Can I get by with only paying the Account Maintenance Fee once with Vanguard?

[Guest LondonBroil]

Newbie here. I've decided to open up a Vangaurd Roth IRA who charge an annual $10 fee on account balances under 10K.

If I do my 2004 contribution now, my 2005 contribution after April, and my 2006 early next year, will I only be charged the $10 fee once? (at the end of 2005).

Also, if I have 3 funds with 5K each, they won't charge me $10 for each fund, right? The way I read it was that they charge you if the total of all your funds is under 10K.

[John G]

The fee is an annual fee. So, if you have accounts in 2004, 2005 and 2006 you pay 10 x 3 or $30 unless you rise above the 10K threshold.

Vanguards $10 is at the low end of the range for custodians.

[Guest LondonBroil]

Is the fee charged at the end of the year? I plan on having more than $10K in my account by the end of 2006 so would I only get charged for 2005? I just opened my account yesterday.

[John G]

Your question is best answered by giving Vanguard a call. Get to know you custodian. They can offer support in a number of areas.

[ElGuapo]

And for what it's worth I think you'd do well to forget about the maintenance fee and not let it bother you. I think Vanguard takes it out quarterly $2.50 at a time. And after a few years of adding to the fund you'll no longer be paying it. In the meantime maybe stick to one fund instead of three so you only have one annual maintenance fee--but then Vanguard probably already explained that to you. Congratulations on opening the account.