How Much Does It Cost to Open an IRA?

Written by Andrea Coombes
Edited by Carolyn Kimball
Fact-checked by Dayana Yochim

November 25, 2024

In general, you don’t have to pay a cent to open an individual retirement account, or IRA. Some brokers might require a minimum deposit, such as $100, but many brokers these days allow you to open an account with $0. You won’t have to hand over any money. Zero. Zilch. Nada.

It's worth noting that, while opening an IRA is free, you might run into various fees and costs once you have your account up and running.

Can I open an IRA with $0?

Yes, you can open an IRA with zero dollars. But you've heard how nothing in life is free, right? Same goes for IRAs. Obviously, once you open your account, you want to put money into your account and you want to start investing so your money can grow. Some brokers might charge account maintenance and other fees (to compare these fees at different brokers, check out our guide to the best brokers for IRAs). The investments you pick for your IRA might also charge fees, or you might pay a cost for buying or selling those investments – these investment costs have the potential to eat into retirement savings.

Types of investment fees

Individual stocks: When you invest in individual stocks, there’s essentially no fee for that investment other than the cost of the shares. (Many brokers offer fractional shares, so you can buy a fraction of that single share for less money.)

In days gone by, you would also pay a trading cost — every time you bought or sold a share, you’d pay a fee to the broker for that transaction. These days, trading costs on simple buy-and-sell transactions for individual stocks have mostly been eradicated in the U.S., which is great news. Of course, brokers still need to make money, so retail investors like you and me sometimes pay in the form of “payment for order flow,” which is when the market makers that execute trades send money back to the broker who requested the trade. This can potentially mean the broker goes to a market maker that pays it the most, rather than the one offering the best share price or transaction for you.

Mutual funds and exchange-traded funds: Mutual funds and exchange-traded funds (ETFs) are a lot alike — they both pool investors’ money to buy shares of companies. If you buy one share of one of these funds, it’s like buying a small piece of each of the companies that fund has purchased. It’s an easy, low-cost way to build a diversified investment portfolio. Here are two costs to consider with mutual funds and ETFs:

Mutual funds and ETFs charge a fee called an expense ratio. These fees generally come right out of your invested money, which means they’re easy to overlook. Make sure to compare expense ratios. Luckily, one particular type of mutual fund — called index funds because they track an index as opposed to being actively managed — are one of the lowest-cost ways to invest, and can be a great way to invest for retirement.

To find a fund’s expense ratio, do an online search for the name of the fund, e.g., “Vanguard total stock market index fund” or search for the fund’s ticker symbol. When you click on the fund company’s page for that fund, you’ll find the expense ratio somewhere on that page, possibly hidden under a tab called “details” or “fees.”

Some mutual funds require a minimum initial investment, often $1,000 to $3,000. Obviously, this isn’t a fee, but it is money you must have on hand if you want to invest in that mutual fund. Generally, once you make this initial investment, you can set up much lower monthly contributions, such as $25.

One more thing: You can open an IRA at a bank (or a bank brokerage), but most bank IRAs don’t give you the same access to a broad-based investment portfolio that the best stock brokers will give you. Personally, I'm a fan of opening IRAs at brokerages, rather than banks, so you can invest for your future.

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About the Editorial Team

Andrea Coombes has 20+ years of experience helping people reach their financial goals. Her personal finance articles have appeared in the Wall Street Journal, USA Today, MarketWatch, Forbes, and other publications, and she's shared her expertise on CBS, NPR, "Marketplace," and more. She's been a financial coach and certified consumer credit counselor, and is working on becoming a Certified Financial Planner. She knows that owning pets isn't necessarily the best financial decision; her dog and two cats would argue this point.

Carolyn Kimball is a former managing editor for StockBrokers.com and investor.com. Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money.

Dayana Yochim is a former Senior Writer/Editor at Reink Media Group who has written about personal finance and investing for more than 20 years. Her work has appeared in outlets including HerMoney.com, NerdWallet and the Motley Fool, and has been syndicated nationally. Dayana has also been a guest expert on "Today" and Good Morning America.