How Much Money Is Required to Open a Roth IRA?

Roth individual retirement arrangement (IRA) contributions are subject to restrictions laid out in the federal tax code. As of the time of publication, you can contribute the lesser of $5,000, or your the total amount of your taxable income for the year to a Roth. If you are 50 or older, the maximum contribution rises to $6,000. However, there are no minimum contribution rules listed in the tax code, although Roth custodians usually impose some kind of minimum deposit requirement.

Mutual Funds

If you buy mutual fund shares with your Roth IRA contribution, you normally have to make a minimum investment of $1,000, or more. Since mutual fund prices fluctuate on a daily basis, minimum purchase requirements are based on dollar amounts rather than shares. You can buy whole mutual fund shares as well as fractional shares. This means that if you spent $1,000, on shares at a cost of $400 per share, you would end up with 2.5 shares. With most other kinds of investments, you have to buy securities in solid unites rather than partial units. Some fund companies require you to spend at least $25,000 on shares, which amounts to five times the annual Roth contribution limit. However, you can buy shares in such funds with money that you have accumulated in another Roth account over a period of several years.


Annuities are life insurance contracts that provide you with tax-deferral benefits regardless of whether you hold the annuity inside or outside of a Roth IRA. Generally, you have to invest at least $5,000 when you buy an annuity, but most insurance companies enable you to buy a Roth annuity with an investment of just $2,000. The interest rates on fixed annuities are usually tiered, so you may earn more on your money if you invest $5,000, rather than just $2,000.

Bank Accounts

You can set up a Roth IRA at a bank, in which case your funds are federally insured in the event that the bank becomes insolvent. Banks usually offer Roth certificates of deposit; many of these accounts have minimum deposit requirements of just $100. However, like annuities, CDs normally have tiered interest rates so you have the chance to earn more if you invest the maximum. Banks also offer Roth savings accounts. These accounts pay minimal returns but often have no minimum balance requirements.


If you cannot decide how you wish to invest your money, you can deposit your Roth contribution as cash in a Roth investment brokerage account. You can then buy and hold stocks, bonds and other securities in that account without having to withdraw the money from the tax shelter that the Roth provides. However, many investment firms and some banks charge Roth custodian fees. If you deposit a minimal sum, such as $25 or less into your Roth, you may lose your entire deposit to custodial fees.