BEST OF

10 Best Brokers for Mutual Funds of October 2021

Kevin VoigtOct 8, 2021

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Mutual funds are the investing world’s two-for-one: a single investment product with built-in diversification. They are a great tool for long-term investors who want a diversified portfolio composed of a collection of investments, versus a long list of individual stocks or bonds to keep track of.

Right now is a particularly good time to be a mutual fund investor. Many of the once-pricier players have slashed or completely done away with fund investment minimums. Fidelity has gone so far as to cut management fees to the bone, rolling out a few zero-fee index funds. And the number of no-transaction-fee mutual funds — funds you can invest in without paying any commission whatsoever — continues to grow at many providers.

It’s becoming a tight race to the top for discount brokers and robo-advisors that serve fund investors. All of the providers here offer a range of low-cost funds and resources to effectively manage your portfolio. To help narrow the field, here’s NerdWallet’s roundup of top brokers and robo-advisors for mutual fund investors.

Summary of Best Brokers for Mutual Funds of October 2021

Our picks for

Hands-On Investors

E*TRADE
Learn more

on E*TRADE's website

E*TRADE

4.5

NerdWallet rating 
E*TRADE

Fees

$0

per trade

Account Minimum

$0

Promotion

Get $600 or more

when you open and fund an E*TRADE account with code: BONUS21

Learn more

on E*TRADE's website


Promotion

Get $600 or more
when you open and fund an E*TRADE account with code: BONUS21

Why we like it

E*TRADE has long been one of the most popular online brokers. The company's $0 commissions and strong trading platforms appeal to active traders, while beginner investors benefit from a large library of educational resources.

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
TD Ameritrade
Learn more

on TD Ameritrade's website

TD Ameritrade

5.0

NerdWallet rating 
TD Ameritrade

Fees

$0

per trade

Account Minimum

$0

Promotion

None

no promotion available at this time

Learn more

on TD Ameritrade's website


Promotion

None
no promotion available at this time

Why we like it

TD Ameritrade meets the needs of both active traders and beginner investors with quality trading platforms; $0 commissions on online stock, options and ETF trades; and a large selection of mutual funds.

Pros

  • Commission-free stock, ETF and options trades.

  • Free research.

  • High-quality trading platforms.

  • No account minimum.

  • Good customer support.

  • Large investment selection.

Cons

  • No fractional shares.

Read Full Review
Fidelity
Learn more

on Fidelity's website

Fidelity

5.0

NerdWallet rating 
Fidelity

Fees

$0

per trade for online U.S. stocks and ETFs

Account Minimum

$0

Promotion

None

no promotion available at this time

Learn more

on Fidelity's website


Promotion

None
no promotion available at this time

Why we like it

Fidelity offers $0 trading commissions, a selection of more than 3,700 no-transaction-fee mutual funds and top-notch research tools and trading platform. Its zero-fee index funds and strong customer service reputation are just icing on the cake.

Pros

  • Commission-free stock, ETF and options trades.

  • Large selection of research providers.

  • Strong customer service.

  • Expense-ratio-free index funds.

  • Highly rated mobile app.

Cons

  • Relatively high broker-assisted trade fee.

Read Full Review
Interactive Brokers IBKR Lite
Learn more

on Interactive Brokers's website

Interactive Brokers IBKR Lite

5.0

NerdWallet rating 
Interactive Brokers IBKR Lite

Fees

$0

per trade

Account Minimum

$0

Promotion

None

no promotion available at this time

Learn more

on Interactive Brokers's website


Promotion

None
no promotion available at this time

Why we like it

Interactive Brokers' IBKR Lite is a strong option for frequent traders: The broker offers international trade capabilities, no stock-trading commission and a quality trading platform.

Pros

  • Large investment selection.

  • Strong research and tools.

  • Over 7,000 no-transaction-fee mutual funds.

  • NerdWallet users who sign up for IBKR Pro get a 0.25 percentage point discount on margin rates.

Cons

  • Website is difficult to navigate.

Read Full Review
J.P. Morgan Self-Directed Investing
Learn more

on J.P. Morgan's website

J.P. Morgan Self-Directed Investing

4.0

NerdWallet rating 
J.P. Morgan Self-Directed Investing

Fees

$0

per trade

Account Minimum

$0

Promotion

None

no promotion available at this time

Learn more

on J.P. Morgan's website


Promotion

None
no promotion available at this time

Why we like it

J.P. Morgan Self-Directed Investing is a clear-cut investment platform that is great for beginners looking to learn how to buy and sell investments. More advanced investors, however, may find it lacking in terms of available assets, tools and research. INVESTMENT PRODUCTS: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Pros

  • Easy-to-use platform.

  • $0 commissions.

  • App connects all Chase accounts.

  • No account minimum.

Cons

  • Limited tools and research.

  • Portfolio Builder tool requires $2,500 balance.

Read Full Review

Want to compare more options? Here are our other top picks:

Disclosure: The author held no positions in the aforementioned securities at the time of publication.

Last updated on October 8, 2021

You may also like these

People often identify opening a savings account as their next money move.

Marcus by Goldman Sachs Online Savings Account

4.5

NerdWallet rating 
Marcus by Goldman Sachs Online Savings Account

APY

0.50%
With $0 minimum balance

Bonus

N/A

at Marcus by Goldman Sachs, Member FDIC

American Express® High Yield Savings Account

4.5

NerdWallet rating 
American Express® High Yield Savings Account

APY

0.40%
With $1 minimum balance

Bonus

N/A

at American Express National Bank, Member FDIC

Axos Bank® High Yield Savings

4.0

NerdWallet rating 
Axos Bank® High Yield Savings

APY

0.61%
With $0 minimum balance

Bonus

N/A

at Axos Bank®, Member FDIC

Methodology

NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers and robo-advisors by assets under management, along with emerging industry players, using a multifaceted and iterative approach. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs.

DATA COLLECTION AND REVIEW PROCESS

We collect data directly from providers, and conduct first-hand testing and observation through provider demonstrations. Our process starts by sending detailed questionnaires to providers to complete. The questionnaires are structured to equally elicit both favorable and unfavorable responses from providers. They are not designed or prepared to produce any predetermined results. The questionnaire answers, combined with product demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

RATING FACTORS

Evaluations vary by provider type, but in each case are based upon the weighted averages of factors that include but are not limited to: advisory and account fees, account minimums and types, investment selection, investment expense ratios, trading costs, access to human financial advisors, educational resources and tools, rebalancing and tax minimization options, and customer support including branch access, user-facing technology and mobile platforms.

Each factor can involve evaluating various sub-factors. For instance, when gauging the investment selections offered by robo-advisors, 80% of the score is based on the potential for diversification (how well-diversified a resulting portfolio of investments could be) combined with the availability of specialty portfolios and level of customization for investors. Expense ratios form an additional 10% of the score, and low or no management fee the remaining 10%.

FACTOR WEIGHTINGS

The weighting of each factor is based on our team’s assessment of which features are the most important to consumers and which ones impact the consumer experience in the most meaningful way. The factors considered, and how those factors are weighted, change depending upon the category of providers reviewed.

Provider categories include: Best Brokers for Stock Trading, Best Brokers for Beginners, Best Brokers for Day Trading, Best Brokers for Options Trading, Best Discount Brokers, Best Brokers for Free Trading, Best Investment Apps, Best Brokers for Penny Stocks, Best IRA Brokers, Best Robo-Advisors, Best Financial Advisors, Best Real Estate Platforms, Best Brokers for ETFs and Best Brokers for Mutual Funds.

INFORMATION UPDATES

Writers and editors conduct our broker and robo-advisor reviews on an annual basis but continually make updates throughout the year. We maintain frequent contact with providers and highlight any changes in offerings.

THE REVIEW TEAM

The review team comprises seasoned writers, researchers and editors who cover stocks, bonds, mutual funds, index funds, exchange-traded funds, alternative investments, socially responsible investing, financial advisors, retirement and investment strategy on a daily basis. In addition to NerdWallet, the work of our team members has been published in The New York Times, The Washington Post, Forbes, USA Today, Bloomberg News, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets.

The combined expertise of our Investing team is infused into our review process to ensure thoughtful evaluations of provider products and services from the customer perspective. Our writers and editors combine to have more than 70 years of deep experience in finance, ranging from a former Wall Street Journal reporter to a former senior financial advisor at Merrill Lynch.

CONFLICTS OF INTEREST

While NerdWallet does have partnerships with many of the reviewed providers, we manage potential conflicts of interest by maintaining a wall between our content and business operations. This wall is designed to prevent our writers and the review process from being influenced or impacted by our business partnerships. This way, all reviews can provide an unbiased review that serves the interests of our users. For more information, see NerdWallet’s editorial guidelines.

To recap our selections...

NerdWallet's Best Brokers for Mutual Funds of October 2021

Frequently asked questions