Have Dime, Will Invest!

March 20, 2008 8:21 PM

Looking for Mutual Funds/Investments with low initial investment fees.

I will soon be in a position to begin investing in mutual funds and IRA's. I feel like a little kid and would like to start next week. Some funds I have looked at are asking for an initial $3,000.00 investment. Are there mutual funds or IRA that ask for lower initial deposits, say in the $200 - $300 range......and are they solid companies?

posted by goalyeehah to work & money (9 comments total)

Look at Vanguard, for starters. The majority of their funds are no load and with very low annual fees. You could consider an Index 500 fund that tracks the S and P as a whole.
posted by docpops at 8:29 PM on March 20, 2008

It depends on the fund. If you have a brokerage account you can probably screen for no-load funds. Some will let you invest $200 - $300 if you make monthly investments (say $50 a month). IRAs can be funded with however much cash you want up to a certain limit (probably $4000). You can invest your IRA however you'd like.

If you are concerned about initial investment amounts, you may want to look at ETFs and Spiders. As an example, EEM invests in emerging markets, SPY tries to replicate the S&P 500.
posted by Frank Grimes at 8:33 PM on March 20, 2008

I am talking about investing around $800/$1,200 per month. The $200/$300 is a weekly rate.
posted by goalyeehah at 8:48 PM on March 20, 2008

ETFs are not a bad idea... you could buy them through Sharebuilder or ScotTrade.
posted by kindall at 8:54 PM on March 20, 2008

I have personally invested in UMEMX, and ITHAX (but looking back, it's too expensive...), both with $1,000 initial investments in IRAs.

The other thing to look at is a direct-deposit method, since if you guarantee money is going in, often the minimum is much lower.

The other option is using something like ShareBuilder, and buying ETFs. They have lower fees in general, but you incur the cost of buying them in the first place, making them a wash.

Also, the Vanguard funds are great, and most have a $3000 minimum. A month or two of saving in a savings account gives you that. That's also a great strategy.
posted by cschneid at 9:03 PM on March 20, 2008

Fidelity SimpleStart IRA. $200 a month. Fidelity funds are excellent - go nuts.
posted by ikkyu2 at 10:18 PM on March 20, 2008 [1 favorite]

Charles Schwab has a selection of no-transaction-fee, no-load funds (they call it "OneSource") that includes a number of reasonable index funds. The Schwab-branded index funds have $100 minimums. And you should be able to open an IRA with no account fees and an opening minimum of $1000. The annual expense fees on the Schwab index funds are higher than the comparable Vanguard funds, but it appears that most Vanguard funds have a $3,000 initial minimum.

The problem with ETFs is that you'd have to pay transaction fees each time you invest. You might be able to minimize these fees with something like ShareBuilder, but Vanguard, Schwab or Fidelity may be simpler and cheaper.
posted by mullacc at 7:45 AM on March 21, 2008

Er, to clarify: you'd have to fund the Schwab IRA with $1,000, but you can invest the money $100 at a time in their index funds.
posted by mullacc at 7:47 AM on March 21, 2008

This Morningstar article on good funds with low minimums is 8 years old, but I think it's worth a look. Here's a newer one on best entry-levels funds, from 2005. (Free registration may be required; Morningstar is worth worth it.)
posted by pmurray63 at 7:08 PM on March 21, 2008