When a fund says its minimum initial investment amount is $2500, does that mean I need $2500 in my Roth IRA account to trade that fund? If so, would I need $7500 total in my Roth IRA account to trade three funds that have same minimum initial investment amount?

I just got into this enormous world of investment few weeks ago. I was able to open my Simple IRA account with my company. While choosing index funds to invest in, I saw a section called "Minimum initial investment", and most of funds that I looked at had $2500 in that section. I asked our financial manager what this is, and he just said I can just ignore that when choosing funds for Simple IRA.

Now, I opened Roth IRA as well, which only has $1000 for now, and here comes a problem.

  • 1
    If you are just choosing index funds you might want to look into exchange-traded funds (ETFs), which generally have lower expenses and lower minimums investments.
    – Craig W
    May 11 '13 at 15:17
  • No one seems to understand my question...I think I asked very simple question "Do I need $7500 in my Roth IRA account if I want to invest in three funds that have $2500 as their initial minimum investment?". And yet, I still didn't get exact answer...
    – kidonchu
    May 13 '13 at 14:02
  • @CraigW Yeah, ETFs are what I am investing in currently becuase Fidelity offers free transaction cost iShares ETFs.
    – kidonchu
    May 13 '13 at 14:04
  • Yes, you'd need $7500 to invest in three funds with a $2500 initial minimum investment. Is there anything that makes you think this wouldn't be the case?
    – Craig W
    May 13 '13 at 16:24

The funds often have a lower minimum for IRAs, or a lower minimum if you commit to a certain monthly deposit, say $200 per month.

  • It says "$500 minimum for Fidelity Simplified Employee Pension-IRA and Keogh accounts, and Non-Fidelity Prototype Retirement account" on the bottom of research page. Is this what you meant? It doesn't mention Roth IRA though...
    – kidonchu
    May 11 '13 at 5:24

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