AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner (CFP) and have performed fee only investment management and financial planning services for the past 11 years.
Question I want to open a Roth IRA to save for retirement. I want to know: 1) Where should I open the Roth IRA account? I don't have $ to go to a financial planner and I only have a small amount of money to get it started (about $100). I called Wells Fargo bank and they only had an interest rate of 1.1%. Is that all I can expect?
Answer Hi. With $100 to start the account, your options will be limited. Your best bet may be to open an account with a discount broker such as Charles Schwab or TDA Ameritrade and then see what investment mutual fund options are available with a $100 starting point. Charles Schwab mutual funds as well as Dreyfus mutual funds typically have pretty low minimums. If you can't find something that suits your needs, then you may need to wait until you have more $$ saved and open the account with a higher initial starting balance. $500 and $1000 is more common. Another way you can sometimes get around the initial minimums is by setting up an automatic contribution to the account each month from your checking or savings.
In regards to performance expectations, your rate of return is determined by how you invest. At Wells Fargo, the 1% return they mentioned more than likely is representative of a money market or similar cash account.
