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But does it make sense to diversify beyond and index fund (say an international index fund for example) if my account balance is less than $5,000 I would have to pay $10/fund plus $10/index fund. That's $40 a year just to have the fund vs. $20 if I have only one fund. I wonder if the return would offset the cost? (depending on how long it would take me reach $5000 in my Roth)


The following is a one of my prior posts about Vanguard Fees...with one bit of additional information that I neglected to include on the first one.

Vanguard Fee Structure for IRA Accounts:

Custodial Fee: $10/year for every fund, index or not, in the account that has less than 5k. Custodial Fees are waived if you have a combined total of 50k in all of your accounts.

Maintenance (Portfolio) Fee: For index funds only. Charged quarterly (if the dividends for that fund are paid out quarterly) for every fund that contains less than 10K.

For Taxable Accounts:

There are no custodial fees.

The maintenance fee (index fee) is the same as for the IRA accounts: $10/year, usually paid out of your dividends, and charged quarterly ($2.50) if the dividends are paid quarterly. (If the dividends are paid annually, such as for the Small Cap Index Fund, then they are charged annually.)

There is a low-balance $10/year charge for accounts that fall below $2500.

For all accounts, taxable and tax-advantaged:

Maintenance fees are not waived with the 50K combined total. To waive an index (maintainence fee) you must have that 10K in each fund.

Additionally, the following article might be of interest to you.

Article on Vanguard v. TIAA


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