Opening an Account

If you can, choose an online broker

Now that you’ve decided to open a Roth IRA, you’d probably like to know how to open one. The mechanics of opening an account are fairly simple, but first you need to decide where you want to park your money. That takes a bit more work, but if you follow a few principles, you’ll be investing–wisely–in no time.

Go online

It’s difficult these days to find a bank, discount broker or mutual fund company that doesn’t offer the option to open and access a Roth IRA account online. If you have access to a computer and a basic level of Internet skill, this is unquestionably the way to go. If you don’t, you’ll need to head to your local bank branch or brokerage firm and sign up in person (how decidedly 20th-century of you). >

Given the many advantages—in time, convenience and fees—of working with online banks and brokerages, we’ll focus on that approach. The number of institutions offering online access is far too big to list, but you likely already know the names of some of the bigger names: brokerage firms such as Schwab and TD Ameritrade, mutual funds such as Fidelity and Vanguard; and banks such as Bank of America and ING Direct. If one of the big firms isn’t in your town, your local bank most likely offers retirement accounts. Given their size, however, their online offerings may be more limited and their fees may be higher.

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