Best of

11 Best Brokers for Mutual Funds 2019

Kevin VoigtOctober 18, 2019

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Our pick for

No-fee funds

E-Trade

on E-Trade's website

on E-Trade's website

Fees

$0

per trade

Account Minimum

$0

Promotion

Up to $600

cash credit with a qualifying deposit

Pros

  • Easy-to-use tools.
  • Large investment selection.
  • Excellent customer support.
  • Access to extensive research.
  • Advanced mobile app.
  • Commission-free stock, options and ETF trades.

Cons

  • Website can be difficult to navigate.
Read full review

Our picks for

Fund research and tools

TD Ameritrade

on TD Ameritrade's website

on TD Ameritrade's website

Fees

$0

per trade

Account Minimum

$0

Promotion

Up to $600

cash credit with qualifying deposit

Pros

  • Commission-free stock, ETF and options trades.
  • Free research.
  • High-quality trading platforms.
  • No account minimum.
  • Good customer support.
  • Large investment selection.

Cons

  • Costly broker-assisted trades.
  • High short-term ETF trading fee.
Read full review
Fees

$19.95

per trade

Account Minimum

$2,500

Promotion

None

no promotion available at this time

Pros

  • Low-fee mutual funds.
  • Fund screening tools.
  • Free retirement investing tools.

Cons

  • Pricey commissions.
  • High account minimums.
Read full review

Our pick for

Hands-off investing

Betterment

on Betterment's website

on Betterment's website

Fees

0.25%

management fee

Account Minimum

$0

Promotion

Up to 1 year

of free management with a qualifying deposit

Pros

  • No account minimum.
  • Fractional shares limit uninvested cash.
  • Robust goal-based tools.

Cons

  • No direct indexing.
Read full review

Our picks for

Socially conscious investing

Fees

0.40% - 0.50%

management fee

Account Minimum

$0

Promotion

$10,000

amount of assets managed for free for one year

Pros

  • Access to human advisers.
  • Free portfolio analysis.
  • Socially responsible investment options.
  • No account minimum.

Cons

  • Higher account management fees.
  • Limited personal finance tools.
Read full review
Fees

0.30%

management fee

Account Minimum

$5,000

Promotion

None

no promotion available at this time

Pros

  • Low investment expense ratios.
  • Competitive management fee.
  • Niche account types.
  • Morningstar-built portfolios.

Cons

  • Small portfolios.
  • No tax-loss harvesting.
Read full review

Summary of Best Brokers for Mutual Funds 2019

BrokerCommissionsPromotionAccount MinimumLearn More
Vanguard Brokerage Logo

Vanguard Brokerage

$7.00

per trade

None

no promotion available at this time

$0

Read review
Fidelity Brokerage Logo

Fidelity Brokerage

$0

None

No promotion available at this time

$0

Read review
Schwab Brokerage Logo

Schwab Brokerage

$0

per trade

None

No promotion at this time

$0

Read review
E-Trade Logo

E-Trade

on E-Trade's website

$0

per trade

Up to $600

cash credit with a qualifying deposit

$0

on E-Trade's website

TD Ameritrade Logo

TD Ameritrade

on TD Ameritrade's website

$0

per trade

Up to $600

cash credit with qualifying deposit

$0

on TD Ameritrade's website

T. Rowe Price Logo

T. Rowe Price

$19.95

per trade

None

no promotion available at this time

$2,500

Read review
Betterment Logo

Betterment

on Betterment's website

0.25%

management fee

Up to 1 year

of free management with a qualifying deposit

$0

on Betterment's website

Vanguard Personal Advisor Services Logo

Vanguard Personal Advisor Services

0.30%

management fee

None

no promotion currently offered

$50,000

Read review
Wealthsimple Logo

Wealthsimple

0.40% - 0.50%

management fee

$10,000

amount of assets managed for free for one year

$0

Read review
TD Ameritrade Essential Portfolios Logo

TD Ameritrade Essential Portfolios

0.30%

management fee

None

no promotion available at this time

$5,000

Read review
Ally Invest Logo

Ally Invest

$0

per trade

$50 - $3,500

in cash bonus with qualifying deposit.

$0

Read review
BrokerCommissionsPromotionAccount MinimumLearn More
Vanguard Brokerage Logo

Vanguard Brokerage

$7.00

per trade

None

no promotion available at this time

$0

Read review
Fidelity Brokerage Logo

Fidelity Brokerage

$0

None

No promotion available at this time

$0

Read review
Schwab Brokerage Logo

Schwab Brokerage

$0

per trade

None

No promotion at this time

$0

Read review
E-Trade Logo

E-Trade

on E-Trade's website

$0

per trade

Up to $600

cash credit with a qualifying deposit

$0

on E-Trade's website

TD Ameritrade Logo

TD Ameritrade

on TD Ameritrade's website

$0

per trade

Up to $600

cash credit with qualifying deposit

$0

on TD Ameritrade's website

T. Rowe Price Logo

T. Rowe Price

$19.95

per trade

None

no promotion available at this time

$2,500

Read review
Betterment Logo

Betterment

on Betterment's website

0.25%

management fee

Up to 1 year

of free management with a qualifying deposit

$0

on Betterment's website

Vanguard Personal Advisor Services Logo

Vanguard Personal Advisor Services

0.30%

management fee

None

no promotion currently offered

$50,000

Read review
Wealthsimple Logo

Wealthsimple

0.40% - 0.50%

management fee

$10,000

amount of assets managed for free for one year

$0

Read review
TD Ameritrade Essential Portfolios Logo

TD Ameritrade Essential Portfolios

0.30%

management fee

None

no promotion available at this time

$5,000

Read review
Ally Invest Logo

Ally Invest

$0

per trade

$50 - $3,500

in cash bonus with qualifying deposit.

$0

Read review

What is a mutual fund?

Mutual funds pull together two things — money from multiple investors, and stocks, bonds or other assets. Investors buy shares in the fund, and their money is then pooled to purchase investments that align with the fund’s goal.

For investors, mutual funds are a convenient way to instantly diversify even small amounts of money. You might not be able to afford to purchase a share of each individual investment in a mutual fund — these funds often hold 100 investments or more. Even if you could afford it, buying would take time and incur multiple transaction fees.

Read our full mutual fund explainer for more details.

How much does a mutual fund cost?

That depends on the type of mutual fund you choose. Actively managed mutual funds employ a professional to invest and manage the fund’s assets. That costs more than a passively managed fund, such an index fund, which skips the fund manager and instead selects its investments by copying a benchmark, like the S&P 500. An S&P 500 index fund aims to mirror the performance of the benchmark index.

In either case, keeping wealth-eroding fees at bay requires guarding against both high brokerage account fees and the costs that come with mutual funds themselves. There are three common expenses associated with mutual funds:

  • Transaction fees: Charged on the purchase or sale of the fund — and in some cases, on both. Select a broker with a long list of no-transaction-fee mutual funds — like many of the ones we’ve recommended above — to avoid this cost.
  • Early redemption fees: Charged by a broker for selling out of a fund in the first 60 to 90 days. Aim to hold your mutual funds as a long-term investment.
  • Expense ratios: This charge comes from the fund itself. It’s an annual fee that is often higher on actively managed funds than passively managed funds. Expense ratios are expressed as a percentage of your investment: A fund with a 1% expense ratio will cost $10 a year for every $1,000 you invest. You can’t avoid expense ratios, but you can steer your money toward low-cost funds. Familiarizing yourself with the average mutual fund expense ratios will help you recognize if you’re paying too much.

How do you invest in mutual funds?

You can buy mutual funds at any online broker or directly through a fund company, such as BlackRock or American Funds. We have some specific instructions about investing in mutual funds to help guide you. In general, online brokers will offer a larger and more diverse fund selection than direct purchase through a fund company.

If you don’t have an individual retirement account or brokerage account, you’ll need to open one. You can do that through any of the brokers mentioned above (here's a step-by-step for how to open a brokerage account). If you have an employer-sponsored retirement plan, such as a 401(k), it likely offers access to a small selection of mutual funds as well.

How much money do you need to invest in a mutual fund?

You’ll generally face two minimums: A brokerage account minimum, which typically falls between $0 and $2,500, and the mutual fund minimum, which may be $1,000 or more. These minimums are combined — if the broker allows you to fund an account with $1,000, you can then invest that money in a mutual fund with a minimum of $1,000.

If that’s too big of an investment, you might consider exchange-traded funds, which are a type of passive mutual fund you can buy for a share price, much like an individual stock. That often means a lower barrier to entry.

» COMPARE: Mutual funds vs. ETFs

How do you make money from a mutual fund?

As with any investment, the hope here is that the money you put in will earn a return. Mutual funds earn that return through dividends or interest on the securities in their portfolios or by selling a security that has gone up in value. In both cases, the fund typically passes those returns through to investors.

You also earn a return if the value of the mutual fund itself increases and you sell that fund for more than its purchase price.

Last updated on October 19, 2019

Methodology

NerdWallet's ratings for brokers and robo-advisors are weighted averages of several categories, including investment selection, customer support, account fees, account minimum, trading costs and more. Our survey of brokers and robo-advisors includes the largest U.S. providers by assets under management, plus notable and/or emerging players in the industry. Factors we consider, depending on the category, include advisory fees, branch access, user-facing technology, customer service and mobile features. The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

To recap our selections...

NerdWallet's Best Brokers for Mutual Funds 2019