Best Discount Broker for Mutual Funds?

Is it true that if I only buy/trade no commission no load mutual funds, using a Fidelity account will be free? I like their research functionalities. What other service fees should I watch out for? or if there's any other online broker that's better for mutual funds? Thanks.

You're partially right. If you have a fidelity account and you buy funds that fidelity doesn't charge a fee for, and the fund is also no load, there is no fee at all.

However, when you look at mutual funds, they all have 12-b1 fees which can range up to 2 % annually, so look at their statements. Some have backend fees, too.

Vanguard traditionally has the lowest 12b1 fees in the industry, and you can open an account there for free too (as long as you meet the minimum requirements of an account).

Many funds also have fees if you take the proceeds out before 90 or 180 days, because the day traders in the mutual funds were killing them - so see how long you have to keep the investment in. The biggest problem with that is if you get a mutual fund distribution, that distributed is based on the day you get it, so if you buy $1,000 of Windsor II fund on january 1, 2006, hold it for 11 months, and then get a $100 distribution on December 1, 2006, the "penalty" for holding before the 90 day requirement is applied to the $100 distribution.

Also, look at when the distributrion dates are, and don't buy before a distribution. Almost all mutual funds do distributions, Reagan signed that in to law in 1986, but you end up paying taxes on a gain that you don't really have, becuase you just end up with more shares at a lower price.

i use scottrade.com

check out their no commission fee funds first before
signing up. they used to have a lot, now not that many.

look at this:

http://www.bernanke.cn/what-is-a-mutual-...

maybe it will help you.