How to Open a Roth IRA at a Credit Union

A Roth IRA presents you with the ability to save more for retirement by using your after-tax income. It is also an excellent way to reduce your taxable retirement income since you can withdraw Roth IRA distributions tax-free so long as you meet the valid withdrawal criteria. And the great news is that you don’t always have to wait for your employer’s approval to open Roth retirement accounts. You can do it on your own.

Where Can You Open a Roth Account?

If you want to invest in Roth IRA mutual funds or any other kind of security, then you must first open a Roth IRA account. Where you open the account will largely depend on whether you want to participate in making investments actively or if you would rather hire someone to do it on your behalf instead. Based on that decision, you could open your account with custodians such as:

  • Brokerage firms
  • Robo-advisors
  • Banks
  • Credit unions
  • Financial planning firms
  • Mutual fund companies

Remember, you don’t have to open a Roth IRA account in person. Some custodians allow you to do that online, which can be pretty convenient.

Roth IRA: Credit Union vs. Bank

In most places across the country, you will either find credit unions or banks. So, you may find it easier to open a Roth IRA in either of these institutions. For that reason, it would help if you were to compare the two to determine which way to go.

Credit Unions

Typically, credit unions tend to charge lower fees than banks because they are member-owned cooperatives that share profits with members. Also, because credit unions are not-for-profit institutions, they don’t pay corporate income tax. And due to their lower operating expenses, they tend to offer higher interest rates for products like certificates of deposit (CDs).

It is also worth noting that the National Credit Union Share Insurance Fund (NCUA) helps to insure credit union members’ funds to the tune of​ $250,000​ each for individual, retirement, trust, business and joint accounts.

However, there are fewer credit unions compared to banks. In addition, they tend to offer limited choices concerning financial products.


On the other hand, banks have more brick-and-mortar offices, thus making them more readily available. In addition, they tend to offer more financial products and ATMs. Also, banks tend to have better technology that enhances convenience for investors.

It’s also worth noting that federally insured banks can safeguard your IRA investments to the tune of $250,000. However, banks tend to charge higher fees to accommodate the taxes they need to pay and the profits they need to make.

How to Open a Roth IRA at a Credit Union

Below are the steps you should take to open a Roth IRA at a credit union.

1. Determine if you are eligible to open a Roth IRA account. Generally, you must earn an income of less than ​$140,000 if you are filing as single, or less than $208,000 if you are married filing jointly to be eligible for the account.

2. Determine which credit union in your locale is best for your needs. You can do that by researching online and asking for recommendations from those in your social circle. Sometimes, it’s a matter of finding the nearest credit union near you. For example, if you live in Oregon, you could open an Oregon Community Credit Union (OCCU) Roth IRA account.

3. Apply via the credit union’s online portal. Alternatively, you can apply for a Roth account in person by contacting a new account executive at your credit union’s offices.

4. Ensure you provide all the relevant paperwork. That includes your Social Security number, driver’s license, your employer’s identification details, details concerning your Roth IRA beneficiary and current bank account’s name and routing number.

5. Once the account has been opened, you can fund it. The maximum you can use to fund Roth IRAs is ​$6,000​ annually (​$7,000​ if you are 50 years or older).

6. Decide what kind of investments you want to make based on what your credit union has available.

Opening a Roth IRA at a credit union is relatively easy if you know what to do and have the relevant paperwork. You may end up spending less on the transactions than you would have if you opted for a bank or brokerage. And remember, if you are not knowledgeable, you should consult a financial advisor to help you out.