" contribution). Robinhood will not let you contribute more than this amount in a single year.
You can only contribute money you earned from work — W-2 wages, self-employment income, or other earned income. You cannot fund a Roth IRA with investment gains, inheritance, or gifts (though a spouse can fund a spousal Roth IRA if they have earned income). Robinhood does not verify your income, but the IRS can audit you later if you over-contribute.
There is also an income limit set by the IRS. If your modified adjusted gross income is above a certain threshold, you cannot contribute the full amount or may not be able to contribute at all. This threshold depends on your filing status and changes yearly. Robinhood does not enforce this limit at the time you contribute, so you are responsible for knowing whether you are within the limit.
What you can invest in inside a Robinhood Roth IRA
Robinhood lets you buy stocks, ETFs, options, and cryptocurrencies inside your Roth IRA. You can hold individual company stocks, index funds, bond ETFs, or a mix of all three. You can also sell and trade within the account as often as you want — there is no limit on how many times you buy and sell per year, unlike some other account types.
You cannot hold certain things in a Roth IRA, even at Robinhood. You cannot buy penny stocks (stocks under $5), mutual funds, or commodities like gold or oil. You also cannot use margin (borrowed money) to buy investments in a Roth IRA. These are IRS rules, not Robinhood rules, so they explore at any brokerage.
Robinhood does not offer fractional shares in Roth IRAs, so you must buy whole shares of stocks. You can buy fractional shares of ETFs, which makes it easier to invest small amounts of money.
How withdrawals work in a Roth IRA
A Roth IRA has two types of money inside it: contributions (the money you put in) and earnings (the gains from investing). You can withdraw your contributions at any time, for any reason, without paying taxes or penalties. This is one of the biggest advantages of a Roth IRA — your own money is always accessible.
Earnings are different. If you withdraw earnings before age 59½, you will owe income tax on them plus a 10% penalty, unless you meet a narrow exception (like a first-time home purchase up to $10,000, or a disability). The account must also have been open for at least five years for you to withdraw earnings tax-free, even after age 59½.
To withdraw money from your Robinhood Roth IRA, go to the Account menu, select your Roth IRA, and choose "Withdraw." You can transfer money back to your linked bank account. Robinhood processes most withdrawals within one to three business days. If you withdraw before age 59½, Robinhood will not automatically withhold taxes — you are responsible for reporting the withdrawal and any taxes owed when you file your tax return.
Robinhood Roth IRA versus other account types at Robinhood
Robinhood offers three retirement account types: a Roth IRA, a traditional IRA, and a SEP IRA (for self-employed people). The main difference is when you pay taxes. In a traditional IRA, contributions may be tax-deductible now, but you pay taxes on withdrawals later. In a Roth IRA, you pay taxes now, but withdrawals are tax-free later. A SEP IRA is for people with self-employment income and allows much higher contributions.
Robinhood also offers a regular taxable brokerage account, which has no contribution limits and no withdrawal restrictions, but you pay taxes on gains every year. Many people use both a Roth IRA and a taxable account — the IRA for long-term retirement savings and the taxable account for money they might need sooner.
| Account Type | Tax on Contributions | Tax on Withdrawals | Annual Limit (2024) |
|---|---|---|---|
| Roth IRA | Already taxed | None (if rules met) | $7,000 (under 50) |
| Traditional IRA | May be deductible | Taxed as income | $7,000 (under 50) |
| SEP IRA | Deductible | Taxed as income | Up to 25% of income |
| Taxable Brokerage | No deduction | Taxed on gains | None |
Frequently Asked Questions
Can I move money from another brokerage into my Robinhood Roth IRA?
Yes. This is called a rollover or transfer. Contact your old brokerage and ask them to transfer your Roth IRA to Robinhood. Robinhood can also help walk you through the process. The transfer usually takes one to two weeks and does not count as a withdrawal, so you do not owe taxes or penalties. You can only roll over a Roth IRA to another Roth IRA — you cannot roll it into a traditional IRA without triggering taxes.
What happens to my Roth IRA if I stop using Robinhood?
Your account stays open and your investments keep growing. You can leave the money there indefinitely, or you can transfer it to another brokerage at any time. Robinhood does not close inactive accounts or charge fees for holding a Roth IRA, so there is no penalty for leaving it alone.
Can I have more than one Roth IRA?
Yes, but your total contributions across all Roth IRAs cannot exceed the IRS limit for the year. If you have a Roth IRA at Robinhood and another at a different brokerage, your combined contributions cannot be more than $7,000 (or $8,000 if you are 50 or older). You are responsible for tracking this across all your accounts.
Do I pay taxes on dividends or capital gains inside my Roth IRA?
No. All dividends, interest, and capital gains grow tax-free inside a Roth IRA. You only pay taxes if you withdraw earnings before age 59½ and do not meet an exception. This tax-free growth is the main reason people use Roth IRAs for long-term investing.
What if I contribute too much to my Roth IRA by mistake?
You can withdraw the excess contribution and any earnings on it before your tax filing important date (usually April 15 of the following year). If you do this, you will not owe a penalty on the excess, though you will owe taxes on the earnings. If you do not withdraw the excess, you will owe a 6% penalty each year the excess sits in the account. Contact Robinhood or a tax professional if this happens.