BEST OF
10 Best Brokers for Mutual Funds of April 2021
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.
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 April 2021
Broker | NerdWallet Rating | Commissions | Promotion | Account Minimum | Learn More |
---|---|---|---|---|---|
Best for Hands-On Investors | $0 per trade | None no promotion available at this time | $0 | on TD Ameritrade's website | |
Best for Hands-On Investors | $0 per trade | None no promotion available at this time | $0 | on E*TRADE's website | |
Best for Hands-On Investors | $0 per trade | Unlimited commission-free online stock, ETF, fixed income, mutual fund, and options trades when you open an account. | $0 | on J.P Morgan's website | |
Best for Hands-On Investors | $0 per trade | None no promotion available at this time | $0 | on Interactive Brokers's website | |
Best for Hands-On Investors | $0 per trade | Up to $200 in Transfer Fee Rebates | $0 | on Firstrade's website |
Our picks for
Hands-On Investors
on TD Ameritrade's website
TD Ameritrade

Fees
per trade
Account Minimum
Promotion
no promotion available at this time
on TD Ameritrade's website
on E*TRADE's website
E*TRADE

Fees
per trade
Account Minimum
Promotion
no promotion available at this time
on E*TRADE's website
on J.P Morgan's website
J.P. Morgan Self-Directed Investing

Fees
per trade
Account Minimum
Promotion
commission-free online stock, ETF, fixed income, mutual fund, and options trades when you open an account.
on J.P Morgan's website
on Interactive Brokers's website
Interactive Brokers IBKR Lite

Fees
per trade
Account Minimum
Promotion
no promotion available at this time
on Interactive Brokers's website
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 April 16, 2021
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 April 2021
- TD Ameritrade: Best for Hands-On Investors
- E*TRADE: Best for Hands-On Investors
- J.P. Morgan Self-Directed Investing: Best for Hands-On Investors
- Interactive Brokers IBKR Lite: Best for Hands-On Investors
- Firstrade: Best for Hands-On Investors
- Ally Invest: Best for Hands-On Investors
- Vanguard: Best for Hands-On Investors
- Fidelity: Best for Hands-On Investors
- Merrill Edge: Best for Hands-On Investors
- Charles Schwab: Best for Hands-On Investors
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.
Read our full mutual fund explainer for more details.
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, 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.
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.)
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.