4 Best 401(k) Companies: Low Fees and Many Investment Options

Find the best 401(k) provider for you and your employees.
4 Best 401(k) Companies: Low Fees and Many Investment Options

If you’re an employer, choosing a 401(k) plan might seem complicated, but having one could be a big advantage for your business. To help you find the right option for you and your employees, GOBankingRates determined the Best 401(k) Companies as part of its second annual Best Brokers rankings. Simplify the process by selecting one of the following 401(k) companies; then choose a plan with the features you want, and automate it from the beginning to make administering the plan easier.

Best 401(k) Companies of 2019-2020 Guide:

Best 401(k) Companies at a Glance

From the employer’s perspective, a 401(k) plan should be cost-effective and easy to administer. From the employee’s perspective, it should be easy to understand and include access to advice on investments and other financial subjects. Take a look at the following 401(k) providers to see which one has the offerings best suited to your business and your employees:

Best 401(k) Companies of 2019-2020

401(k) ProviderEmployer FeesInvestment OptionsOther Fees
charles schwab logoCharles Schwab$0 opening fee, $0 maintenance feeMutual funds and exchange-traded funds
  • No account minimums
  • Other fees vary based on the company’s needs and solutions
T. Rowe PriceT. Rowe PriceEmployers with up to $1 million in assets pay $250 setup fee, $700 annual record-keeping fee, annual fee of $15 per participantMutual funds
  • No account service fee for those who select paperless delivery of statements and confirmations
  • Other fees depend on service structure and economics of the plan
Employee Fiduciary$500 startup fee; $1,500 annual fee for up to 30 employees, $30 per year for each additional employeeMutual funds and ETFs
  • Asset-based fee of 0.08% per year
Merrill Edge$390 setup fee, plus $90 per monthMutual funds
  • $4 monthly record-keeping fee
  • 0.52% annual asset-based fee

Learn More: What Is a Brokerage Account?

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In-Depth Look at the Best 401(k) Companies

Although the benefits of a 401(k) are universal, some plans are more advantageous to employers and employees than others. For example, a 401(k) plan might have no annual fees, but if it doesn’t offer robust customer service, then you and your employees could be left searching for answers with no help in sight. So it’s important to find a provider with 401(k) plans that balance fees with service and convenience.

Keep reading to see what the following providers have to offer.

Charles Schwab: Best for Low Fees

Charles Schwab offers plans with low-cost funds, optional professional advice and no opening or maintenance fees.

charles schwab logoPlan participants who have a managed account get a customized saving and investment strategy and automatic adjustments to make the most of their employee contributions and company matches.

Employers will enjoy the lack of setup fees and annual fees. For participants, there’s no account minimum, but there are plenty of options, including mutual funds, ETFs, managed accounts and self-directed brokerage accounts.

Pros:

  • A lot of options, whether you’re concerned about costs or want a high level of service
  • Investing and financial planning advice from outside advisors
  • Managed accounts with the potential for higher returns than with self-directed accounts

Cons:

  • Some choices might be unnecessarily complex for some companies

To learn more about Charles Schwab, visit its website.

Explore: What Is a Money Market Mutual Fund?

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T. Rowe Price

T. Rowe Price offers a wide variety of plans catering to the needs of companies large and small.

T. Rowe PriceAlthough employers with up to $1 million in assets pay a $700 annual fee for record-keeping, plus $15 per participant per year, this is still a solid choice. Employees can invest with no fees if they choose a paperless option.

And when you or your employees have questions about your plan, you can find help from the wealth of information T. Rowe Price makes available online.

Pros:

  • A variety of plan options, including a solo 401(k) for self-employed people
  • Many investment options, including non-T. Rowe Price funds
  • No participant fees for those who sign up for paperless delivery of statements and confirmations
  • 24/7 account access via an automated phone service for plan participants
  • Target date funds that change the participant’s allocation as they get closer to retirement

Cons:

  • No option for professional investment advice on a one-on-one basis
  • Costs vary by plan economics

To learn more about T. Rowe Price, visit its website.

See: Types of 401(k) Plans — Which One Is Right for You?

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Employee Fiduciary

Employee Fiduciary hangs its hat on its low fees, so you’d be wise to compare its costs to those of any other plan you’re considering. Employers pay a $500 startup fee, a $1,500 annual fee and a 0.08% asset-based custody fee, but there are many variables, so use your actual numbers to determine the best deal for your company.

The company offers a self-directed brokerage option, which means the participant can choose any investments available from TD Ameritrade for their portfolio.

In fact, investment options are vast across the board, with a choice of Vanguard mutual funds, index funds and ETFs.

Pros:

  • Custody fees are the lowest of any firm on the list and are not dependent on the value of your plan
  • Lots of low-cost investment options, including mutual funds, ETFs, index funds and stocks
  • 377 fund families to choose from

Cons:

  • No available investment advice
  • Higher establishment fee for employers with an existing plan: $1,000 for existing plans versus $500 for new plans

To learn more about Employee Fiduciary, visit its website.

Related: What Are the Best 401(k) Funds?

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Merrill Edge

Merrill Edge offers numerous 401(k) and solo 401(k) options for businesses. You can start a plan from scratch, or you can move an existing plan from another custodian.

Watch the fees, though — between the 0.52% asset-based fee and the $4 monthly record-keeping fee, a plan participant with a $10,000 account would pay $100 every year.

Employer fees include $390 for setup, plus $90 per month — the latter of which comes out to $1,080 annually.

Pros:

  • Support from Plan Administrators Inc. is available for plan sponsors and participants
  • Online educational resources on investing
  • Fee-based access to local financial advisors
  • Better rates for participants who link a Bank of America account

Cons:

  • The 0.52% asset-based fee is high compared to other providers

To learn more about Merrill Edge, visit its website.

Consider: 401(k) vs. Roth 401(k) — Which Is Better for Your Retirement Plan?

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How We Picked the Best 401(k) Companies

GOBankingRates determined the Best 401(k) Companies by analyzing eight major providers of 401(k) services, using the following criteria:

  • Employer fees
  • Number of different investment vehicles available, with two — ETFs and mutual funds — generally being the maximum available
  • 24/7 phone customer service
  • Educational resources, such as courses or articles on investing, trading or how your 401(k) works; webinars; blogs; etc.
  • Research and tools, such as multiple trading platforms, in-depth market analysis, screener tools for stocks, ETFs, bonds, etc.

Each 401(k) company was scored based on these individual categories, which were then summed up for a final score. One category, 24/7 phone customer service, was weighted half while all other categories were weighted in full for final scoring.

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More Best Brokers of 2019-2020

Karen Doyle is a Boston-based writer specializing in personal finance. She worked as a financial advisor, with Series 7 and 63 licenses, for several years.

Andrew DePietro contributed to the reporting for this article. He was the lead researcher for GOBankingRates and a finance writer with years of experience covering investing, taxation, Social Security, entrepreneurship, real estate and housing markets.

Erika Giovanetti is a writer with experience covering a multitude of subjects, from personal finance to politics to the great outdoors. 

Methodology: To determine the Best Brokers of 2019-2020, GOBankingRates analyzed 47 active U.S. brokerages and investment companies across eight categories: (1) Best Online Brokerages, (2) Best Online Stockbrokers for Beginners, (3) Best Robo-Advisors, (4) Best Investment Apps, (5) Best IRA Providers, (6) Best Roth IRA Providers, (7) Best Brokers for Day Traders, (8) Best 401(k) Companies.

Data for Best Brokers was compiled from and verified against the individual institutions’ websites between July 1, 2019, and Aug. 2, 2019. That data has been updated as of Dec. 9, 2019, but the rankings are based on the original data. 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 any benefits mentioned. Availability might vary by region, minimum investment amounts and other factors. Please verify the terms and conditions before opening an account.

GOBankingRates is a personal finance website owned by ConsumerTrack Inc., an online marketing company serving top-tier banks, credit unions and other financial services organizations. Some brokerages mentioned in Best Brokers 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. For more information, see the complete methodology for the rankings.

About the Author

Karen Doyle is a personal finance writer with over 20 years’ experience writing about investments, money management and financial planning. Her work has appeared on numerous news and finance
websites including GOBankingRates, Yahoo! Finance, MSN, USA Today, CNBC, Equifax.com, and more.