HOW TO INVEST IN S&P 500: Baby Step The most Popular Options In 2023 (Updated)

How to invest in S&P 500

Do you want to invest in S&P 500 but don’t know how to go about it? Then this study is for you. Read on to know how to invest in s&p 500 with the index fund, Fidelity, TD Ameritrade, Vanguard, and Charles Scwab.

What is S&P 500

The S&P 500, abbreviated as S&P, is a stock market index comprised of 500 significant, industry-leading U.S. corporations. Moreover,  It is closely tracked and frequently used as a proxy for the overall health of the United States stock market.

The index was founded in 1957 by Standard & Poor’s, an American investing information service.

How to invest in S&P 500 index fund

The S&P 500 isn’t the only index in the United States, but it’s a good place to start. This is due to the fact that it encompasses the majority of the largest corporations in the United States. If you want to invest in the S&P 500, take the following steps

#1. Get a brokerage Account

For you to know how to invest in the S&P 500 index fund, you must first open a brokerage account. However, this might be a regular IRA or Roth IRA, an employer-sponsored 401(k) or equivalent plan, or your own traditional, taxable brokerage account.

There are numerous brokerage firms to choose from If you start a new account with the intention of investing in the S&P 500. Firstly is to look into the costs for purchasing and selling mutual funds and ETFs. Nevertheless, many brokerages provide their own family fund or a group of partner funds with no mutual fund trading fees.

#2. Choose between mutual funds and exchange-traded funds (ETFs).

S&P 500 index funds are available as mutual funds or exchange-traded funds (ETFs). Both record the same index and function similarly, however, there are some key differences to be aware of.

Mutual funds

The existence of it is to be held for a particular period of time. Therefore, they only trade once a day, after the market closes. However, Some specify a minimum investment amount as well as a certain amount of time to invest. Moreover, early withdrawals may also result in penalties. On the plus side, mutual funds can be bought and sold in round dollar amounts.


ETFs are purchased and sold in the same way that stocks are. All through the day, the price fluctuates as traders buy and sell. Nonetheless,  All ETFs are free to trade at the most significant discount brokerage providers. Apart from a single share price, there is no minimum duration to retain or minimum purchase quantity. In some situations, ETFs may have reduce expense ratios and can acquire through brokers such as, which is recognize for its minimal fees and zero commissions.

#3. Choose Your Favorite S&P 500 Fund

You can choose Your Favorite S&P 500 Fund for you to know how to invest in an index fund. That is, after you’ve decided between ETFs and mutual funds. Additionally, you can compare more precise data to find your best fund. To begin, consider any costs and fees. You don’t want to overpay for something that can be obtained from several sources.

The following are the fees for the most popular mutual funds:

  • Schwab charges 0.02 percent for the Schwab S&P 500 Index Fund (SWPPX), with a minimum investment of $100.
  • Fidelity charges only 0.015 percent for its Spartan S&P 500 Index Investor Class shares (FXAIX), and there is no minimum investment required.
  • The Vanguard 500 Index Fund (VFINX) charges a 0.14 percent fee and has a $3,000 minimum investment.

And these are the costs associated with ETFs:

The Vanguard S&P 500 ETF (VOO) has a 0.03 percent expense ratio.

While the annual cost of iShares Core S&P 500 (IVV) is 0.04 percent.

Then the SPDR S&P 500 ETF (SPY) from State Street Global Advisors is the largest and oldest S&P 500 ETF, with a 0.0945 percent cost ratio.

#4. Enter Your Business

Once you’re ready, go to your brokerage account and make the trade. We prefer Ally Investment because it only takes a few minutes to place a trade utilizing their mobile app, website, or professional trading platform.

#5. You are now an index fund owner!

Oh yes! It’s as simple as that. Opening and funding a brokerage account is a simple and straightforward process. After the funds have cleared, you can purchase an S&aP 500 index fund with a few mouse clicks. It’s a wonderful first investment and a wonderful way to get your feet wet in the stock market provided you understand the hazards.

How to invest in S&P 500 in Fidelity

The Fidelity on how to invest 500 Index Fund records the S&P 500 index, which is one of the most results provide valuable for US stocks. However, the index encompasses roughly 80% of the investable market capitalization of the US equity market.

Hence, many experts have praised the S&P 500 as a good addition to retirement portfolios due to its broad diversification throughout all sectors. Since it is not focusing on a single industry, it can also endure volatility.

According to Fidelity on how to invest in S&P 500, the fund aims to provide results that are consistent with the achievement of publicly traded common stocks in the United States. The total return includes capital gains and losses as well as income.

Fidelity on how to invest S&P 500 Strategy

The fund aims to replicate the achievement of the S&P 500 Index, which reflects the performance of 500 large common stocks traded on the New York Stock Exchange. Meanwhile,  the fund invests at least 80% of its assets in common stocks that are part of this index.

How to invest in S&P 500 in Vanguard

When it was first introduced in 1976, the Vanguard S&P 500 Index Fund was the very first index-tracking mutual fund. The fund invests in the same stocks as the S&P 500 stock index. Moreover, the index’s equities account for 75% of the value of the US stock market, and the index nearly reflects the overall value of the US stock market.

#1. Mutual Fund on how to invest Vanguard S&P 500

To purchase shares of the Vanguard SP 500 Mutual Fund, you must do it directly from the fund company. Firstly,  You must create an account at After selecting your account type (be it individual, joint, or retirement), you’ll be required to supply fundamental personal and financial information. However,  You can fund your account by sending a cheque or making an electronic deposit.

The Vanguard S&P 500 Mutual Fund has a $3,000 minimum purchase price, or $2,000 if purchased in an educational savings account, in which the minimum is $2,000. Purchase of additional items can be done for as low as $100. By integrating your bank account, you can arrange future automated purchases. Dividends and capital gains can also reinvest into more shares of the fund.

#2. Vanguard on how to invest S&P 500 ETF

To purchase the Vanguard S&P 500 Exchange-Traded Fund, you do not have to set up an account with Vanguard, however, doing so may lead to significant savings. Meanwhile, the Vanguard S&P 500 ETF, like all ETFs, trades on major exchanges like a stock. However, You can purchase the Vanguard ETF  provided you have an account set up with a brokerage firm.

The Vanguard S&P 500 ETF is represented by the symbol VOO. Hence,  to purchase shares of the ETF, you must pay a regular stock commission. Alternatively, if you have a brokerage account at Vanguard, you can buy or trade VOO for free.

#3. Vanguard on how to invest S&P 500 Fees

When it comes to mutual fund expenditures, Vanguard has traditionally been the low-cost frontrunner. Unfortunately, because the financial services industry is aggressive, Vanguard is now being in challenge for the low-cost crown by organizations such as Schwab. However, the deviations are still minor. The Vanguard S&P 500 Mutual Fund, for instance, has an expense ratio of only 0.14 percent, whereas the ETF charges only 0.04 percent yearly, plus commissions to buy or sell if applicable.

How to invest in S&P 500 index

Index funds are incredibly popular because they guarantee possession of a diverse range of stocks, increased diversification, and lower risk – all at a reasonable cost. As a result, many investors, particularly newcomers, believe that index funds are preferable investments over individual equities.

Index funds built on the Standard & Poor’s 500 Index are among the finest (S&P 500). furthermore, the index includes several of the biggest, most diverse American companies in every field. Thereby, making it a low-risk option to invest in inequities. Of course, as 2020 demonstrated, the entire market can move drastically, particularly if something significant occurs.

Finally, this index is the precise definition of the market. And buying a fund based on it will provide you with the market’s return, which has historically been around 10% every year. It is one of the most widely use indices.

Best index funds to invest as of September 2023(Updated)

The following list covers S&P 500 index funds from a range of companies, as well as some of the cheapest funds traded on public marketplaces. However, One of the most critical aspects in your total profit when it comes to an index fund like this is price. Additionally, two mutual funds and three exchange-traded funds (ETFs) are included

 The Fidelity ZERO Large Cap Index

it is a stock index that tracks the performance of large corporations (FNILX). The Fidelity ZERO Large Cap Index mutual fund is part of the financial firm’s entry towards no-expense-ratio mutual funds, hence the ZERO designation. The fund does not formally track the S&P 500; rather, it follows the Fidelity U.S. Large Cap Index, but the distinction is purely academic. Moreover,  The true difference is that investor-friendly Fidelity does not have to pay a licensing fee to use the S&P name, lowering investor costs.

Vanguard S&P 500 ETF (VOO)

The Vanguard S&P 500, as the name implies, tracks the S&P 500 index. And it is one of the largest funds on the market, with hundreds of billions in assets. This ETF was debute in 2010, and it is back by Vanguard, one of the fund industry’s powerhouses.


The SPDR S&P 500 ETF is the grandfather of ETFs, having been in 1993. It was instrumental in launching the current wave of ETF investing. Furthermore,   It is one of the most famous ETFs, with hundreds of billions of dollars in assets. Finally, the fund is endorse by State Street Global Advisors, another industry heavyweight, and it tracks the S&P 500.

The iShares Core S&P 500 ETF

it is an exchange-traded fund that tracks the performance of the S& (IVV). It is however managed by BlackRock, one of the world’s largest fund management firms. This fund, which was found in 2000, is another long-term player that has closely chase the index throughout time.

Schwab S&P 500 Index fund

The Schwab S&P 500 Index Fund is a mutual fund that tracks the performance of the (SWPPX)The Schwab S&P 500 Index Fund has tens of billions of dollars in assets, which puts it on the skinny side of the heavyweights on this list, but that isn’t a big deal for investors. Besides,  This mutual fund has a solid track record dating back to 1997 and is sponsored by Charles Schwab, one of the industry’s most reputable names.

What Is the S&P 500’s Minimum Investment Requirement?

Even when investing with individual retirement plans, the $3,000 investment requirement can be prohibitive for some participants (IRAs). Check out the VOO S&P 500 exchange-traded fund (ETF), which is Vanguard’s rival, if you’re searching for a lower-cost entry point.

Who Can Participate in the S&P 500?

A company must be a U.S. company, meet market capitalization requirements, be highly liquid, have at least 10% of its shares outstanding float in the public market, and have earnings for the most recent quarter and the last four quarters that add up to at least in order to be considered for inclusion in the S&P 500 index.

Is S&P 500 Secure?

In general, yes. Since the S&P 500 is widely represented throughout all major industries, including consumer discretionary and technology, declines in some industries may be partially offset by gains in other industries. This is known as sector diversification.

Why Not Put Money Into the S&P 500?

A “set it and forget it” investment in the S&P 500 has a lot of bias toward really huge large-cap firms, which is one of the main drawbacks. The average market capitalization of each firm in the fund is impacted by their weighting, which might distort the fund’s overall worth.

Does S&P 500 Pay Me on an Annual Basis?

Investors cannot actually invest in the S&P 500 Index; it is merely an index. Dividends given to shareholders are not counted in the Index’s performance. Investors must invest in funds that track the Index in order to purchase the Index itself.


The above guide will direct you on how to invest in S&P 500 with ease. 


Can you just invest in the S&P 500?

You can’t invest in the S&P 500 itself, but you can invest in an S&P 500 fund (index fund, ETF, mutual fund, etc.) that tracks the S&P 500. Meaning, you’d essentially hold the stock of every single company within the S&P 500.

How do I invest directly into the S&P 500?

  1. Open a Brokerage Account. If you want to invest in the S&P 500, you’ll first need a brokerage account.
  2. Choose Between Mutual Funds and ETFs. You can buy S&P 500 index funds as either mutual funds or ETFs.
  3. Pick Your Favorite S&P 500 Fund.
  4. Enter Your Trade.
  5. You’re an Index Fund Owner!

How much do you need to invest in S&P 500?

Each of these low-cost brokerages allows investors to open accounts with no minimum deposit. You could then buy one share of the Vanguard S&P 500 exchange-traded fund for the current market price, currently about $60, plus a roughly $5 commission. You can own the S&P 500 for less than $70.

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