How do I go about opening up a Roth IRA?

By Denise Appleby AAA
A:

You may open Roth IRAs at most financial institutions, such as your local bank, your credit union, or brokerage firm. You can even establish an IRA online. The process is as easy as completing a one-page document. Most financial institutions may also require that you complete a new account or customer application in addition to the Roth IRA adoption agreement.

Before you choose a financial institution, you want to compare features and benefits. For instance, one institution may charge $30 annually for administrative fees, while another may charge $50. Although this amount may seem small, it can be significant when compared to your account balance. For instance, if you decide to contribute $1,000 to your Roth IRA for the year and the annual fee is $50, this would be 5% of your balance.

You should also consider accessibility of funds. It may be easier to access your assets at your local bank than at an online financial institution. On the other hand, online financial institutions charge lower fees in most instances.

Another important thing to consider is the type of investment you would prefer. For instance, would you like to invest in a certificate of deposit, money market fund or mutual fund? Financial institutions should be able to explain the options they have available, including the features and any applicable fees.

This question was answered by Denise Appleby
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