Trading in the forex with a Roth IRA isn’t complicated, but it can be a little time consuming. We have outlined the steps necessary for both opening a self-directed Roth IRA account as well as opening a trading account with a forex broker/dealer.
Account Opening Process:
1. Complete an Individual Account Customer Application with the forex broker/dealer of your choice. When interviewing a broker, make sure to ask them if they support self-directed retirement accounts. You may also want to look for a non-U.S. based broker who support U.S. accounts.
2. The broker will most likely as you to also complete an IRA Trading Account Customer Agreement. Ask the broker for a hard copy or a PDF file containing this form as you will need to send paper copies to the IRA custodial firm.
3. Choose a trust company that offers self-directed Roth IRA accounts. Be specific when you talk to the custodial firm and let them know that your intention is to trade currencies within this account. Not all custodians support forex trading.
4. Send the completed Individual Account Customer Application (for your trading account), IRA Trading Account Customer Agreement and the self-directed IRA application directly to the trust company.
5. Once the custodial firm has received these documents, they will set up your self-directed Roth IRA.
6. Deposit your IRA funds directly with the custodian. As soon as your IRA funds are received, they will send the account application to the broker along with a certified check of your funds.
5. The trading account will be opened in the “Name of the Trust Company” FBO “Your name” IRA with the custodian’s address and their Tax ID.
6. You will be notified by the forex broker/dealer’s New Accounts Department when your trading account is open for you to conduct trading.
Not all trust companies permit currency trading within a Roth IRA, but here are a few who do: Equity Trust Company, Millennium Trust Company and Entrust Midwest, LLC.
Please note: Opening procedures for each trust company do vary slightly.
To fund your account you must send contributions directly to the trust company you are opening an IRA account with. They will, in turn, send the funds to the broker/dealer of your choice.
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