Vanguard has always been my favorite spot for mutual funds because of their extremely low expense ratios. However they did have an initial investment and fees for those with low balances that made them unattractive for the smaller investor. These included:

• $10 per year for index funds below $10,000
• $10 per year for all funds below $2500
• $10 per year for IRA and ESA accounts below $5000

You could be charged each of these fees on a single fund.

However effective today Vanguard has eliminated all these fees!

The new structure is:

These fees have been replaced with a single account service fee. This $20 fee will be charged annually for each Vanguard® fund in which you have a balance under $10,000 in an account.

But it gets better.

You can avoid the account service fee… sign up for account access on Vanguard.com® and choose electronic delivery of shareholder materials, including statements, confirmations, fund reports, and prospectuses.

So basically sign up for electric statements and you will not have any fees! Certainly helps the average investor who does not have $10,000 to invest in a single fund.

Vanguard Rate Change Announcement

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