What Is the Minimum Deposit to Open a Roth IRA?

Opening a Roth Individual Retirement Account is an excellent way to save for the future while simultaneously taking advantage of certain tax benefits. Investors planning to open a Roth IRA can choose from multiple providers. While some providers require investors to provide a minimum deposit when they open the account, others do not.

About Roth IRAs

A Roth IRA is a retirement account that allows funds to grow tax-free until the holder reaches age 59 1/2. Unlike the contributions made to a traditional IRA, the contributions made to a Roth IRA are not tax deductible. However, the account owner won't pay any tax on the amount of his original contributions when he withdraws them, and he won't owe tax on the profit the account earns until he receives it.

Minimum Deposits

Minimum deposits vary considerably based on the provider you choose. For example, Zecco requires no minimum deposit requirement, while the Vanguard Group requires at least $1,000 for any new account. Some providers publish a minimum deposit amount but will offer to waive this requirement if you agree to certain conditions. Fidelity Investments, for example, requires a minimum deposit of at least $2,500 unless you agree to contribute $200 per month as an automatic payment. Likewise, T. Rowe Price requires a deposit of at least $500 unless you agree to automatic payments of $50 each month.

Other Contribution Requirements

In addition to requiring a minimum initial deposit, many account providers also impose charges on Roth IRAs with balances below a certain limit. Some also require investors to contribute a minimum amount each month after the account is open. For example, The Vanguard Group requires minimum monthly deposits of $100, while T. Rowe Prices charges an annual fee of $10 until the account balance reaches $5,000.

Contribution Limits

While most account providers require investors to make minimum deposits, the Internal Revenue Service also limits the amount of contributions investors can make to Roth IRAs during a single year. At the time of publication, most investors under age 50 can contribute up to $5,000 to Roth IRAs each year, and most investors over age 50 can contribute up to $6,000 each year. Limits may be lower for investors with high income levels.

About the Author

Amanda McMullen is a freelancer who has been writing professionally since 2010. She holds a bachelor's degree in mathematics and statistics and a second bachelor's degree in integrated mathematics education.

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