Don't Pay a Fee to Lose Money

Mutual Funds

Don't Pay a Fee to Lose Money

You can avoid minimum-balance charges on your mutual fund.

Watching your mutual fund's value shrink as the stock market tanks is painful enough. It adds insult to injury when your fund company charges a fee because your shrunken account no longer meets the minimum-balance requirement. But you can avoid those fees by taking a few easy steps.

If your balance in any one account drops below $10,000, Vanguard charges a $20 annual fee. But sign up to manage your account online and receive electronic delivery of statements and reports, and you can invest fee-free. (Vanguard also waives minimum-balance fees if the total value of all your accounts is $100,000.) If you do owe fees, they won't be deducted until mid 2009, and a spokesperson says that Vanguard "typically makes allowances for investors whose balances drop as a result of market declines."

T. Rowe Price shareholders pay a $10 fee per account if their balance drops below $2,000 (or below $500 for custodial accounts for minors). The fee won't be assessed until September, so you have a good shot at recouping your losses. If that doesn't reassure you, avoid the fee by signing up for automatic investing of as little as $50 a month.

American Century charges a semiannual account-maintenance fee of $12.50 if your total account balance drops below $10,000. But the fee is waived if you manage your account online.

To help its shareholders cope with the market turmoil, Fidelity lowered the minimum account balance needed to avoid its $12 annual maintenance fee from $2,000 to $1,700 for 2008, and the company made August 8 the cutoff date for determining your balance.