Best brokers for mutual funds

A mutual fund broker could help you diversify your investments

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With the right approach, mutual funds can be a safer investment than purchasing individual shares in a company. A mutual fund is a collection of investments that include stocks, bonds and other assets. When investing in a mutual fund, a financial expert pools your and other investors' funds. Then, the fund manager buys and sells investments to stabilize the fund's performance, create returns for you and other investors and minimize losses.

Mutual funds allow you to grow your investment with potentially lower risk than you would have when buying individual shares. Investors can purchase shares in a mutual fund inside a retirement account or a traditional investment account through a broker. If you think mutual funds might be the right fit for you, here are some of the best mutual fund brokers to help you grow your investment.

Compare mutual fund broker companies

Account minimum
$0 if you choose a Select Account
Per-trade fees
Depends on internal expenses of the individual investment
Investment app

Edward Jones is a full-service financial brokerage that offers services for individuals and businesses. You can get a 529 college savings plan or retirement account through Edward Jones and choose mutual funds as your investments.

Edward Jones offers one-on-one financial advice; you'll meet with a financial advisor, discuss your goals and financial situation and receive guidance about where to invest your money.


  • One-on-one financial advice from live professionals
  • $0 minimum for some accounts
  • Over 15,000 branch locations


  • Fees are high compared with those for robo-advisors
  • Advisors receive commission
Account minimum
Per-trade fees
$0 for stock, ETF and bond trades; funds fees don't typically have fees, but some are priced individually
Investment app

Vanguard specializes in low-cost investing, so you may find it a good fit if you’re a buy-and-hold investor.

The variety of mutual funds on Vanguard’s basic trading platform could benefit beginning investors.


  • Many low-cost mutual funds available
  • Large selection of mutual fund.
  • Investor-owned


  • May not be ideal for advanced investors
  • Limited data and research available on the Vanguard site
Account minimum
Per-trade fees
$0 for Schwab Funds and funds participating in OneSource; up to $74.95 for all other funds
Investment app

Charles Schwab offers more than 4,000 mutual funds with no transaction fees. Sophisticated tools combined with $0 commissions mean that even active traders can conduct business on the platform without racking up a ton of fees.

Schwab specializes in providing educational resources for those new to investing.


  • No minimums or per-trade fees for Schwab Funds
  • Large selection of mutual funds
  • Commission-free trades


  • Uninvested money may be deposited into the brokerage sweep account
  • Some funds have per-trade fees
Account minimum
$25,000 for Active Portfolios and Ameriprise Strategic Portfolio Service Advantage
Per-trade fees
Varies by individual mutual fund type
Investment app

Ameriprise Financial is a full-service brokerage offering asset allocation, financial planning and ongoing portfolio management services. Advisors also sell financial products and insurance.

Ameriprise Financial offers several investment programs to provide a one-stop-shop experience for investors.


  • More than 2,200 funds available
  • Wide array of financial services
  • Works with more than 160 fund companies


  • High minimum account balance requirements
  • Fees may be high depending on type of fund
Account minimum
Per-trade fees
Fees vary by fund; some mutual funds have no transaction fees
Investment app

Fidelity Investments has a reputation for providing excellent customer service. More than 3,400 of its 10,000-plus mutual funds have no transaction fees. With Fidelity, you'll get helpful research tools and a highly rated mobile app.

Fidelity offers mutual funds from several big-name companies, and opening a brokerage account takes just a few minutes. Buy-and-hold investors may enjoy the no-frills platform.


  • More than 10,000 funds to choose from
  • Fast onboarding for new investors
  • About 3,400 of the mutual fund options are no-load funds


  • No commodity purchases
  • No cryptocurrency purchases
Account minimum
Per-trade fees
Investment app

E*TRADE appeals to seasoned investors as well as newbies with its robust trading platform and a suite of educational and portfolio-building tools.

The E*TRADE website and mobile app offer access to real-time market commentary and quotes. Active traders can use the Power E*TRADE platform for help executing complicated investment strategies.


  • Portfolio-building tools
  • Large selection of mutual funds
  • Helpful educational resources


  • Website is somewhat difficult to navigate
  • Few local branches
Account minimum
Per-trade fees
$0 to $9.95
Investment app

Active traders may find a number of great features with Ally Bank. The brokerage doesn't offer any zero-transaction-fee mutual funds, however.

Ally Bank offers competitive pricing, advanced trading tools and no account minimums. It could be a good fit if you want to purchase shares of mutual funds to hold for the long haul. Transaction fees on mutual funds could get in the way of frequent trades, though.


  • Suite of free tools
  • Automated portfolio management
  • Large selection of mutual funds


  • No physical branches
  • Uninvested cash earns zero interest

What is a mutual fund?

A mutual fund pools money from several investors to purchase securities like short-term debt, stocks and bonds. The combined investments are the fund's portfolio. When the fund performs well, investors mutually benefit — hence the name. When the fund struggles, everyone feels the effect.

Your risk of losing money is smaller with a mutual fund because it’s a diversified investment vehicle.

There are a few reasons you might want to invest in mutual funds:

Diversification: Investing in a single stock is like putting all your eggs in one basket — a single event that results in stock prices falling could be financially devastating. With a mutual fund, you own shares in several investments. Their cumulative losses and gains balance out to produce your profit. If one (or a few) stock prices fall, your share in the mutual fund may remain stable.

Convenience: Mutual funds can sound complicated, but most make investing easy. All you need to do is buy shares with a brokerage account or directly through the mutual fund company. Many of these funds also have automatic investment plans, which makes things even simpler. For instance, you could automatically invest $500 monthly in the fund, and you won’t even have to think about it.

Your risk of losing money is smaller with a mutual fund because it’s a diversified investment vehicle.

Liquidity: When you decide to invest in mutual funds, you can redeem (sell) your stocks at any time. You'll receive the current net asset value (NAV) minus any applicable fees. Other investment types may be illiquid, meaning it's more difficult (or impossible) to get your money out of the investment before its maturity date. Real estate and some debt instruments are examples of illiquid assets.

Affordability: A mutual fund may have a lower financial barrier to entry than individual stocks. For example, some stocks might cost more than $2,700 per share. But if you choose to invest in a mutual fund with Vanguard that has Autozone stock in its portfolio, you could start with a $1,000 minimum investment.

Professional management: Fund managers select investments in a mutual fund's portfolio. They also decide when to sell specific investments and buy others to produce returns for investors. This can be great for individual investors who don’t have the time or knowledge to research publicly traded companies.

» COMPARE: Mutual funds vs. ETFs

Types of mutual funds

There are four main types of mutual funds. Each type spreads risk across several investments while simultaneously capturing gains from those investments.

Equity funds
Equity funds make up about 55% of all mutual funds on the market today. Funds are often based on the size of the companies' stock inside the fund:
  • Large-cap fund: Market value of $10 billion or more
  • Mid-cap fund: Market value of $2 billion to $10 billion
  • Small-cap fund: Market value of $300 million to $2 billion

Equity funds may focus on a specific sector, like oil and gas, health care or technology. Owning a few different mutual funds across various sectors can help mitigate risk.

The investment style of the equity fund may also differentiate it among mutual funds. Growth fund managers look for stocks that could produce above-average returns. Value fund managers seek stocks that are undervalued by the market.

You can also choose equity funds by the geographic location of the companies within the fund's portfolio. International funds invest in companies that aren't U.S.-based, while global funds invest in companies located both within the U.S. and abroad. Emerging market funds seek out companies in developing countries.

Fixed-income funds
Fixed-income funds primarily invest in bond funds, which invest in corporate and government debt and are widely considered a safer investment than stocks. They also have a smaller potential for growth. Investors receive a fixed amount of money on their investment. Those approaching retirement may choose to move their investments into fixed-income funds to protect their nest egg from the volatility of the stock market.
Money market funds
Money market funds are also fixed-income mutual funds, but they invest in short-term (high-quality) government, corporation or bank debt. These assets may include certificates of deposit (CD), commercial paper or U.S. Treasurys. Money market funds are traditionally a safe investment.
Balanced or hybrid funds (stocks and bonds)
Also called asset allocation funds, balanced or hybrid funds represent a combination of fixed-income and equity funds. Target-date funds are balanced funds that automatically reallocate investment ratios to line up with the investor's retirement target date. As an example, you could start out with 60% invested in stocks and 40% in bonds and shift to 50% in each five years from retirement, then to 20% stocks and 80% bonds two years from retirement.

There are other types of lesser-known funds, including hedge funds, real estate investment trusts (REITs), socially responsible funds, managed futures and commodities. These specialty or alternative funds fall into a catch-all category.

How to start investing with a broker

Getting started investing with a broker doesn’t have to be complicated. If you know what you want and need in a broker, it should only take a few steps. Here’s how to start investing.

Determine your goals

The first step is to determine your investing goals. As mentioned, starting to invest in mutual funds isn't difficult if you know what you want. However, you shouldn’t skip this step, as it will be foundational to selecting the right investments.

Start by asking yourself why you are investing. For example, are you investing for retirement, a big vacation or a down payment on a car? These are all common reasons to save and invest, but your answer will influence your investing strategy.

Generally, the longer your time horizon, the more ambitious you can be with your investments. This is because they will have time to recover from any downturns that may happen along the way. Conversely, if you need your money in the next few years, you’ll want to be much more conservative.

Open an account with your preferred broker

There are many online brokers, and this page highlights some of the best ones available today. Determine the best broker to meet your needs, then open an account.

First, fill out the online application and submit all the required information.

Note that you typically need to meet basic requirements, like being 18 years old and a U.S. citizen. You may also need to provide relevant information, such as your Social Security number, for tax purposes. The process is usually straightforward and typically takes less than 20 minutes if you meet the requirements.

Research potential investments

Once you have a firm grasp on your investment goals, it’s time to start researching funds that might help you meet those goals. If you’ve already signed up at your broker of choice, many of these companies have mutual fund research tools to make it easy to find the information you need.

When researching mutual funds, a few factors can help you find the best choices:

  • Fund mission or theme. One of the most basic things to consider is what the fund aims to do and how it selects its investments. For instance, some funds invest in specific industries, while S&P 500 funds invest in approximately the 500 largest companies by market cap. The fund’s mission should align with your investment goals and needs.
  • Past performance. As they say, past performance doesn’t guarantee future performance, but it can give you an idea of whether the fund is meeting its goals. For example, some funds aim to beat a particular stock index. If a fund hasn’t done that for the past several years, it may not be the best choice.
  • Fees. Mutual funds can have various fees, such as load fees and expense ratios. Fees tend to be higher for actively managed funds. The average mutual fund expense ratio for equity funds was 0.44% in 2022, according to the Investment Company Institute, so for cost-conscious investors, it’s best to look for funds at or below that number.

Remember to consider more than just the numbers when researching different mutual funds. Consider how the fund aligns with your investment goals and fits into your larger investment strategy.

Many mutual fund brokers are available, from online brokers to full-service human brokers and financial planners. Each may have different fee structures, with some human financial planners charging high fees.

“My advice: look for a fee-only planner who doesn’t earn commissions,” said Jason Weckerly, a certified financial planner at Montgomery Wealth Management.

Robo-advisor vs. online broker

Many fintech companies and, increasingly, established financial institutions offer robo-advisors to help people manage their investments. Robo-advisors use algorithms to manage investment portfolios, using customers’ inputs about their income, risk tolerance and time horizon to build custom portfolios. These platforms offer active management of your investments without human intervention, resulting in lower fees than human investment advisors typically charge.

Robo-advisors are a happy medium between self-directed investing and full-service brokers. While their fees can be lower than a full-service broker might charge, you can achieve even lower fees by investing in index funds in a self-directed investment account. Still, robo-advisors typically charge lower fees than mutual funds.

» MORE: What is a good investment?

What makes a good mutual fund broker?

Choosing a mutual fund broker is not a decision to take lightly, as it will influence everything from available investments to customer service. Some of the main things to consider are the broker's investment selection, fees, and other important features.

One of the most important things to consider is investment selection. Look for brokers that offer a variety of mutual funds, including no-load funds, index funds and actively managed funds. This will give you a wide range of investment choices, allowing your portfolio to change and evolve alongside your investment goals.

Also, take a look at the broker’s research and educational tools. Some brokers offer extensive libraries of educational tools and stock screeners. Knowledge is power – having more information at your fingertips will allow you to make better investment decisions.

Finally, there are other important considerations, such as customer service reputation, user experience, mobile apps and availability of investment advice. Brokers can vary greatly in these areas, with some faring much better than others. Investigate these areas for each broker before signing up.

Mutual fund costs and fees

Many online brokers allow you to open an account with no requirement to deposit a minimum amount. However, to purchase shares in a mutual fund, you often need a minimum investment ranging from $500 to $3,000. A few mutual funds exist with $0 investment minimums. In either case, you can generally contribute as much or as little as you want once you meet the initial investment minimum.

Some of the fees you might have to pay when investing in mutual funds include:

  • Expense ratios. This fee is a percentage of your investment and covers the fund's operating expenses, including management fees, administrative costs and marketing. Expense ratios range from 0% to 2% or even more for actively managed funds. The lower the expense ratio, the more money you'll have to reinvest.
  • Sales loads. These are upfront fees you pay when you purchase shares in a fund. Typically, these fees range from 2% to 5% of your investment.
  • Account maintenance fees. Some brokers charge account or inactivity fees, which are often flat rates. These fees are the same, regardless of which funds or other assets you hold.
  • Redemption fees. Brokers sometimes charge fees when you sell shares within a certain period, such as within the first few months of investing. While not all brokers charge these fees, having them on your radar is a good idea.

Depending on the broker, you may pay more or fewer fees. These can enormously impact the funds you receive, so it’s crucial to know what fees you might pay ahead of time.

“Though no-load funds are by far the most widely utilized choice, you’d be surprised at how many clients are brand loyal and pay as much as 5% upfront to buy a loaded fund,” said Weckerly.

Pros and cons of mutual funds


  • Diversification: Mutual funds offer easy risk reduction, as a single investment lets you invest in hundreds or thousands of stocks or bonds.
  • Portfolio management: Self-directed investors may spend hours wading through financial statements; mutual funds do most of this work for you.
  • Affordability: Single shares of some stocks can have price tags in the thousands or even hundreds of thousands. Conversely, mutual funds often let you start investing for $500 or less.


  • Fees: Mutual funds may charge a lot of fees; this is especially true for actively managed funds. Fees reduce returns for investors.
  • Risk: Although mutual funds can be less risky than individual stocks, equity mutual funds can be riskier than investments like Treasury bills or bonds.
  • Lack of control: While investors often appreciate the professional portfolio management of mutual funds, you don’t have any control over the investment selections. This might be a downside if you don’t agree with the fund manager’s decisions.

Mutual Funds FAQ

How much does a mutual fund cost?

Companies managing mutual funds charge an annual fee that may be 0.5% to 2.5% of your investment in the fund. They may charge other fees as well. Some mutual funds add a sales charge to their fees. These fees are load funds and may represent a percentage of the new money you add to the fund or the money you withdraw from the fund. Many financial professionals recommend "no-load" mutual funds, which don’t require a load fund that could cut into your returns.

How much money is required to invest in a mutual fund?

Mutual funds set their own minimum investment amount. They may impose a minimum for first-time buyers, and funds with lower expense ratios may require a higher initial investment. While exchange-traded funds (ETFs) don't have minimum investment amounts, they charge fees for trades.

Can you make money from a mutual fund?

Yes, although no investment return is guaranteed, no matter which investment vehicle you choose. There are three ways to make money with mutual funds:

  • Interest on bonds and dividends on stocks: Mutual funds pass money earned on stocks and bonds to investors.
  • Capital gains: Many funds pass capital gains, or the increase in the price of securities, on to their investors.
  • Fund holdings price increases: Investors can choose to sell their shares of a fund for a profit.
What is the difference between index funds and managed mutual funds?

Both investment types let you invest without choosing individual stocks. The major difference between index funds and managed mutual funds is their earning potential and how they’re managed.

Index funds represent a pool of investments that mirror a market index (Dow Jones Industrial Average, S&P 500 or Nasdaq composite). When the market index produces gains, the index funds also produce gains.

A mutual fund invests in a number of assets (stocks and bonds), and investors can purchase shares of the fund. Mutual funds are monitored by professionals who regularly buy and sell trades inside the fund to maximize potential gains. The value of your investment in a mutual fund rises and falls with the overall fund's performance.

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