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How To Open An IRA Account

How-To Banks, brokerages, and mutual fund companies offer IRAs. Choose the one with the products and services you want for the lowest fees.


Get the Right IRA

What Investments, Services, & Advice Do You Need?

  • How Will You Invest? If you want to invest your retirement savings in stocks, bonds, or mutual funds, you need a “securities” firm. If you want to put your retirement savings in a bank Certificate of Deposit, you need a bank.  Both are available online or in your neighborhood.  Note that holding a Certificate of Deposit or some mutual funds will limit your ability to shift your savings to another provider.
  • Will You Need Advice? How much and what type will you need? It’s worth checking out the advice offered by different providers to learn what’s available.  But know that most people rarely change their initial investment decisions, even when they should.  So consider how much and what type of advice you will actually use.
  • What Other Services Are Offered? If it’s important to you, consider how the provider presents your financial information and how easily you can read it, how easily you can manage your investments, and how easily you can transfer money.
  • Is the IRA Insured? Be sure your provider is insured by the appropriate government agency.  Note that the agency insures the value of your savings if your savings are in a bank.  If your savings are with a securities firm, the agency ensures that your securities, not their value, are safe.

Pay Attention to Fees

Mutual Fund Fees Are Typically Your Biggest Expense

If you invest your IRA savings in mutual funds, the fees mutual funds charge (typically a percent of the savings invested in the fund) vary widely.  Fees can be 0.2% or less or well over 1%  per year.  And the fees you pay are very important.  For example:   

Say you contribute to an IRA from age 25 to retirement at age 65.  In retirement you decide you could safely draw out 4% of your savings each year including the fees.

In addition to mutual fund fees,

  • You could pay a fee for having an account.
  • You will pay fees on stock and bond trades.
  • You don’t pay fees if you put your savings in a bank Certificate of Deposit, but check the interest rate that the bank pays.

Find the Right Provider

Compare Services, Fees, and Rates Online

Use the worksheet below to compare administrators:

Deposit insurance
Educational materials
Financial information/recommendations
In-person advice
Other Services
How your information is presented
Ability to manage your account
Ability to transfer money
Rates and fees
Fees for maintaining the account, if any
Fees on mutual funds you would use (very important)
Fees on buying and selling securities or investments (very important)
Interest rates you would get


Now Open Your Account

You Can Do It In-person or On-line

To open an account in person, bring along:

  • Your drivers license or government ID.
  • Your Social Security card or other proof of your Social Security number.
  • A utility bill or lease that was sent to your home address.
  • A check, cash, or money order for an initial deposit.

To open an account on-line, go to the provider of your choice, and follow their directions!

Get It Done

Nothing Happens Unless You Make it Happen

If you’re ready to apply, print out this How-To and put  reminders in your calendar to help you move from How-To to Done!



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