Where to open Roth IRA for young broke people

xMoneyMakerx · #1 (**permalink**) 01-09-2006, 03:32 PM

O.K. I think the title says it all.

i am a 23 year old just barely getting into the money world. I have been reading alot of good info and i think i want to open up a roth ira pretty soon, but all the websites i have seen require a rather large minimum (at least for me) does anyone know of a good website with a low minimum or better yet no minimum? Any info will be greatly appreciated.

sweeps · #2 (**permalink**) 01-09-2006, 04:18 PM

It's my understanding that T. Rowe Price has a $1000 minimum BUT if you use their "Automatic Asset Builder", you can contribute as little as $50/month without an opening deposit.

Optsol · #3 (**permalink**) 01-09-2006, 04:34 PM

One route is to open a brokerage account, and buy an ETF that represents the mutual fund you have in mind, like the SPDRs.

Ameritrade, for example, has no minimum to open a roth.

sweeps · #4 (**permalink**) 01-09-2006, 04:39 PM

Quote:

Originally Posted by Optsol

One route is to open a brokerage account, and buy an ETF that represents the mutual fund you have in mind, like the SPDRs.

Ameritrade, for example, has no minimum to open a roth.

This is a possibility, but run the numbers to find out how much you'd be spending in commissions.

Russell · #5 (**permalink**) 01-09-2006, 08:47 PM

Mine's with Scottrade.com I believe the min is $500 to open an account.

Just a thought, say you're saving $100 a month for ROTH, you can keep it in a savings account until you have the $500 to open an account.

PRICEPLUS · #6 (**permalink**) 01-10-2006, 06:32 AM

Fidelity has a program whereby you can start with a small amount and add to each month. T. Rowe has one as well which is what I started with. There are others and it is well worth your investigating.

xMoneyMakerx · #7 (**permalink**) 01-10-2006, 08:28 AM

Maybe i did this wrong but when i went to scottrade i got rejected because of my credit. I didn't know you had to have good credit to open up an ira?

Russell · #8 (**permalink**) 01-10-2006, 10:31 AM

Yes that sounds like a mix up because you're not borrowing money from them so the credit shouldn't matter. I'd fill out the application online.

Also, I think you want ROTH not the traditional IRA...may want to do a bit of research on that. www.fool.com have a few good getting started articles.

Ima saver · #9 (**permalink**) 01-10-2006, 11:29 AM

I think you can open a roth ira at a bank and then have it transferred over to a mutual fund when you have enough to meet the minimum.

gakline · #10 (**permalink**) 01-10-2006, 01:11 PM

Quote:

Originally Posted by Ima saver

I think you can open a roth ira at a bank and then have it transferred over to a mutual fund when you have enough to meet the minimum.

You can open a Roth anywhere. My first one was with a high paying CD.

xMoneyMakerx · #11 (**permalink**) 01-10-2006, 01:41 PM

Thanks i just realized that my bank has roth ira's and the minimum is $50.00 i think i'm gonna look into that. THANKS!

Ima saver · #12 (**permalink**) 01-12-2006, 08:29 AM

Great, that is a good place to start. When it gets big enough, I would suggest you move it to a good mutual fund with very low fees. I suggest Vanguard. They will send you a form to fill out and they will get the bank to transfer your money into your vanguard account.

Good luck!!

locolorenzo24 · #13 (**permalink**) 01-12-2006, 04:59 PM

Do you have to start off with a big investment and then use the automatic asset builders? Or can you just start that with like 50 a month??

sweeps · #14 (**permalink**) 01-12-2006, 05:11 PM

Quote:

Originally Posted by locolorenzo24

Do you have to start off with a big investment and then use the automatic asset builders? Or can you just start that with like 50 a month??

You can start the T. Rowe Price account with just the $50/month. No big initial investment needed.

gakline · #15 (**permalink**) 01-13-2006, 06:53 AM

I think the same with Fidelity. You should be able to check out any of their websites.

gakline · #16 (**permalink**) 01-13-2006, 07:11 AM

Quote:

Originally Posted by xMoneyMakerx

Thanks i just realized that my bank has roth ira's and the minimum is $50.00 i think i'm gonna look into that. THANKS!

If you go into mutual funds with them, make sure you check on the fund loads. You'll definitely want a no-load fund. Anything above 1% is probably too much. My first fund through my bank had a 5% load because I didn't know any better. It just ate my money without doing anything.

Ima saver · #17 (**permalink**) 01-13-2006, 10:54 AM

Vanguard is no load and expenses are about 3/10 of one percent. But the bank is the best place for moneymaker to start.

sweeps · #18 (**permalink**) 01-14-2006, 03:11 PM

Quote:

Originally Posted by Ima saver

Vanguard is no load and expenses are about 3/10 of one percent. But the bank is the best place for moneymaker to start.

I like Vanguard too, but the original poster asked where he could open an IRA with a minimal amount of money. I believe Vanguard's minimum is $3000.

Ima saver · #19 (**permalink**) 01-14-2006, 03:13 PM

It is. I suggested he open one at his local bank and then transfer when he gets enough for the minimum.

sweeps · #20 (**permalink**) 01-14-2006, 03:20 PM

Ok, I see. But I agree with gakline that you have to watch out for high fees and loads at local banks. For this reason, the T.Rowe Price and Fidelity plans may be the best options.