Key takeaways

• You can open an IRA at a bank or financial institution, sometimes with $0 minimums, though some require an initial investment to start.
• In 2026, you can contribute up to $7,500 ($8,600 if you are aged 50+), across all your IRAs combined.
• Traditional IRAs offer potential current tax deductions; Roth IRAs offer tax-free withdrawals in retirement and no RMDs at age 73.

An individual retirement account (IRA) is a powerful tool designed to help you save for your future, and opening one is surprisingly easy.

You can open an IRA online at a variety of institutions, such as a financial services provider, bank, and even mutual fund companies. While many IRAs have no minimum deposits, others may require a specified initial investment.

The sign-up process typically involves providing some basic information — like your name, Social Security number and employment information — and then deciding how to get money into the account. You can make contributions by transferring funds from an existing bank account, transfer money from another IRA or rollover from a 401(k) plan account (if eligible to do so).

Read more: How to roll over a 401(k)

What kind of IRA should I choose?

The two most common types of IRAs are traditional IRAs and Roth IRAs. Contributions to traditional IRAs are potentially tax deductible.  Any growth is tax-deferred, but withdrawals in retirement are taxed.

Contributions to a Roth IRA are not tax-deductible; however, any earnings grow tax-free, and qualified distributions are not subject to federal income tax. Roth IRAs also don’t require you to begin making required minimum distributions (RMDs) at age 73 as traditional IRAs do.¹

You might consider a Roth IRA if you expect to be in a higher tax bracket during retirement. For example, if you’re currently young and earning an entry-level salary. You’re also allowed to have both types of IRAs and even multiple traditional or Roth accounts.

Keep in mind, however, the total annual contribution to all your IRAs in 2026 cannot exceed $7,500, (or $8,600 if you’re 50 or older).

Read more: Roth vs. traditional IRA: Which should I choose?

Who is eligible to open an IRA?

While pretty much anyone with earned income can open an IRA, there are income limits with a Roth IRA — and sometimes with a traditional IRA — if you also have a workplace 401(k) plan account. Income limits for a traditional IRA don’t affect your ability to open one, just whether your contributions will be tax deductible.

If you’re a non-working spouse, you may be eligible for a spousal IRA, which lets your working spouse open a Roth or traditional IRA in your name.

Even children can have an IRA with an adult custodian, but they must report income from work — such as babysitting — and their total contribution is limited to their annual earnings up to $7,500. A Roth IRA is almost always the best choice for kids since their income likely puts them in a low- or zero-income tax bracket.

Read more: Custodial Roth IRA: Planning for your child’s future

How to invest in an IRA

Keep in mind that an IRA is not an investment in and of itself. Once you open the account, you need to decide where to invest your money. For example, within an IRA you can typically invest in stocks, bonds, mutual funds and exchange-traded funds (ETFs). Along with the tax benefits, flexibility in investment choices is one of the chief advantages of an IRA.

If you’re not comfortable managing investments by yourself, you may consider working with a financial professional or opening an IRA with a financial institution that provides advice or automated investing tools.