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Though this

column lately has tackled about every imaginable twist on buying mutual funds through online brokers, there's one biggie that still needs airing: automatic investing.

What Works on Mutual Funds

Best Online Brokers for Fund Investors

Minimum Investments and More in Brokers' Fund Programs

Fund Fees at Online Brokers --What's Too Much?

Fund Programs at Scottrade, SiebertNet, Others

Automatic investing lets you buy fund shares without thinking about it. After the first purchase into the fund, you set up a system of future injections, say $100 or $1,000 every month or quarter. Once you program in how much and when, money just flows from your bank or broker into the fund.

Automatic or "systematic" investing has multiple fans in the fund community. Fund families love it because, after signing up, shareholders mindlessly send assets their way. Investors like it because it keeps them disciplined, and some are attracted to the concept of

dollar-cost averaging. The idea there is that by setting aside a dollar amount, rather than focusing on share price, investors end up buying more shares of a fund when the price is low and fewer when the price is high.

Most major fund companies have an automatic investing option, and plenty of shareholders take part. At

American Century

, for example, 21% of retail shareholders participate in the fund family's automatic investing plan, according to a spokesman.

Yet, while automatic investing is a fund staple, not all online brokers offer it. Among the seven biggest brokers, listed below,





don't have the feature.

Auto investing is one reason that

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TheStreet Recommends

Eric Gerber

of Athens, Ga., was recently leaning toward


over E*Trade as he considered a move to an online broker. "I have a set dollar amount taken from my checking account and put into my choice of funds at my broker. It all occurs automatically on the 15th of every month and allows me to

dollar-cost average effortlessly."


Of the brokers that do offer automatic investing, their plans differ. At Schwab, for example, the minimum investment is $100 and the max is $50,000. At

TD Waterhouse

, the min is $100 for monthly investments but $300 for quarterly, and the max for either time period is $10,000. Also, Schwab offers a "twice-monthly" investment option; Waterhouse doesn't.

Even if your broker offers automatic investing, not all funds may be eligible. At Waterhouse, you can auto invest for any fund, but at Schwab, it's only funds that don't carry Schwab transaction fees when you buy them -- funds in its "OneSource" program.

Some brokers charge fees to enroll. At


, there's a one-time $18 setup fee.


doesn't charge for no-transaction-fee funds but it does levy a $5 fee for auto investing on funds that carry a transaction fee when you make the initial purchase. And that fee kicks in with


systematic purchase. So if you buy $100 worth a month, 5% disappears in the auto investing fee. Compare Waterhouse: no auto-investing fee on any fund purchase. (Read more on

transaction fee vs. no-transaction-fee funds.)

Finally, the minimum injection may be lower if you buy a fund directly from the fund family, rather than through a broker. At American Century, for example, the automatic-investing minimum is $50. If you purchase a fund from that family through any of these brokers, you'd face higher minimums on these systematic purchases.

If automatic investing interests you, ask your broker:

Does it offer automatic investing?

Is the fund you're interested in eligible?

What are the min and max investments?

What are the various time frames to choose from (twice-monthly, monthly, quarterly)?

Are there fees for automatic investing, and are they one-time or each time?

Anything else investors should know? Please email me at, and please include your full name.

Suretrade's Special Few

Though I had

reported yesterday that


customers will be facing higher commissions next month when the broker gets absorbed by pricier

Quick & Reilly

, it turns out that a handful of active Suretraders will stay at lower Suretrade prices. This commission grandfathering only applies, though, to about 1,000 of the approximately 500,000 Suretrade customers -- specifically, those with a long history of active trading, says Quick spokesman Charles Salmans. Because Quick is planning to offer an active-trader commission discount anyway, the idea was to bridge these folks who would surely qualify -- until it's set up, Salmans says.

"We were not intending to publicize this" because it applies to so few folks, Salmans says. "Our intention is to communicate more broadly once we have these systems in place so that people will automatically qualify."

Chat and Book Review

Please join me and my colleague,

Mark Ingebretsen

, for a chat about selecting an online broker, on Tuesday, Feb. 13, at 5 p.m. EST, here on


Also, have you read

Charles Schwab's

new book

You're Fifty, Now What? Investing for the Second Half of Your Life? I'll be reviewing it in an upcoming What Works. Let me know what you think of the book with an email to, and please include your full name. has a revenue-sharing relationship with under which it receives a portion of the revenue from Amazon purchases by customers directed there from