Opening a Roth IRA at Fidelity

You can open a Roth IRA at Fidelity online in about 10 minutes. Go to Fidelity.com, click "Open an account," and select "Roth IRA" from the account type menu. You'll need your Social Security number, date of birth, and a valid government ID. Fidelity will ask for your employment status and annual income — this is standard verification, not a barrier to opening the account.

After you complete the online form, Fidelity verifies your identity electronically. Most accounts are approved the same day. You can then log in and begin funding the account or choosing investments immediately, though some verification steps may take 24 to 48 hours to fully clear.

If you already have a Fidelity brokerage or checking account, the process is faster — you can link your existing login and skip some identity steps. If you're opening your first Fidelity account, have your bank account information ready so you can link it for transfers.

Key Takeaways

  • You can open a Roth IRA at Fidelity online and fund it the same day using a linked bank account or existing Fidelity cash balance.
  • For 2024, you can contribute up to $7,000 per year if you're under 50, or $8,000 if you're 50 or older — the limit resets January 1 each year.
  • Fidelity offers three main investment paths: a money market fund (cash), mutual funds and ETFs you choose yourself, or a robo-advisor portfolio that picks funds for you.
  • Your contribution must come from earned income (wages, self-employment, or taxable compensation), not from investment returns, Social Security, or unemployment benefits.
  • Income limits apply: if your modified adjusted gross income exceeds certain thresholds, you cannot contribute the full amount or may not be able to contribute at all.

Funding Your Roth IRA Account

Once your account is open, you fund it by transferring money from a bank account you own. Log into your Fidelity account, go to "Accounts & Trade," and select "Deposit Funds." Choose "Bank Transfer" and link your checking or savings account. Fidelity will ask you to verify the account by depositing two small amounts (usually under $1 each) and having you confirm those amounts — this takes one to two business days.

After verification, you can transfer money instantly using ACH (Automated Clearing House), which typically arrives within one business day. There is no limit on how many times you can transfer, but your total contributions for the year cannot exceed the annual limit.

If you already have money in a Fidelity brokerage or money market account, you can move it directly into your Roth IRA without linking a bank. This is faster and counts toward your annual contribution limit.

Annual Contribution Limits and Income Restrictions

The amount you can contribute to a Roth IRA each year depends on your age and income. For 2024, the contribution limit is $7,000 if you're under 50, or $8,000 if you're 50 or older. This limit resets on January 1 each year. You can contribute at any time during the year, but the total across all your Roth and traditional IRAs cannot exceed the annual limit.

Your income also determines whether you can contribute the full amount. Fidelity uses your modified adjusted gross income (MAGI) — a figure from your tax return — to check this. For 2024, if you file as single and your MAGI is $146,000 or more, you cannot contribute to a Roth IRA at all. If you're married filing jointly, the limit is $230,000. These thresholds change each year.

If your income falls in the phase-out range (between the lower and upper limits), you can contribute a reduced amount. Fidelity's website has a calculator that shows your limit based on your filing status and income. You do not need to know this before opening the account — you can verify it when you're ready to fund.

Choosing Your Investments

After funding your account, you decide how to invest the money. Fidelity offers three main paths. The simplest is to leave the money in a money market fund, which acts like a savings account and currently pays around 4 to 5 percent annually (rates change). This is safe but grows slowly.

The second path is to pick individual mutual funds or exchange-traded funds (ETFs) yourself. Fidelity offers thousands of options, including its own funds (which have no transaction fee) and funds from other companies. If you're new to investing, Fidelity's website has educational guides and fund comparison tools. Many people choose a simple mix: a U.S. stock index fund, an international stock index fund, and a bond fund.

The third path is Fidelity's robo-advisor, called Go. You answer questions about your age, risk tolerance, and time horizon, and Go automatically builds and manages a portfolio of low-cost index funds for you. There is no advisory fee for this service if your account is under $25,000. This is a good option if you want professional-style management without making individual fund choices.

Income Requirements and Earned Income Rules

Your contribution must come from earned income — money you received for work. This includes W-2 wages, self-employment income, and taxable alimony or spousal support. It does not include investment returns, interest, dividends, Social Security, unemployment benefits, or gifts.

You can contribute up to the amount of earned income you received that year, but not more. If you earned $5,000 in 2024, you can contribute up to $5,000 to your Roth IRA for 2024, even if the annual limit is $7,000. If you're married and your spouse has earned income, your spouse can open their own Roth IRA and contribute based on their income — you cannot contribute on their behalf to your own account.

Fidelity does not verify your earned income when you fund the account. You are responsible for ensuring your contribution is legal. If you over-contribute, the IRS charges a 6 percent penalty tax each year the excess remains in the account, so it's important to track this yourself.

Transferring Money From Another IRA or 401(k)

If you have an IRA or 401(k) at another financial institution, you can move that money to your Fidelity Roth IRA through a rollover or transfer. A rollover means the old institution sends you a check, and you deposit it into Fidelity within 60 days. A transfer means Fidelity contacts the old institution directly and moves the money without you handling it — this is simpler and avoids the 60-day deadline.

Important: if you're rolling over a traditional IRA or 401(k) to a Roth IRA, you owe income tax on the amount you move. This is called a Roth conversion. Fidelity will guide you through the tax reporting, but you should consult a tax professional before doing this, because the tax bill can be substantial.

To start a transfer, log into your Fidelity account, go to "Accounts & Trade," and select "Transfer Accounts or Assets." Fidelity will ask for your old account details and contact the institution on your behalf. The process usually takes five to seven business days.

What Happens After You Invest

Once your money is invested, you can check your balance and performance anytime by logging into Fidelity. You can add more money throughout the year as long as you stay within the annual limit. You can also change your investments at any time — moving money between funds, adding new funds, or shifting to the robo-advisor.

You cannot withdraw your contributions or earnings before age 59½ without a penalty, with a few exceptions (first-time home purchase up to $10,000 lifetime, may have access to education expenses, disability, or medical bills over 7.5 percent of income). If you withdraw before 59½ and don't meet an exception, you pay a 10 percent early withdrawal penalty plus income tax on the earnings portion.

At age 73, you must begin taking required minimum distributions (RMDs) from traditional IRAs, but Roth IRAs have no RMD requirement during your lifetime. This is one major advantage of a Roth — your money can grow tax-free for as long as you live.

Frequently Asked Questions

Can I open a Roth IRA if I'm self-employed?

Yes. Self-employment income counts as earned income. You can contribute up to the amount of net self-employment income you report on your tax return (after the self-employment tax deduction). If you have employees, you may also want to open a Solo 401(k) or SEP IRA, which allow higher contributions, but a Roth IRA is available to all self-employed people.

What if my income is too high to contribute?

If your income exceeds the Roth IRA limit, you have two options: a backdoor Roth (contributing to a traditional IRA and immediately converting it to Roth, though this has tax complications) or a Solo 401(k) if you're self-employed. Consult a tax professional before attempting a backdoor Roth, as the rules are complex.

How long does it take to see my money invested?

Once you transfer money to Fidelity, it arrives in your account within one business day. If you immediately buy a fund, the purchase settles within one to two business days. You can see the investment in your account right away, but the official settlement takes a day or two.

Can I have both a Roth IRA and a traditional IRA?

Yes, but your combined contributions to both cannot exceed the annual limit. If you contribute $4,000 to a Roth IRA, you can only contribute $3,000 to a traditional IRA that year (assuming the $7,000 limit). Track your total across all IRAs you own, including those at other institutions.

What if I need to withdraw money before retirement?

You can withdraw your contributions (the money you put in) anytime without penalty or tax. You cannot withdraw earnings (investment gains) before 59½ without a 10 percent penalty and income tax, unless you meet a narrow exception like disability or a first-time home purchase (up to $10,000 lifetime). Fidelity can show you how much of your balance is contributions versus earnings.