Where To Buy Mutual Fund?

Most people are turning in to investors as they try to derive maximum out of the money available with them but very few know where to buy mutual funds. It is possible to buy them from various sources but it is better to know more about such sources and their fees before moving ahead. The various sources and their distinguishing features are enumerated below.

Banks

It is not advisable to buy mutual funds from a bank as they sell loaded funds. A load means that a sales charge has to be paid to the seller of the fund. This ranges from 4% to 8% of the money invested and you can well imagine that if you have to pay 8% extra at the time you buy, it might take you more than a year to earn that 8% just to break even and then only you can hope to get some return. Also, while buying from a bank, you would have to pay either an entry load or an exit load. Moreover, you will not get a wide spectrum of investment opportunities if you deal with a bank. Banks also lack suitable investment advisors who can provide pertinent information regarding the various funds and their merits and demerits.

Insurance Companies

You should not buy mutual fund through an insurance company as they do not sell directly and often combine other products along with the funds. These combinations are usually unit-linked products. Moreover, the funds sold by insurance companies are also loaded as in the case with banks, with many disadvantages.

Investment Advisors And Stock Brokers

These groups should be approached with caution as the funds sold by them are usually heavily loaded with high entry or exit costs. Some investment advisors might try to sell you a no-load fund but his financial services will carry high fees.

Discount Stock Brokers

You can buy mutual fund from these brokers as they are registered with various companies. Moreover, they provide various options without any load. You should choose them over the mutual fund companies as they have knowledge and expertise in this field and offer valuable advice to the investors as per their specific investment needs.

Mutual Fund Companies

If you approach these companies, you will not be charged any transaction fees. This should be one of your preferred options.

Basically, you need to find out the sources from where you can buy without having to pay any load charges whether front-end or back-end. Today many companies are offering a wide range of no-load mutual funds in every investment class that you can imagine. But you must read the fine print before investing your money.