allgyerj[at]hotmail.com wrote:
- quote -


I assume he's hoping to earn more than 1% interest on the cash that's
sitting in the account waiting to be invested. (My Roth IRA is almost
5% in cash right now, and a better-managed account might be 20% or more
in cash for weeks or months at a time)

Bob

Ian,

I am curious why you would want to invest Roth money into a money
market? How old are you?

The reason for my curiosity is that a money market typically invests in
T-Bills and other short term debt securities. This makes the money
market highly liquid (you can get your money in and out of it quickly),
but the cost of this liquidity/lower risk is a lower rate of return.

A Roth is a retirement vehicle, which is designed to hold money for a
long time prior to distribuiton.

So, those two ideas are in conflict unless you are at or near 59 1/2
years of age.

What are you hoping to accomplish through your investment in a money
market?

On Thu, 12 Jan 2006 15:56:58 -0600, Bucky <uw_badgers[at]email.com> wrote:
- quote -

Actually you might need something like $2500 to open a Fidelity account
(unless you make automatic payments). But if you spend that on mutual
funds or stocks there is no minimum balance for your core cash MM account.
The cash in my IRA and Roth IRA has sometimes been less than $30 and they
still pay interest on it with no fees.

If you buy any stocks in a retirement account, make sure you use limit
orders, especially if you do not have much cash left. Not sure what they
do if a market order would end up higher than your available cash (maybe
an automatic cancel).

- quote -

If you're a low roller =) you can look into Fidelity instead. I believe
that their Roth IRA account has no minimum balance fees anymore. The
way that Fidelity accounts work is that they have a designated core
fund that non-invested money goes into. In the case of Roth IRA, the
core fund is Fidelity Cash Reserves money market (FDRXX). The 7-day
yield on that is 3.97%, compared to Vanguard prime MM 4.01%. You can
confirm with a Fidelity rep, but I'm pretty sure that the minimum
investment and small balance fees are not applicable when it is used as
a core fund. So you should be able to open a Fidelity Roth IRA with
$100 and get the 3.97% yield without fees.

Another consideration for Fidelity vs Vanguard is that Vanguard is
primarily a mutual fund company. Vanguard is not very good for buying
stocks or ETFs. You have to open a separate brokerage account at
Vanguard to buy stocks, and the commissions are pretty expensive. You
probably don't want to transfer Roth IRA accounts (it usually costs $50
or more), so you might want to think it through before opening one.

Ian Pilcher wrote:

- quote -


To avoid the fee, young'uns can open an account between Jan 1 and Apr
15, making simultaneous contributions for the current and previous tax
years, thus opening the account with up to $8000.

Bob

joe.spam.weinstein[at]gmail.com wrote:
- quote -

Unfortunately, they charge a low balance fee if you're under $5,000.
(I guess they only want people over 50 as their customers?)

--
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Ian Pilcher i.pilcher[at]comcast.net
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Vanguard will host your Roth IRA. They have
low costs, and their prime money market fund
does very well. They also have a very good
tax-exempt moneymarket fund for your regular
accounts if you're in a high bracket.

I am looking for a Roth IRA provider that offers a high yield (net of
costs) money market fund. Any suggestions?

Thanks!

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Ian Pilcher i.pilcher[at]comcast.net
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