You can open a Roth IRA at almost any bank, credit union, or investment firm
A Roth IRA is a retirement savings account you can open at hundreds of different places. The account itself works the same way no matter where you open it — the difference is in fees, investment choices, and how straightforward the company makes it to manage your money. You are not locked into one place forever; you can move your account later if you find a better fit.
The most common places to open a Roth IRA are online brokerages (companies that let you buy and sell investments), traditional banks, credit unions, and robo-advisors (automated investment services). Each type has different strengths depending on whether you want to pick individual stocks, keep things straightforward, or prefer working with a person face-to-face.
Key Takeaways
- Online brokerages like Fidelity, Schwab, and Vanguard have low or no account minimums and let you choose from thousands of investments.
- Banks and credit unions offer Roth IRAs but usually limit you to savings accounts or CDs, which earn less than stock investments over time.
- Robo-advisors automatically build and manage a portfolio for you based on your age and risk tolerance, with minimal fees.
- You can open an account in 15 to 30 minutes online at most brokerages, and you do not need to have money in the account when ready.
- The place you choose affects your fees and investment options, but not your annual contribution limit or tax rules.
Online brokerages: the most common choice
Most people open a Roth IRA at an online brokerage because they offer low costs, no account minimums, and thousands of investment choices. The three largest are Fidelity, Charles Schwab, and Vanguard. All three let you open an account online in about 15 minutes, and none charges a fee just for having the account open.
At a brokerage, you can invest in individual stocks, mutual funds, exchange-traded funds (ETFs), or bonds. You can also keep cash in the account if you want. The downside is that you have to make your own investment decisions, or pay extra for someone to help you. If you have never invested before, this can feel overwhelming — but you can start by putting money into a single target-date fund, which automatically adjusts as you get older.
Other brokerages worth considering include E*TRADE, Merrill Edge, Webull, and Interactive Brokers. Each has slightly different fees and features, but they all work the same basic way. If you already have a checking account at a bank, that bank may also offer brokerage services under a different name.
Banks and credit unions: familiar but limited
Your regular bank or credit union can open a Roth IRA for you, and you may prefer this if you already have a relationship with them. The process is straightforward: you walk in, ask for a Roth IRA, and sign paperwork. Some banks let you do it online.
The catch is that banks and credit unions usually only let you invest in savings accounts or CDs (certificates of deposit). These are safe, but they earn very little interest — often less than 1 percent per year after inflation. Over 30 or 40 years, this means your money grows much slower than it would in a diversified investment portfolio. For a Roth IRA, which is meant to sit for decades, a bank savings account is usually not the best choice.
Banks are a reasonable option if you are very new to saving and want to start with something you understand completely. You can always move the money to a brokerage later once you feel ready to invest.
Robo-advisors: hands-off investing
A robo-advisor is a company that builds and manages an investment portfolio for you automatically. You answer a few questions about your age, income, and how much risk you are comfortable with, and the robo-advisor puts your money into a mix of stocks and bonds that matches your answers. It rebalances (adjusts the mix) automatically as markets move.
Popular robo-advisors include Betterment, Wealthfront, Ellevest, and SoFi Invest. Most charge between 0.25 and 0.50 percent of your account balance per year, which is more than a brokerage but less than hiring a human financial advisor. Some have account minimums of $500 to $1,000.
Robo-advisors are useful if you do not want to think about investing but also do not want to pay a lot. The downside is that you have less control — you cannot pick individual stocks or make quick changes. For most people saving for retirement, this is not a problem.
What to look for when choosing a place
The most important factors are account fees, investment options, and account minimum. Account fees are what the company charges just to hold your money — some charge nothing, others charge $50 to $100 per year. Investment options matter if you have a specific idea of what you want to own; if you just want a straightforward portfolio, this matters less. Account minimum is the smallest amount you need to deposit to open the account — many brokerages have no minimum, while some robo-advisors require $500 or $1,000.
A second consideration is whether you want to manage your own investments or have someone else do it. If you like learning and making decisions, a brokerage is better. If you prefer to set it and forget it, a robo-advisor or a target-date fund at a brokerage is better.
A third consideration is customer service. If you think you will have questions, check whether the company offers phone support, live chat, or only email. Some brokerages offer free consultations with a financial advisor, which can be helpful when you are starting out.
The actual steps to open an account
Most brokerages and robo-advisors let you open an account entirely online. You will need your Social Security number, a government ID, your address, and information about your income and employment. The process usually takes 15 to 30 minutes.
After you open the account, you will get a confirmation email with your account number and login information. You do not have to deposit money right away — you can open the account and fund it later. When you are ready to deposit, you will link a bank account and transfer money electronically, which usually takes one to three business days.
If you are opening an account at a bank or credit union, you may need to go in person with ID and proof of address. Call ahead to ask what documents to bring.
Moving an existing IRA to a new place
If you already have a Roth IRA somewhere and want to move it, you have two options: a transfer or a rollover. A transfer means the old company sends the money directly to the new company — this is simpler and has no tax consequences. A rollover means the old company sends you a check, and you deposit it in the new account within 60 days — this is riskier because you have to remember the important date.
To do a transfer, contact the new company and ask them to initiate it. They will handle most of the paperwork. The process usually takes one to two weeks. You do not owe any taxes or penalties as long as the money goes directly from one IRA to another.
If you receive a check instead, you have 60 days to deposit it in a new Roth IRA. If you miss the important date, the money counts as a withdrawal and you may owe taxes and penalties. For this reason, transfers are almost always better than rollovers.
Frequently Asked Questions
Do I have to use the same place for my Roth IRA that I use for my checking account?
No. Many people keep their checking account at a local bank and their Roth IRA at an online brokerage. You can have accounts at multiple places. The only thing that matters is that each account is registered as a Roth IRA with the IRS.
What if I open an account but do not have money to put in it yet?
That is fine. You can open an account and leave it empty for months. You only owe taxes on money you actually contribute, and you only get the tax benefits when you deposit. There is no penalty for having an open account with zero balance.
Can I move my Roth IRA to a different company later?
Yes, anytime. You can do a direct transfer, which takes one to two weeks and has no tax consequences. You are not locked in to your first choice. Some people open at a bank first, then move to a brokerage once they understand investing better.
Is there a difference in how much I can contribute based on where I open the account?
No. The contribution limit is the same everywhere — it is set by the IRS, not by the company holding your account. In 2024, you can contribute up to $7,000 per year if you are under 50, regardless of whether your account is at a bank, brokerage, or robo-advisor.
What happens if a company goes out of business?
Your account is protected by the Securities Investor Protection Corporation (SIPC) up to $500,000 per account type. This means if the company fails, your money is returned to you. This protection applies at brokerages and most investment firms, though banks have separate FDIC insurance. Either way, your money is safe.