How to Easily Open a Roth IRA with Vanguard in 15 Minutes

I know a lot of people who want to invest their money and save for retirement but feel totally overwhelmed about where to start.

They are afraid that opening an account will be confusing and complicated — and think that even if they open an account, they wouldn’t be sure what to do with it.

The reality is that opening a retirement account for yourself is simple, quick, and easy. In this post, I’ll take you through the steps (including screenshots) of opening a Roth IRA with Vanguard. Each step only takes a minute or two, so if you follow along you should have your account set up in around 15 to 20 minutes. 

Why Open a Roth IRA?

If you want to know a bit more about what a Roth IRA is, its benefits, and how it compares with other retirement accounts you can read this post here

The Cliff’s Notes version is that Roth IRAs have two important benefits. First is that you invest post-tax income so all of your future earnings and distributions are tax-free. Second, you can withdraw the money you’ve contributed anytime without penalty – it’s only your earnings that can’t be withdrawn until 59 ½ without penalty – giving you much more flexibility. 

Both of these reasons are why I highly recommend a Roth IRA as a great vehicle for retirement savings.

Why Use Vanguard for Your Retirement Accounts?

I recommend opening an account with Vanguard for a few reasons. First, they have a mutual ownership structure, meaning that rather than being owned by private owners or public investors hoping to profit off of you, they are owned by the Vanguard investors themselves who hold their mutual funds. Which, in this case, would mean you.

Because of this structure, Vanguard has some of the lowest expense ratios (aka fees) in the business. Currently, Vanguard’s average expense ratio across its funds is 0.09%, compared to the industry average of 0.49%. This seemingly small 0.4% difference could save you over $3,000 on a 10-year investment of $50,000. Lengthen that time horizon to 30 years and you’ve saved over $30,000 by going with the lower fee fund.

And finally, because of these low fees and their choice of index funds, their funds tend to outperform their competitors.

Alright, so if you’re ready to open your very own Roth IRA account with Vanguard (and you make less than $153,000 as a single person) go ahead and open a new tab now so you can follow along. 

How to Open a Vanguard Retirement Account

Step 1: Go to Vanguard

Go to vanguard.com and select “Personal Investors.”

Step 2: Open a new account

Select “Open an Account” on the top menu bar.

Step 3: Answer a starter question

Give them some information on the type of account you’d like to open. Select “open a new account with money from my bank.”

Step 4: Create an online profile with Vanguard

Choose to set up a new Vanguard account.

Press continue on the next page. 

Step 5: Select your account type (retirement)

Let them know what kind of account you are wanting to set up by selecting “Retirement investing.”

Another selection box will pop up underneath, and you’ll select “Roth IRA” before pressing continue. 

Step 6: Finish the application

Complete your application by providing some personal information.

Step 7: Link your bank account and fund your initial investment

Connect the bank account you would like to fund your investment account with.

And then determine how much you would like to transfer to Vanguard to fund your initial investment (you can also choose to make no initial transfer and make a transfer at a later time).

Step 8: Wait for application approval

Wait for your application to be processed. This usually happens pretty quick (often instantly) but sometimes it may take a few days. 

Step 9: Purchase your funds

Your money will initially go to your “Vanguard Federal Money Market Fund.” This fund is essentially just a savings account for your money until you purchase the investment funds you want to invest in. This may be the part you feel most nervous about, but don’t worry — I’ve got you covered with some basic tips!

In order to actually invest your money and have it start working for you, you’ll need to go to your account and click the 3 vertical dots next to “Transact” in the right corner.

You’ll choose “Buy Vanguard Funds” if you plan on purchasing a mutual fund, or “Trade Vanguard ETFs” if you plan on purchasing ETFs. They’re essentially the same thing, but if you’re investing less than $3,000 you’ll need to start off with ETFs.

Once you select your purchase option it will take you to a new screen where you will select which fund you want to purchase, how many, and when. You can see an example of this filled out as if you wanted to purchase VTI below.

  • Buy” means you want to buy shares — simple enough.
  • The symbol refers to the stock ticker symbol that references the fund you want to buy — you’ll type in which one you want to purchase.
  • The amount is the number of shares you wish to purchase, or you can purchase fractions of a share by putting in a specific dollar amount. The amount you select will depend on how much money you have available in your money market fund.
  • Market” means that you want the purchase to be completed instantly, or as soon as markets open. Market orders are always day orders because they happen that day or the next business day.

Once you have it filled out and you have enough money in your money market fund, you’ll be able to click preview order and confirm your purchase.

This is probably the part that you’ll feel the most overwhelmed and may not know what you want to invest in. That’s okay! You haven’t done this before. Luckily for you, the best investing is usually simple investing — buy low-cost index funds, hold them for a long time. I’ve listed a few recommendations funds below that you may want to start with, but don’t be afraid to do your own research as well.

Recommended Index Funds and ETFs for New Investors

All my recommendations are broad, low-cost index funds and ETFs. If you want to learn more about why I recommend investing in low-cost index funds check out this post

VTSAX – Vanguard Total Stock Market Index Fund

VTSAX is a large blend index fund that tracks the Total Stock Market Index, which means that when you buy a share of VTSAX, you’re actually buying a small share of over 4,000 companies. Its expense ratio is only 0.04% but since it is a Vanguard Mutual Fund, it requires a $3,000 minimum initial investment. If you don’t have that, don’t fret, that’s where ETFs come in — see below.

VTI – Vanguard Total Stock Market ETF

VTI is essentially the same share as VTSAX, just in the form of an Exchange Traded Fund (ETF). Don’t worry about the difference. It also tracks the Total Stock Market Index, includes stocks of those same 4,000 companies, and actually has a slightly lower expense ratio of 0.03%. Since it’s an ETF rather than a mutual fund, there is no large minimum investment when you start out.

VOO – Vanguard S&P 500 ETF

VOO is another large blend index, but rather than tracking the total stock market, it tracks the S&P 500. This means when you purchase a share of VOO you getting a small piece of 500 of the largest U.S. companies. The expanse ratio is also 0.03%.

ESGV – Vanguard ESG U.S. Stock ETF

If you’re looking to be a more socially-conscious invester, you may want to consider including this fund in your portfolio. While this is also a large blend index fund, the companies it invests in must meet certain criteria regarding environmental, social, and corporate governance issues. For example, it “excludes stocks of companies that do not meet certain labor, human rights, environmental, and anti-corruption standards as defined by the UN Global Compact Principles.” Due to the slightly extra oversight required, this fund has a slightly higher expense ratio of 0.09%, though still significantly lower than similar funds outside of Vanguard.

All of these recommendations are based on the premise that you are planning to invest for the long term using a buy-and-hold strategy.

Bonus Step: Set up recurring transfers.

Once you have your account, it’s best to automate your contributions on a weekly or monthly schedule. To do this just go to your “Profile and Account Settings” in the top right. Click “Set up a recurring investment” and then add an automatic transaction for the frequency and amount you wish.

The contribution limits for 2023 are $6,500 for those under 50 and $7,500 for those 50 and above.

Note: If you are purchasing ETFs you will need to remember to log in to purchase the ETFs with the money that you transfer into your Vanguard Money Market Fund. Otherwise it will just sit in that savings fund rather than being invested. I suggest making it part of your weekly budget check-in. If you are purchasing mutual funds, you are able to set up automatic purchases directly into those funds, which is convenient and reccomended.


And that’s it! You’re all set up, congratulations!

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