With thousands of mutual funds on the market, how do you decide which fund to buy? Looking into the future and the fees that can erode long-term returns is good way to sift through your choices. That’s where this mutual fund calculator can help.
How to use the mutual fund calculator
- Enter an initial investment amount.
- Next, enter an annual contribution if you plan (as experts advise) to make regular new investments. Many mutual funds have minimum initial investments, but brokers often will waive that minimum if you make monthly deposits.
- Add how many years you plan to stay invested in the fund. The longer the time horizon, the greater the potential returns.
- Input an estimated annual return for the mutual fund. (You can find the fund’s historical performance online, but remember — past performance does not guarantee future results.)
- Finally, add the annual fees, known as the mutual fund’s expense ratio. Lower fees means more of your cash will stay invested for potential long-term growth.
An important note: This calculator presumes you are shopping only for no-load, no-transaction-fee funds — mutual funds that don’t charge a sales commission or fees for purchase or sale of shares. (You can read more about mutual fund fees here).
Before you buy a mutual fund (or any investment), you’ll need to have a brokerage account. Opening an account is simple, but you have a few choices to make: Learn more from this primer on how to open a brokerage account.
Ready to start investing?
Here are some picks from our roundup of the best brokers for mutual-fund investors. These providers are especially notable for being low on fees.
Want more options? See our picks for the best brokers for mutual funds
More questions? We have answers:
- Unsure exactly what mutual funds do? Read about what mutual funds are and how they help build your investment portfolio.
- Curious about what else to consider? Learn more from this guide on how to invest in mutual funds.
- What about index funds? Understand the difference between mutual funds and index funds.
- Want to buy stocks instead? Learn how to trade stocks with these step-by-step instructions.