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. I have conservative views on investing. How should I go about investing in a Roth ...

    Most financial services institutions - such as banks, brokerage firms, credit unions and mutual fund companies - offer Roth ... Read Answer >>
Related Articles
  1. Retirement

    How a Roth IRA Works After Retirement

    What retirees need to know about taxes, distributions and passing on your unspent savings to the next generation.
  2. Retirement

    Roth 401(k) Vs. Roth IRA: Which One Is Better?

    It all depends on your age, your income - and your plans for your retirement nest egg.
  3. Retirement

    Don't Make These Top 10 Mistakes On Your Roth IRA

    Don't lose out on the benefits of a Roth by contributing too much, breaking rollover rules or making other avoidable errors.
  4. Retirement

    Funding Your IRA vs. Your Roth IRA, Which First?

    The answer depends on where you are in your career and personal life each year. Here are some scenarios and rules to think about.
  5. Retirement

    Tips For Finding The Right IRA

    There are many IRA options available that vary depending on what you want to do with your retirement savings.
  6. Retirement

    Roth IRA Contribution Limits in 2016

    Discover the benefits of Roth IRA accounts and how much you can contribute for your retirement. Learn which IRA plan is best for you.
  7. Investing

    IRAs vs. 401(k)s: Differences Between Roth and Traditional

    For each type of account, whether IRA or 401(k), you also need to decide whether you need a Roth or traditional version. Your tax status and other issues will determine which of these are open ...
  8. Retirement

    6 Reasons Not to Recharacterize Your Roth IRA

    If you're thinking of recharacterizing your Roth IRA into a traditional IRA account, here are six compelling reasons why you should reconsider.
  9. Retirement

    5 Reasons to Convert a Roth To a Traditional IRA

    Here's a quintet of cases when the traditional IRA trumps the Roth version.
RELATED TERMS
  1. Roth IRA

    A Roth IRA is an individual retirement plan that bears many similarities ...
  2. Roth IRA Conversion

    A reportable movement of assets from a Traditional, SEP or SIMPLE ...
  3. Ordering Rules

    The order in which Roth IRA assets are distributed. Assets are ...
  4. Individual Retirement Account - IRA

    An investing tool used by individuals to earn and earmark funds ...
  5. Backdoor Roth IRA

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

    Distributions made from a Roth IRA that are tax and penalty free. ...
Hot Definitions
  1. Redlining

    The unethical practice whereby financial institutions make it extremely difficult or impossible for residents of poor inner-city ...
  2. Nonfarm Payroll

    A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number ...
  3. Conflict Theory

    A theory propounded by Karl Marx that claims society is in a state of perpetual conflict due to competition for limited resources. ...
  4. Inflation-Linked Savings Bonds (I Bonds)

    U.S. government-issued debt securities similar to regular savings bonds, except they offer an investor inflationary protection, ...
  5. Peak Globalization

    Peak globalization is a theoretical point at which the trend towards more integrated world economies reverses or halts.
  6. Phishing

    A method of identity theft carried out through the creation of a website that seems to represent a legitimate company. The ...
Trading Center