One of the most important tools employers have in attracting and retaining top-quality talent is their 401k plan, which gives your employees the opportunity to set up routine, pre-tax deposits right from their paycheck to help them build a healthy nest egg for retirement. What’s more, given that the government incentives saving, you can harness a number of tax advantages by setting up a 401k plan and offering matching contributions to employees.
However, not all 401k providers are created equal and many come with unnecessary fees and limited investment options. So, in your search for the best 401k companies, look for a provider with the right combination of low 401k fees, plenty of investment options and robust customer service — all while keeping your costs low.
Fortunately for you, the GOBankingRates Best Brokers rankings have examined all of the options to determine the best 401k providers. These companies offer the best retirement plans without charging excessive fees while providing helpful customer service.
Here are the five best 401k companies that are among the Best Brokers for your money:
- T. Rowe Price
- Sharebuilder 401k
- Employee Fiduciary
- Charles Schwab
The Best 401k Providers
Here’s an overview of the best 401k providers out there, according to the Best Brokers ranking:
|The Best 401k Companies|
|Broker||Employer Fees||Investment Options||Other Fees|
|T. Rowe Price||No annual employer fees; No set-up costs||Plan sponsors might select from over 100 no-load mutual funds and common trusts and over 5,400 nonproprietary funds in addition to a self-directed brokerage option||No participant fees with paperless delivery; Other fees vary depending on service structure and plan economics|
|Sharebuilder 401k||$495 setup cost; $95/month||ETFs||Participant fee: 0.75% asset management fee; $60 to $75 per distribution/withdrawal; $125 to $150 per loan taken out|
|Employee Fiduciary||$1,500 annual fee; New (Start-Up) Plans: $500||Mutual funds||Plans with > 30 eligible employees: $1,500 per year + $30 per year for each additional eligible employee; Asset-based fee of 0.08% per year|
|Ubiquity||$115/month; $495 one-time setup fee||Mutual funds, managed accounts, annuities and employer stock||Withdrawal: $95 per occurrence; Borrow from your plan: $100 annual fee; Participant fee: $5 per month|
|Charles Schwab||$0 opening fee; $0 maintenance fee||Mutual funds and ETFs||No account minimums|
|Information accurate as of Aug. 22, 2018.|
T. Rowe Price
One might look at the lack of employer fees and set-up costs and start to wonder where T. Rowe Price is making their money, but it’s important to note that they’re primarily a mutual fund company. That means that offering low- or no-cost 401k services can help them guide more investors towards their mutual funds. If you think the slate of options — which do include non-T. Rowe Price funds — are right for your workers, you should certainly take advantage of this.
T. Rowe Price has the most impressive and affordable offerings of all 401k companies analyzed by GOBankingRates, making it the best 401k company out there.
Where T. Rowe Price Shines
- No annual employer fees
- No set-up costs
- Access to 100 no-load mutual funds and over 5,400 nonproprietary funds in addition to a self-directed brokerage option
Where T. Rowe Price Falls Short
- No 24/7 customer service
Read: The Best Roth IRAs
Sharebuilder 401k focuses on offering ETFs and mutual funds that greatly reduce the fees associated with actively-managed mutual funds, making it a great option if your employees are most interested in low-fee passive investing. However, it has a 0.75 percent asset management fee that could offset those benefits, so be sure to compare the fees to other options.
Where Sharebuilder 401k Shines
- Offers a variety of low-cost index funds and ETFs
- $95/month plan fee
Where Sharebuilder 401k Falls Short
- 0.75 percent asset management fee for participants
- No 24/7 customer service
Click to see a ranking of the best IRA accounts.
Employee Fiduciary boasts investment options that include every NSCC-tradable mutual fund, and the asset-based annual fee of 0.08 percent is certainly competitive. However, the high annual fees for employers could add up and don’t get you out of the $500 set-up fee at the start.
Where Employee Fiduciary Shines
- o.o8 percent asset-based fee
- A wide variety of mutual funds to choose from
Where Employee Fiduciary Falls Short
- $1,500 annual fee
- Additional $30 a year for each employee in excess of 30 employees
Read This: The Best Robo-Advisors for Your Investments
The costs for employers with Ubiquity can add up, but it’s worth noting that structuring participant fees as a flat $5 monthly can represent a much lower cost over time for larger accounts than some of the fees charged as a percentage of assets. That’s a double-edged sword, though, as it also means that accounts with low balances will get hit especially hard in terms of a percentage of total assets.
Where Ubiquity Shines
- Wide variety of investment options
- $5/month participant fee
Where Ubiquity Falls Short
- No research/education center or tools
- $115/month employer fee
Click to see the best features to look for when choosing a broker.
Like T. Rowe Price, Charles Schwab would appear to be willing to forego charging the fees associated with other 401k companies in an effort to attract more investors it the mutual fund products it offers. If you and your workers like Charles Schwab mutual funds, this could be the ideal combination of low costs and good variety.
Where Charles Schwab Shines
- No opening fee
- No maintenance fee
- No account minimums
- 24/7 customer service
Where Charles Schwab Falls Short
- Basic research/education center
Click to see the best online stock brokers for beginners.
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Methodology: To determine its Best 401k Companies category ranking, GOBankingRates examined the top brokerages, excluding non-active institutions.
Criteria for ranking: GOBankingRates scored the brokerages from most to least favorable on the following factors: (1) employer fees, (2) investment options available, (3) other fees, which includes employee/participant fees, distribution or withdrawal fees, asset management fees and (4) customer experience, which includes educational resources, access to quality online tools, and 24/7 customer service. Brokerages were then ranked according to their total score.
Data for Best Brokers was compiled from and verified against the individual institutions’ websites between June 13 and August 1, 2018. Costs, terms and conditions are subject to change at the discretion of the individual financial institutions. Some information might reflect short-term or promotional offers only, and it is possible additional terms and conditions must be met in order to obtain the terms listed. Availability might vary by region, minimum investment amounts and other factors. Please verify terms and conditions before opening an account.
GOBankingRates is a personal finance and consumer interest rate website owned by ConsumerTrack, Inc., an online marketing company serving top-tier banks, credit unions, and other financial services organizations. Some brokerages mentioned in the Best Brokers rankings are clients of ConsumerTrack, Inc., which serves more than 100 national, local and online financial institutions. Rankings are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement.