You have many choices in how you purchase mutual funds. In addition to purchasing directly from the mutual fund company, you can purchase mutual funds through registered representatives of banks, trust companies, stockbrokers, discount brokers, and financial planners. To purchase mutual funds via the Internet, go to an online broker’s Web site. (I list a few examples later in this section.)
Register by completing the online application form. You have to provide the same information you normally provide for opening an online brokerage account.
The Internet is constantly changing, so check out the online brokerage’s latest rates, new special mutual fund purchase programs, and brokerage statement download capabilities before sending in your application for a trading account.
To have a fully functioning account, brokerages are required to have your signature on file. After they have your signature on file, you can buy or sell as much as you want.
After you open your account, log on to the Internet, go to your brokerage Web site, and enter orders by completing the online form. Access your account at any time and monitor your investments by using online news or quote services.
Some of the online brokers in the following list are often called mutual fund shopping centers because of the wide variety of mutual funds they carry. For example, you can find funds that have no transaction fees, no-load funds, and front- or back-loaded funds.
Charles Schwab (www.schwab.com) transaction fees vary based on the funds you select. The minimum deposit required to open an account is $10,000.
TD Waterhouse (www.waterhouse.com) requires a $1,000 initial deposit. While selected mutual funds carry no transaction fees, other mutual funds are $24.00 per trade.
E-TRADE (www.etrade.com) offers some no-transaction-fee mutual funds and charges $24.95 commission on other mutual fund trades. E-TRADE has a unique feature — rebates on Rule 12b-1 fees. The minimum deposit to open an account is $1,000.
By Jessica Serol
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