How to Open a Roth IRA

Decide which brokerage to use

Decisions, decisions

As you've probably realized, there are several great options out there and you are more than welcome to use whichever brokerage you’d like. There are just a few main criteria that we recommend you look for:

• That the brokerage offers low-cost index funds
• That the minimum investment matches your budget
• That there aren’t any maintenance fees or balance requirements

Why choose Vanguard?

We personally like to use Vanguard because the firm is investor-owned and does not aim to generate profit for private stakeholders or stock owners. Instead, the profits allow the company to continue offering low-cost investment options.

Other brokerage options

You could also select Fidelity, Schwab or another institution that fits your needs better. In the spirit of transparency, we believe that Vanguard’s mobile interface has room for improvement compared to the competition, but this shouldn’t matter for long-term investors.

Open your account

See the image carousel below for screenshots of each major step. Note that your specific financial institution may present these steps in a slightly different order.

Open a Roth IRA, step-by-step

For the sake of example, we’ll use Vanguard. Navigate to Vanguard.com and click the “Personal investors” link.
In the top right corner, click “Open an account”. Follow the steps to sign up.
When prompted to select an account type, choose “Retirement investing” and then the “Roth IRA” account type.
Fill out all personal identifying information as necessary.
Create your username and password.
Link your bank and provide initial funds.
Disclose how you earn money for investing.
Select a purpose – this doesn’t matter too much so choose whichever option sounds best to you.
Review your information and sign the electronic agreement.

Congrats on your new account

What to do after opening a Roth IRA

Believe it or not, the hardest part is behind you. Once your funds have transferred over from your bank account, you’re ready to invest your money in index funds.