Best Solo 401(k) Providers 2026: Fidelity vs Schwab vs E*TRADE vs Custom Plans

Three major brokerages offer free solo 401(k) plans with no setup or annual fees: Fidelity, Schwab, and E*TRADE. They differ in exactly one meaningful way — only E*TRADE supports participant loans in its standard plan. Mega backdoor Roth requires a custom third-party plan regardless of custodian. Here's how to pick the right one for your situation.

Provider comparison at a glance

Mega backdoor Roth = after-tax contributions to the solo 401(k) with in-service conversion to Roth, enabling contributions beyond the $24,500 deferral up to the $72,000 total limit.

Fidelity Self-Employed 401(k)

Fidelity's self-employed 401(k) is the largest-provider option and the one most commonly recommended in financial planning circles. It has no setup or annual maintenance fees, supports traditional and Roth deferrals (updated in 2026 to reflect SECURE 2.0 catch-up mandate compliance), and gives you access to Fidelity's full investment lineup — including individual stocks, bonds, ETFs, and thousands of mutual funds with no transaction fees on Fidelity index funds.²

Where it falls short: Fidelity's prototype plan documents do not support participant loans or after-tax contributions (the building block of mega backdoor Roth). If you want those features, you need a custom plan document from a third-party provider — but you can still hold the assets at Fidelity brokerage, which many advisors recommend for its execution quality and zero-cost index funds.

Best for: Long-term index-fund investors who want Roth, don't need a loan, and want to keep costs at absolute zero.

Charles Schwab Individual 401(k)

Schwab's individual 401(k) is functionally similar to Fidelity's — no fees, Roth support, and a broad investment lineup. A useful differentiator: Schwab's plan allows you to hold Vanguard mutual funds inside the account, which matters if you have existing Vanguard positions or prefer their specific fund lineup. Schwab also supports in-plan Roth rollover conversions within the account (moving pre-tax money to a Roth account held inside the same plan) — a feature Fidelity's prototype plan does not offer.³

Where it falls short: Like Fidelity, Schwab's standard individual 401(k) does not support participant loans. Borrowing against the plan requires using a third-party plan document provider — though the brokerage account can remain at Schwab.

Best for: Schwab investors, existing Vanguard fund holders, or those who want in-plan Roth conversion capability without a custom plan.

E*TRADE Individual 401(k)

E*TRADE (now a subsidiary of Morgan Stanley, though the account structure remains separate) holds a unique position in the free-provider market: it is the only major brokerage whose prototype solo 401(k) supports participant loans. If you want the ability to borrow against your retirement plan — up to 50% of the vested balance, capped at $50,000 per participant, repaid over 5 years at prime + 1% — E*TRADE is the only free option.⁴

E*TRADE also supports both Roth and traditional deferrals, and the investment lineup covers stocks, ETFs, and mutual funds with $0 commissions on US-listed securities.

Where it falls short: Like all prototype plans, E*TRADE does not natively support mega backdoor Roth. You can "upgrade" your E*TRADE account to use a custom third-party plan document, but this adds cost and complexity.

Best for: Self-employed owners who want a loan option in reserve — a business owner who might need emergency access to retirement funds, or who wants the flexibility to borrow for a business opportunity, without paying for a custom plan.

Ascensus (formerly Vanguard)

Vanguard exited the solo 401(k) business and transferred all accounts to Ascensus, a retirement plan administrator. The "Vanguard solo 401(k)" you may have read about no longer exists in its original form. Under Ascensus, the plan carries an annual fee of $20 plus $20 per fund per year (five funds = $120/year), and investments are restricted to Vanguard mutual funds — not even Vanguard ETFs, which trade at lower costs. There are no loan provisions.³

If you have an existing Vanguard solo 401(k) that transferred to Ascensus, you should run the math on whether the fee drag and fund restrictions are worth staying vs. rolling to Fidelity or Schwab.

Verdict: Not recommended for new accounts in 2026. The fees buy you nothing that Fidelity or Schwab don't provide for free.

Custom plan providers: when you need more

All prototype plans (Fidelity, Schwab, E*TRADE) share one hard ceiling: they don't support mega backdoor Roth contributions. This strategy — making after-tax contributions above the $24,500 deferral up to the $72,000 total limit, then converting those after-tax contributions to Roth in-plan — can add up to $47,500 in Roth-eligible savings annually for high-income owners. It requires plan documents that explicitly allow after-tax contributions and in-service distributions or in-plan conversions.

MySolo401k Financial

The most widely cited custom plan provider. They draft IRS-approved plan documents that explicitly authorize after-tax contributions, in-plan Roth conversions, participant loans, and alternative investments (real estate, private equity, cryptocurrency). The plan assets are held at your choice of Fidelity, Schwab, or E*TRADE. One-time setup fee approximately $525, annual maintenance fee approximately $125.⁵

This setup is particularly popular with S-corp owners earning $200K–$500K who want to combine a large Roth conversion with ongoing mega backdoor contributions. The math: at $300K income, a 25% employer contribution fills $75,000... no, the employer contribution is capped at 25% of W-2 salary up to the $72K limit. The value of mega backdoor is using the gap between your deferral + employer match and the $72,000 ceiling as after-tax Roth contributions.

Carry

A newer digital-first provider that automates the mega backdoor Roth workflow, charges $199–$299 per year (no setup fee), and uses DriveWealth as the brokerage backbone. Better user experience than MySolo401k for those who prioritize automation. Investment options are ETF-only through DriveWealth — narrower than holding the assets at Fidelity or Schwab.

Which provider should you choose?

• Need the absolute lowest cost and don't need loans or mega backdoor Roth? Choose Fidelity or Schwab. Both are free, both have Roth, both have excellent investment options. The difference is minor — Schwab if you hold Vanguard funds, Fidelity otherwise.
• Want the option to borrow against your plan without a custom document? E*TRADE is the only free prototype that allows this.
• Want to use mega backdoor Roth? You need a custom plan. MySolo401k holds the plan at Fidelity or Schwab so you get the best of both — custom plan documents with zero-cost brokerage. Annual cost ~$125 after setup. Carry is easier to use if ETF-only investments are fine.
• Want alternative investments (real estate, crypto, private equity) inside your solo 401(k)? MySolo401k or a specialist self-directed IRA custodian. E*TRADE, Fidelity, and Schwab don't support these.
• Currently have a Vanguard solo 401(k) now managed by Ascensus? Consider rolling to Fidelity or Schwab to eliminate fees and gain investment flexibility.

Important setup timing rules for 2026

The plan must be established by the business tax return due date (including extensions) if you want to make retroactive contributions for the prior year. However, for the employee deferral election — your personal contribution — the deadline is December 31 of the plan year for which you're electing.¹ This is different from a SEP IRA, which allows all contributions until the filing deadline. If you're setting up a solo 401(k) now in 2026, you can still make employer profit-sharing contributions for 2025 (before your 2025 return is filed), but the 2025 employee deferral window closed December 31, 2025.

For new plans opened in 2026: deferral elections for the 2026 plan year must be made by December 31, 2026.