[Yoshi63]

Hey there tanner-

I think you may still be a bit confused. Funds are purchased through the managers of the fund, not on a site like eTrade which gives you access to exchanges. Mutual funds aren't traded on a market like stocks are (unless they are ETF's - exchange traded funds). So if you wanted to buy a Vanguard index fund, you'd need to invest through Vanguard. However, many places (such as Vanguard) offer the ability to invest in other places' funds (such as T Rowe Price). Basically they are partnering with these other "fund families" to make it easier on their investors to get what they want. There may be a fee in some cases to buy funds from outside.

If you are planning on taking the passive route to investing, Vanguard is totally the way to go. They are very easy to set-up, and once you get going you can do everything yourself on their website. I can't compare them to their competitors, but I was highly recommended to Vanguard and have been very pleased with them.

Vanguard has a money-market which is currently yeilding about 4.8% that you can move money freely in and out of. When you want to add funds to Vanguard you have to purchase something, so I generally purchase "shares" of the money market. Once it becomes available a few days later, I am free to allocate that money to various index funds I already own, or add new funds. The money market is also a good place to keep idle money, rather than earning 1% in a savings account.

Vanguard gives you the option to expand your account into a brokerage account - so you can trade on markets like you would at eTrade. The only problem is that since they aren't primarily used for this, the fees are pretty steep (something like $50 a trade, compared to $9.99 or less at other sites). So if you intended to trade individual stocks or ETF's, I'd consider additionally opening an eTrade-type account (I personally use TDAmeritrade).

Finally, Vanguard really charges nothing for normal use. There are fees for doing stupid things, I suppose, but depositing/buying/selling/withdrawing is all free. Almost all of their funds are no-load funds, with the exeption of a few (mostly internationals). Like any other managed funds, they charge a management fee - but like others have mentioned they are very low (in the 0.5% range).