A:

Mutual funds offer consumers a great way to access a professionally-managed group of assets at a relatively low cost, with reasonable annual expenses. Mutual funds can be purchased in any investment account, such as an IRA, which can be opened with many different financial institutions, including banks.

Banks don't generally specialize in investing since they are more about savings, day-to-day financial transactions and loans. That means that a bank might have a more limited pool of mutual fund families - multiple funds managed by the same company - for their customers to choose from.

Also, not every mutual fund is the same as another. This makes it important to have a wide variety of funds to choose from, which could be an issue depending on your bank. For example, mutual funds can be tailored to many different priorities and investment styles; some are "green," meaning that the underlying investments are ecologically-friendly companies and inventions, some have no fees and so on.

On the other hand, a bank may have lower account balance requirements than a brokerage firm, making investing a real possibility for more individuals. In some instances, a brokerage firm may have a satellite branch in a bank, allowing customers a full range of mutual fund families and other investments within their favorite branch.

RELATED FAQS
  1. How do I judge a mutual fund's performance?

    Evaluate mutual fund performance utilizing resources such as Morningstar; compare the fund with others in its peer group ... Read Answer >>
  2. How much of a company's stock can a mutual fund own?

    There is no written rule that stipulates how much of a company a mutual fund can own. Instead, there are two major factors ... Read Answer >>
  3. Why would a person choose a mutual fund over an individual stock?

    There are a number of reasons why an individual may choose to buy mutual funds instead of individual stocks. The most common ... Read Answer >>
Related Articles
  1. Financial Advisor

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  2. Investing

    The Benefits of Picking Mutual Funds Over Individual Stocks

    Learn about the advantages of investing in mutual funds rather than individual stocks, including the benefits of affordability, oversight and diversification.
  3. Financial Advisor

    How to Rate Your Mutual Fund Manager

    What to really look for when you're deciding on a mutual fund.
  4. Investing

    Looking to Buy Mutual Funds Online? Here Is How

    Learn how to buy mutual funds online; discover which websites offer mutual fund trading services, how to choose a fund and typical fees.
  5. Financial Advisor

    Mutual Funds: How Many is Too Many? (VTSMX, VBMFX)

    How many mutual funds are too many when it comes to a well diversified portfolio?
  6. Investing

    Mutual Fund Basics Tutorial

    Learn about the basics - and the pitfalls - of investing in mutual funds.
  7. Financial Advisor

    An Introduction To Mutual Funds

    Mutual funds are the starting point for many individual investors because they offer a balanced portfolio in a single investment. Find out how mutual funds work and whether they are the investment ...
  8. Investing

    Mutual Funds Are Awesome - Except When They're Not

    This investment is very popular, but that doesn't mean it comes without risk.
RELATED TERMS
  1. Pooled Funds

    Funds from many individual investors that are aggregated for ...
  2. Mutual Fund Custodian

    A trust company, bank or similar financial institution responsible ...
  3. Mutual Fund Yield

    Dividend payments divided by the value of a mutual fund’s shares. ...
  4. Mutual Fund Timing

    A legal, but frowned-upon practice, whereby traders attempt to ...
  5. Closed Fund

    A mutual fund that has been closed - either temporarily or permanently ...
  6. Forward Pricing

    A Securities and Exchange Commission regulation that requires ...
Hot Definitions
  1. Leverage

    1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. ...
  2. Trumponomics

    Trumponomics is a term for the economic policies of President Donald Trump.
  3. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
  4. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  5. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  6. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
Trading Center