Auto-invest every month in Etrade?

Heir

Hey H/A,

I put something like $400 a month into my Roth IRA account every month, and I typically put that money into a mutual fund (Vanguard Target Retirement 2045 - VTIVX is the symbol). However it's annoying getting hit with a $20 a month fee..that's about a 5% initial loss I take. Annoying.

Is there a way to set up an auto invest on that mutual fund? If not, are there any other funds that I can do that with?

Thanks!

Thanatos

Why are you getting hit with a $20 a month fee?

Heir

It may just be a fee from Vanguard, I'm not sure. But each month I put $400 into my Roth IRA account. Once the cash is in the account, you have to invest it in something. I choose to invest that cash into that mutual fund, and when I tell it how much to invest, I then get the notice that I'll be charged $20.

Heir

So it's not really a per month fee, it's a per trade I guess. I just do it on a monthly basis.

Deebaser

call your broker and ask him about that fee. If that is unique to that fund, stop investing in that fund. If that is the transaction fee applies to everything, move your Roth to someone who actually wants your business.

Heir

Yeah it looks like it's unique to that fund. I ended up calling them and they provided a very long list of no load, no transaction fee funds. Thanks.

Darkewolfe

Quite a few funds are structured with fees in a way to encourage only people making significant investments for long term growth. It's just a thing.

Thanatos

Yeah, alternatively, if you really liked that fund for whatever reason, you could just put that money into a savings account instead, and then move it into your Roth IRA every six months, or every year or whatever.

Heir

Thanatos wrote: »

Yeah, alternatively, if you really liked that fund for whatever reason, you could just put that money into a savings account instead, and then move it into your Roth IRA every six months, or every year or whatever.

I definitely considered that, but then that money isn't really doing something for a year...where as even with the $20 per trade fee I'm still way up due to how well the fund has done plus dividends being reinvested.

Now I just need to find a good fund that doesn't have those fees...preferably one targeted towards certain retirement years.

Djeet

Drill down into the details of the transaction and see what the fee is actually for. The only fees I see on that fund are charged yearly. I see a minimum investment amount of $1K, so you might call and ask if it's because you're investing less than $1K pre transaction.

Edit: Oh, you're buying vanguard funds via etrade. Yeah you're going to get hit with fees often.

Bowen

Eh, you're looking at something like $90 in returns over a 6 month period of time.

As opposed to $120 in fees. You're better off sitting on it for 6 months. You come out $30 ahead.

Darkewolfe

If it's just an etrade fee and you have enough cash on hand, consider rolling your IRA over into a Charles Schwab account and doing your transactions from there. They're way less into fees, but most of their account types require you to have a certain amount managed through them.

Thanatos

You should also call Vanguard and talk to one of their reps. If you're just investing in a Vanguard fund, there's no reason to go through ETrade.

EggyToast

Yeah, if this is with Vanguard, I'll echo Thanatos to just contact them directly. I'm with them on the same retirement fund (but for a traditional IRA after I did a rollover), and they are very friendly and helpful. They have a ton of resources on their website, so you may just want to ask them to point you in the right directly after they give you the details. I work with Vanguard directly, too.

Heir

I'll have to look into that thanks. The main reason I haven't done that in the past is because I keep my other brokerage accounts on Etrade. I'll give them a call (both etrade and Vanguard) to see what my options are.