11 Best Brokers for Mutual Funds of April 2023
Our investing team ranks the best brokers for mutual fund investing based on fund choices, cost, services and investment guidance.
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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 that serve fund investors. All of the brokers here offer a range of low-cost mutual funds and resources to effectively manage your portfolio. To help narrow the field, here’s NerdWallet’s roundup of the best brokers for mutual fund investors.
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 that serve fund investors. All of the brokers here offer a range of low-cost mutual funds and resources to effectively manage your portfolio. To help narrow the field, here’s NerdWallet’s roundup of the best brokers for mutual fund investors.
Best Brokers for Mutual Funds
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
 Fidelity Learn more on Fidelity's website | $0 per trade for online U.S. stocks and ETFs | $0 | Get $100 when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply. | Learn more on Fidelity's website | |
 Interactive Brokers IBKR Lite Learn more on Interactive Brokers' website | $0 per trade | $0 | None no promotion available at this time | Learn more on Interactive Brokers' website | |
 E*TRADE Learn more on E*TRADE's website | $0 per trade | $0 | Get up to $600 or more when you open and fund an E*TRADE account | Learn more on E*TRADE's website | |
 Merrill Edge Learn more on Merrill Edge's website | $0 per trade | $0 | Up to $600 when you invest in a new Merrill Edge® Self-Directed account. | Learn more on Merrill Edge's website | |
 TD Ameritrade Learn more on TD Ameritrade's website | $0 per trade | $0 | None no promotion available at this time | Learn more on TD Ameritrade's website |
$0
per trade for online U.S. stocks and ETFs
$0
Get $100
when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply.
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.
Why We Like It
Fidelity offers $0 trading commissions, a selection of more than 3,300 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.
$0
per trade
$0
None
no promotion available at this time
Pros
Large investment selection.
Strong research and tools.
Over 18,000 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.
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.
$0
per trade
$0
Get up to $600 or more
when you open and fund an E*TRADE account
Pros
Easy-to-use tools.
Large investment selection.
Excellent customer support.
Advanced mobile app.
Commission-free stock, options, mutual fund and ETF trades.
Cons
Website can be difficult to navigate.
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.
$0
per trade
$0
Up to $600
when you invest in a new Merrill Edge® Self-Directed account.
Pros
Robust third-party research.
Integrated with Bank of America.
Cons
Advanced traders may find fewer securities on offer.
Why We Like It
Merrill Edge offers high-quality customer service, robust research and low fees. Customers of parent company Bank of America will love the seamless, thoughtful integration, with a single login to access both accounts.
$0
per trade
$0
None
no promotion available at this time
Pros
Commission-free stock and ETF trades.
Free research.
High-quality trading platforms.
No account minimum.
Good customer support.
Large investment selection.
Cons
No fractional shares.
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 and ETF trades; and a large selection of mutual funds.
$0
per trade
$0
Get up to $700
when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money
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.
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
$0
per trade
$0
None
no promotion available at this time
Pros
Large mutual fund selection.
Commission-free stock, options and ETF trades.
Leader in low-cost funds.
Cons
Basic trading platform only.
Limited research and data.
Why We Like It
Vanguard is the king of low-cost investing, making it ideal for buy-and-hold and retirement investors. But active traders will find the broker falls short despite its $0 trade commission, due to the lack of a strong trading platform.
$0
per trade
$1
Get $250
when you open and have qualifying deposit(s) that total at least $2,000.00 within 60 days in your Axos Self-Directed Trading account.
Pros
Commission-free stock and ETF trades.
Expansive selection of low-minimum and no-transaction-fee mutual funds.
Integration with Axos Bank.
Cons
Thin investment selection.
Some features require a premium subscription.
Underwhelming educational tools.
Why We Like It
Axos Self-Directed — with its affordable trading fees and easy integration with Axos Bank — make the provider a logical pick for existing Axos customers or investors who are looking for a one-stop shop when it comes to banking and investing. However, the brokerage’s trading platform is relatively basic, and you’ll need to pay a monthly subscription to access features that often come free with other providers. Advanced, active traders may be better off relying on mainstays.
Want to compare more options? Here are our other top picks:
Last updated on March 1, 2023
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Methodology
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. 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. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with 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).
For more details about the categories considered when rating brokers and our process, read our full methodology.
To recap our selections...
NerdWallet's Best Brokers for Mutual Funds of April 2023
Frequently asked questions
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.
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, such as 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:
1. 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.
2. 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.
3. 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.
You can buy mutual funds at any online broker or directly through a fund company. 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.
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. As referenced above, many brokers now offer mutual funds with no or low minimums.
If your broker doesn't, 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.)
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.
