Where to Buy Mutual Funds

There are many sources where it is possible to buy mutual funds. Banks, Insurance companies, brokerage houses, discount brokers and advisers, and mutual fund companies have a means of buying and selling mutual funds through them. Many people make a wrong assumption that mutual funds bought from banks are as safe as CDs, for example, which are insured by the federal government for up to $100,000, but the truth of the matter is they are not. Since it is possible to lose the whole investment, investors cannot hold the banks or anyone else responsible for any loss they might suffer, since it is an investment instruments where investors would consent in advance to be willing to take the risk of losing their total investment if things turn out to be bad.

However, such a disaster does not happen in the world of mutual funds often, as they are the safest investment vehicles around. The reason why they are safe is professionals whose livelihood depends on the good performance of the funds manage them. This means even if they will not be held responsible if they lose a huge amount of invested money, because of something that is beyond their control, they will be hit by a double whammy, one of which would be losing their own livelihood.

To come back to the banks, they always sell other company's mutual funds by making an arrangement either to give them an outlet in some of their branches where the service given will be clearly marked or the banks themselves will sell a given mutual fund families to their customers on behalf of mutual fund companies and they charge either commission or service charge that could amount from 5% to 8.5%. One reason why buyers are attracted to mutual funds sold by banks is they allow their account holding customers to start investing in a mutual fund with as low as $25 initial deposit that will be deducted from the customers' account. Some if not all mutual fund companies also have a buying plan that will start from $50 and up where some of them require up to $50,000 initial deposit.