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 does a forward contract differ from a call option?

    Find out more about forward contracts, call options, the mechanics of these financial instruments and the difference between ...
  3. Does my employer's matching contribution count towards the maximum I can contribute ...

    Maximize 401(k) contributions on your own without fear; employer contributions are separate and do not hinder you contributing ...
  4. What are the main risks associated with trading derivatives?

    Understand derivatives trading and learn about the primary risks usually associated with trading in the derivatives market, ...
RELATED TERMS
  1. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  2. Qualified Longevity Annuity Contract

    A Qualified Longevity Annuity Contract (QLAC) is a deferred annuity ...
  3. Strike Width

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

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

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

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

You May Also Like

Related Articles
  1. Retirement

    Where can I open a Roth IRA?

  2. Investing Basics

    How To Create Capital Protected Investment ...

  3. Options & Futures

    How does a forward contract differ from ...

  4. Options & Futures

    Tesla Stock Too Expensive? Trade Tesla ...

  5. Options & Futures

    Stock Options To Trade On Intraday Momentum ...

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!