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Step 1
Choose the type of IRA you wish to open. You may pick either a Traditional IRA or a Roth IRA. The benefit of a Traditional IRA is that it uses pretax income. This gives you more money to invest for growth overtime. If you had to use after tax income, you would have less money available after taxes were taken out. The Roth IRA also has some advantages. Because the Roth uses after tax income, you can withdraw the amount of your contributions without facing penalties. There are also some other exceptions for withdrawing money before you retire without penalties, such as for first time home purchases of a certain amount.
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Step 2
Meet the requirements for investing in either a Traditional or Roth IRA. Each of these have different requirements for you being able to invest. Both require that you have earned income. Roth IRA's require that you make under a certain amount of AGI (adjusted gross income). For 2008, this amount was $101,000 for single individuals. For a Traditional IRA, the amount your employer invests for you in an employer sponsored retirement plan may have an effect on the amount you can invest in your Traditional IRA. To learn more about these specific rules, see the Ehow article listed or look at IRS Publication 590.
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Step 3
Set up your IRA account online. Go to the Fidelity Investments website listed in the resources. Go to the section of the website dealing with IRA's, and choose the option to open an IRA account. Once you have done this, you will be asked personal information, as well as whether you wish to invest in a Traditional or Roth IRA.
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Step 4
Choose what you will invest in. You may pick a money market account, individual stocks or mutual funds. Mutual funds generally produce the best returns over time, but expose you to more risk than a money market account.
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Step 5
Fund your account. To be able to open an IRA account, you need the funds available. Fidelity either requires you to send in a check for the initial deposit, or to link your bank account. Linking your bank account would give you the option for ETF (electronic funding) of your account, meaning that deposits could be made online instead of by mail or in person.
The minimum amount to open a mutual fund is $2,500. The only exception to this is if you wish to have funds automatically taken from your checking account each month. Then, you must start with $200 and have $200 withdrawn from your checking account monthly. Investments in a stock or money market account can be any amount you choose up to the maximum amount allowed per year for IRA's ($5,000 for 2009, with an extra $1,000 allowed if you are 50 or older.) -
Step 6
Open your IRA account. Login to your Fidelity account online. Follow the instructions for investing in your IRA. You will be taken through steps that let you choose your stock or mutual fund, and whether to invest a lump sum or monthly investments. Once you have confirmed all of the information, you have successfully opened the IRA account. Mutual fund purchases are generally made the next business day. You can log into your IRA account the next day to make sure the transaction was successful.
