Opening a Roth IRA at Fidelity: Step-by-Step

How to open a Roth IRA at Fidelity

You can open a Roth IRA at Fidelity online in about 15 minutes by visiting Fidelity.com, clicking "Open an account," selecting "Roth IRA," and providing your Social Security number, date of birth, employment information, and funding method. Fidelity will ask you to confirm your income to verify you meet the annual contribution limits — the IRS sets these limits, and they change each year. After you submit your information, Fidelity reviews it (usually within one business day) and sends you a confirmation email with your account number and login credentials.

You do not have to fund the account when ready. Many people open the account first, then transfer money in later. If you are opening the account before April 15 of the following year, you can contribute for the previous tax year — Fidelity will ask you which tax year your contribution is for when you fund it.

Key Takeaways

• Fidelity's online Roth IRA process takes about 15 minutes and requires your Social Security number, date of birth, and income information.
• The IRS limits how much you can contribute each year based on your income; Fidelity will verify your income during the process.
• You can open the account without funding it when ready, and you can contribute for the previous tax year until April 15.
• After Fidelity approves your account (usually within one business day), you can invest the money in stocks, mutual funds, ETFs, or keep it in cash.
• Fidelity charges no annual account fee for a Roth IRA, though some investments within the account may have their own fees.

What information Fidelity will ask for during signup

Fidelity will ask for your full legal name, date of birth, and Social Security number to verify your identity. They will also ask for your current employment status and annual income. This income information is required because the IRS sets income limits for Roth IRA contributions — if your income is above the limit for your filing status, you cannot contribute the full amount (or cannot contribute at all, depending on how much you earn). Fidelity uses this information to confirm you are within the limits.

You will also need to provide a mailing address and phone number. Fidelity will ask how you want to fund the account — you can link a bank account for a transfer, use a debit card, or mail a check. If you are transferring money from another IRA or retirement account, Fidelity will ask for that account's institution and account number so they can request the transfer directly.

Funding your account and choosing investments

Once your account is open, you decide when and how much to deposit. You can fund it when ready or wait weeks or months. The only important date is April 15 of the following year if you want to contribute for the previous tax year — after that date, any contribution counts toward the current year.

After the money lands in your account, you choose what to invest it in. Fidelity offers stocks, mutual funds, exchange-traded funds (ETFs), and bonds. You can also leave the money in a cash sweep account (a money market fund) while you decide. Many people new to investing start with a target-date fund, which automatically shifts from stocks to bonds as you approach retirement. Fidelity's target-date funds are low-cost and require no active management on your part.

If you are moving money from another IRA, Fidelity can handle a direct transfer so you avoid taxes and penalties. Tell Fidelity during signup that you want to do a transfer, and they will contact your old provider to move the money directly into your new Roth IRA.

Account fees and investment costs

Fidelity does not charge an annual account fee for a Roth IRA. However, the investments you choose within the account may have fees. Fidelity's own mutual funds and ETFs typically charge low expense ratios — the annual cost as a percentage of your investment. For example, Fidelity's S&P 500 index fund charges about 0.03% per year, meaning you pay $3 annually for every $10,000 invested.

If you buy individual stocks through your Roth IRA, there is no commission at Fidelity. If you buy mutual funds or ETFs from other companies, Fidelity may charge a transaction fee, though many popular funds are commission-free. When you are choosing what to invest in, Fidelity will show you the expense ratio and any transaction fees before you complete the purchase.

What happens after your account is approved

Once Fidelity approves your account, you will receive an email with your account number and a link to set up your login. You can then log in to Fidelity's website or mobile app to view your account, make trades, and track your balance. Fidelity also offers phone support if you have questions about your investments or account settings.

Your Roth IRA is now active, and the money inside grows tax-free. You can add more money each year up to the annual contribution limit set by the IRS. You cannot withdraw the earnings (the investment gains) before age 59½ without paying taxes and a 10% penalty, but you can withdraw the money you contributed at any time without penalty. This is one key feature that makes Roth IRAs different from traditional IRAs.

Common mistakes to avoid when opening your Roth IRA

The most common mistake is not verifying your income information before submitting your process. If you enter your income incorrectly and it is above the IRS limit, Fidelity may reject your contribution or flag your account. Double-check your income figure before you hit submit, or contact Fidelity if you are unsure whether you are within the limits.

Another mistake is forgetting to specify which tax year your contribution is for. If you open the account in January and want to contribute for the previous year, you must tell Fidelity when you fund the account. Otherwise, the contribution will count toward the current year, and you may miss the important date to contribute for the prior year.

A third mistake is leaving your money in the cash sweep account indefinitely. While it is safe to do so, the interest rate on cash is usually very low, and you miss out on the long-term growth that stocks and bonds can provide. If you are unsure what to invest in, a target-date fund is a straightforward starting point.

Frequently Asked Questions

Can I open a Roth IRA at Fidelity if I do not have earned income?

No. The IRS requires that you have earned income (wages from a job or self-employment income) in the year you contribute to a Roth IRA. If you have no earned income, you cannot open or contribute to a Roth IRA, even if someone else gives you the money. The only exception is if you are married and your spouse has earned income — you may be able to open a spousal Roth IRA.

How long does it take Fidelity to approve my Roth IRA process?

Most applications are approved within one business day. Fidelity will send you an email confirmation with your account number and login information. In rare cases, if Fidelity needs to verify additional information, approval may take longer. You can call Fidelity at 1-800-343-3548 to check the status of your process.

Can I transfer money from a 401(k) into a Roth IRA at Fidelity?

Yes, but there are tax consequences. A direct transfer from a traditional 401(k) to a Roth IRA is called a conversion, and you must pay income tax on the amount you convert in that tax year. A transfer from a Roth 401(k) to a Roth IRA has no tax consequence. Fidelity can help you set up either type of transfer, but you should understand the tax impact before you proceed.

What is the minimum amount I need to deposit to open a Roth IRA at Fidelity?

Fidelity has no minimum deposit requirement to open a Roth IRA. You can open the account with zero dollars and fund it later. However, some of Fidelity's mutual funds have minimum investments (often $2,500), so if you want to buy a specific fund, you may need to deposit at least that amount.

Can I have multiple Roth IRAs at different banks?

Yes, you can have multiple Roth IRAs at different institutions. However, your total contributions across all Roth IRAs in a single year cannot exceed the annual IRS limit. For example, if the limit is $7,000 and you contribute $4,000 to a Roth IRA at Fidelity and $3,000 to a Roth IRA at another bank, you have reached your limit for that year. You must track your total contributions across all accounts.