Although putting your hard earned money invested in Mutual Funds sounds like a great thing to do, you must be careful and aware that there are ups and downs in Mutual Funds investment. Someday, the value of your Mutual Funds will rise and someday it will drop just all of a sudden. You are not Guaranteed to get back the same amount you invested or all of your interested earned. Since Mutual Funds have invested in various areas such as ETFs, Bonds, Stocks, Fixed income, foreign markets and many more places, your risk is more or less controlled. Should the market perform bad in one section of financial market, the other section will earn to cover the losses. In the end, you may end up with more or less the same amount you invested. At times, if the market seemed to be performing well, the value of your Mutual Funds will increase pretty and the interest earned is much higher than interest earned through savings account.
Mutual funds are not for the faint heart people who are afraid of losing even a small amount of money. You must have a brave and risk taking type of personality to invest in Mutual Funds due to the volatile nature of the Mutual Funds. However, compared to purchasing stocks and shares, Mutual Funds are much safer to play with. Yes, you can open a Mutual Fund account under TFSA (Tax Free Savings Account) to legally escape from paying taxes on the interest earned.
When you approach BMO (Bank Of Montreal) to open a TFSA account with Mutual Funds investment, you will be asked several financial questions just to determine what type of financial characteristics you possess. Based on that you could be put under low risk, medium risk or high risk investor category. I suggest to go for low risk investment for starters. Then when you feel you are more confident and less afraid, you can change to more riskier investment. You must understand that with Mutual Funds you don't have much choice on which shares or stocks you want to invest in. For example, BMO has a Mutual Fund manager who helps you and other investors invest in various financial sectors and markets, from the money that you and other people pooled together to create the Mutual Funds.
You will be charged fees of about 1.8% per annum for maintaining the Mutual Funds and fees are subjected to change without notice. If you need to invest more or take out money from your mutual funds, you will need to make appointment with your Mutual Funds advisor to do so. You can't do this online. You can setup an automatic investment of a certain amount ( Lets say $100 ) to be invested into your Mutual Funds account monthly.