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
(
Contact Denise)

RELATED FAQS

  1. Where can I open a Roth IRA?

    Discover how to open a Roth IRA account including reviewing provider options, choosing investments, and learning the guidelines ...
  2. How much will an employer generally contribute to a 401(a) plan?

    Find out how much employers may contribute to an employee's 401(a) retirement plan and why this amount can vary so widely ...
  3. What is the difference between derivatives and options?

    Learn how options are one type of derivative and how equity options derive their value from a stock, and understand other ...
  4. How are rights distributed in a rights offering?

    Learn about stock rights offerings that companies may make, and discover how the rights are distributed among the company's ...
RELATED TERMS
  1. Strike Width

    The difference between the strike price of an option and the ...
  2. Inverse Transaction

    A transaction that can cancel out a forward contract that has ...
  3. Reference Equity

    The underlying equity that an investor is seeking price movement ...
  4. See-Through Trust

    A trust that is treated as the beneficiary of an individual retirement ...
  5. Boundary Conditions

    The maximum and minimum values used to indicate where the price ...
  6. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...

You May Also Like

Related Articles
  1. Retirement

    Where can I open a Roth IRA?

  2. Retirement

    Does it Make Sense to Have an MLP in ...

  3. Mutual Funds & ETFs

    4 Ways You Can Invest In Gold Without ...

  4. Active Trading Fundamentals

    How To Short Amazon Stock

  5. Retirement

    Top Tips for Rebalancing 401(k) Assets

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!