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Does it cost money to open a Roth IRA?

Work out what a Roth IRA actually costs you to hold, from the fund expense ratios on what you own and any advisory or robo-advisor fee, through an account or custodial fee where a broker still charges one, to the commissions and transaction fees on your trades. Opening the account is free at the major brokers, so the cost is not the sign-up: it is the yearly drag on the balance, and because most of it is a percentage rather than a flat charge, the dollar figure grows every year the account does. Put in your balance and the rates you pay, and read the drag as a dollar number rather than a decimal you skim past.

§ 01 Your numbers

Change anything. The answer updates as you type.

The current or expected balance the percentage fees are charged on. An expense ratio and an advisory fee are both a slice of this number, so the bigger the balance, the bigger the same rate is in dollars. Use what you hold now, or a balance a few years out, to see what the drag becomes as the account grows. If you are just opening the account, this is your first year of contributions.
The yearly fee the funds you hold charge, as a percentage of what you have in them. A broad index fund is a fraction of a percent; an actively managed fund runs several times higher. It is deducted from the fund's value rather than billed to you, so you never see an invoice, which is exactly why it is easy to ignore. Check the expense ratio of each fund you own and blend them if you hold more than one.
If a robo-advisor manages the account or a human advisor charges a percentage of assets, put that rate here. A robo-advisor is commonly around a quarter of a percent; a full financial advisor is often around one percent. Set this to zero if you pick your own funds and manage the account yourself, because then this line is genuinely nothing and the expense ratio is your whole percentage cost.
A flat yearly account, custodial or maintenance fee where a broker still charges one. The major low-cost brokers waive it for a Roth IRA, so this is zero for many people; some smaller or older accounts still carry one, and some charge it only below a minimum balance. Put in what your broker's fee schedule lists, and treat a zero here as a reason to keep the account where the flat fee is waived.
How many buy or sell orders you place in a year. For a buy-and-hold Roth IRA this is a handful of contribution purchases; for an active account it is more. It only costs money if your broker charges per trade, which most no longer do on stocks and ETFs, so this line is usually zero unless you trade mutual funds that carry a transaction fee.
What each trade costs. Most brokers charge zero to trade stocks and ETFs, so for a typical Roth IRA this is zero; the fee that survives is a mutual-fund transaction fee, which can be tens of dollars per buy on funds outside the broker's own no-fee list. If your trades are commission-free, leave this at zero and the trade line stays out of your total.
Estimated cost
$48

Typical range $14 – $168

  • Fund expense ratios$18
  • Advisory or robo-advisor fee$30
  • Account or custodial fee$0
  • Trade commissions$0
  • Total$48
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Under about $50 a year usually means a self-directed account of low-cost index funds at a major broker: no advisory fee, a waived account fee, commission-free trades, and only a slim expense ratio on the balance. This keeps the drag about as small as a Roth IRA gets, and it stays small until the balance grows large. Keep an eye on it as the account builds, because the same rate is a bigger dollar figure every year.

What this assumes, and where it could be wrong

Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.

EVERY NUMBER HERE IS YOURS, BECAUSE AN EXPENSE RATIO IS A PRICE AND AN ADVISORY FEE IS A RATE.
The expense ratios, the advisory or robo-advisor fee, the account fee and the trade commissions are all prices and rates a fund company, an advisor and a broker each set, and they differ enough between two accounts that a single number would mislead you rather than help. There is no federal source to look them up in, so we would rather itemise our own model in front of you than dress it up as a measurement. Every default above is ours and every one is editable. Read the expense ratio off each fund, your advisory rate off your statement, and the account and trade fees off your broker's fee schedule, then type those in.
THE COST IS THE PERCENTAGE DRAG, AND IT IS INVISIBLE BECAUSE IT IS NEVER BILLED.
Opening a Roth IRA is free at the major brokers, so a reader who checks the sign-up sees zero and stops looking. The expense ratio and any advisory fee are deducted from the funds rather than charged to a card, so there is no invoice to notice, and because they are a percentage of the balance the dollar cost climbs every year the account grows. The page turns that decimal into the dollar figure it will actually be, both on today's balance and on a larger one, because a rate you skim past is a cost you underrate.

Opening and contributing are free at the major brokers, so the cost is the holding, not the sign-up. The low-cost brokers charge nothing to open a Roth IRA, nothing to contribute, and waive the account fee, and most charge zero to trade stocks and ETFs. That is why the account fee and trade lines here default to zero: for a typical low-cost account they genuinely are. The cost that remains is the percentage drag, which is why the top two lines are the ones that matter.

The account fee and per-trade commission are flat, so they weigh most on a small account. A flat account fee and a per-trade cost do not grow with the balance, so on a new account with a small balance they can be a large share of the cost, and on a large one they fade to a rounding error. The percentage fees behave the opposite way. That is worth knowing when you pick a broker: a beginner gains most from waived flat fees, while someone with a large balance gains most from a low expense ratio.

THIS PAGE IS THE COST OF HOLDING A ROTH IRA, NOT ADVICE ON WHETHER OR HOW MUCH TO SAVE.
This is a cost calculator, not a retirement plan. It tells you what the account charges you to hold in a year; it does not tell you how much to contribute, which funds to pick, or whether a Roth or a traditional IRA suits your taxes. Those are decisions for you and, if you want one, an advisor. What this page does is make the fee side honest, so that when you compare accounts or funds you are comparing the dollar drag rather than a decimal that reads as small.

Frequently asked questions

Does it cost money to open a Roth IRA?
At the major low-cost brokers, opening a Roth IRA is free and so is contributing to it. There is no sign-up charge and the account fee is waived. What costs money is holding the account: the funds you buy charge an expense ratio, and if a robo-advisor or a human advisor manages the account they charge a fee as a percentage of your balance. So the honest answer is that opening is free but owning is not, and the calculator sizes the owning part in dollars.
What is the real cost of a Roth IRA if opening is free?
It is the yearly drag on your balance, and it is mostly a percentage. The fund expense ratio and any advisory fee are each a slice of what you hold, deducted from the funds rather than billed to you, so you never see an invoice for them. On a $12,000 balance a combined 0.40% is about $48 a year, which sounds trivial, but the same rate on a $200,000 balance is $800 a year, because a percentage grows with the account. That is the cost the calculator makes visible.
How can I lower what my Roth IRA costs?
Two levers do most of the work. First, hold funds with a low expense ratio: a broad index fund is a fraction of a percent, while an actively managed fund can be several times that, and the gap is pure cost with no promise of a better return. Second, decide whether you need an advisory fee at all: a robo-advisor or a human advisor is convenient, but their percentage is on top of the fund fees, so a self-managed account of index funds carries only the expense ratio. Waiving a flat account fee helps most on a small balance.
Are Roth IRA fees charged even if I do not trade?
Yes, the main ones are charged whether you trade or not. The expense ratio and any advisory fee are ongoing charges on the balance you hold, so they accrue every day the account is open, trading or not. Trade commissions are the exception: they only apply when you place an order, and most brokers charge zero to trade stocks and ETFs, so for a buy-and-hold account the trade line is usually nothing. The cost that never sleeps is the percentage drag.

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