The smallest investment amount accepted for establishing an individual retirement account. If a dash appears in this field, the fund does not have a plan. If the minimum is zero, then $0 will appear. Where Clsd appears, the fund is closed to new investors.
Benefits
This figure indicates the minimum amount that may be invested in a fund's individual retirement account. IRA investors may receive distributions on a tax-free basis, but they must be reinvested in the IRA or be subject to significant IRS penalties. Frequently, the minimum initial IRA purchase amount is less than the fund's normal minimum initial investment amount. This allows investors access to funds they may not otherwise enjoy.
Origin
This information is taken directly from the fund prospectus.
Nearly 150 funds have a $0 minimum for initial IRA purchases, while a number of institutional funds of $1 million or more. (Data as of 12/31/97)
For the Pros
IRA purchase amounts tend to be lower because the premise is that of a long-term commitment to the fund. However, unlike normal accounts, these funds may levy annual account maintenance fees to offset additional administrative fees associated with annual, special IRS filings. Funds may waive these fees on larger account sizes. Check the fund prospectus for these fee and waiver options.