Why did I have to chose a mutual fund when I opened an IRA?

When I opened a T. Rowe Price IRA, I had to chose a mutual fund. I thought that an IRA was basically like a savings account. I'm not sure where the mutual fund fits in. Will my IRA ultimately be the result of how the fund does? Can I sell like you do with stock? I really don't understand any of this.

T. Rowe Price is a fund company, so it makes sense that they would require you to put the money in some type of mutual fund. If you had opened it with a brokerage like Fidelity or Banc of America Investments Services, you could have left your money in cash or you could have put it into stocks.

You can buy and sell mutual funds, so in that sense they are like stocks. Depending on what type of IRA you opened, you will probably not be able to actually withdraw the money until you retire. You can always move it to another provider's IRA account, though.

If you don't want to worry about fund performance or stock market returns, you can put your money into a money market fund. A money market fund always trades at $1.00 a share and it earns interest, so it's just like a savings account. T. Rowe runs a couple money market funds, so I'm sure there's one available to you. Since it's in an IRA, make sure that you pick a taxable fund because they will yield more interest and the IRA shell will provide tax protection. No sense putting tax sheltered funds in an account that's already tax sheltered.
Depending on how long you have until retirement, though, it's probably more suitable that you have a good, well-diversified equity mutual fund. I'm sure T. Rowe has advisors who can help you set an allocation.

First of all, never invest in something you don't understand first. An Individual Retirement Account is a special kind of account that has rules and regulations around it, i.e. when and why you can take the money out. But the money itself is invested in "something" -- that something usually being a mutual fund of some kind. And, yes, the return on your fund reflects the return on your underlying mutual fund. You can't sell it like stock, but you usually can transfer the assets to another mutual fund, keeping it under the IRA umbrella.

It麓s because of the type of IRA you choose don麓t worry it麓s normal but unlike stocks if you sell there will be a penalty to pay.

Mutual funds you may want to look into:
路 Morning star
路 Fidelity
路 Putum
路 Also a website that may help is money.com

I suggest you to Vice Fund (NASDAQ:VICEX) and you will be fine.

I am a Portfolio Manager.

There must have been a "failure of communication" between you and T. Rowe Price. You did not "have" to chose a mutual fund. You could have invested your IRA money in one of Price's money market funds or via their brokerage arm, stocks. You can sell the mutual fund like you do with stocks. You may have to pay a penalty to T. Rowe Price if you sell the fund within 90 or 120 days of purchase. They don't want their funds traded short term, it raises the cost for all investors. And you don't have to pay tax or IRA penaltys if, when you do sell the mutual fund, you keep the money in the IRA (either with T. Rowe Price, or another brokerage/fund family). You can easily have T. Rowe Price sell the fund and buy bonds or stocks with the money.

You did't My IRA was in stocks. You have to keep very good records if you manage your IRA