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Can I invest in mutual funds without putting money into an IRA or 401k? Would one of the big firms out there like Ameritrade handle this?

I want it to be fairly liquid and not have to deal with penalties for early withdrawl etc. I would call it a savings account on steroids. Are there minimum initial amounts required?

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    Calling it that would set up some unreasonable expectations. I'd call it long term savings.
    – JTP - Apologise to Monica ♦
    Commented Jun 10, 2015 at 23:12
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    You can't "put" money into a 401k plan; you can ask your employer to send some of your wages to the employer-sponsored 401k plan. That is, if you have $1000 in a savings account, you cannot say "Hey, let me invest this in a 401k plan"; the money has to come out of your wages and it has to be sent by your employer to the 401k plan, not by you directly.
    – Dilip Sarwate
    Commented Jun 10, 2015 at 23:21

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Yes, you can. You could either go through brokerages like Ameritrade or fund companies like Fidelity or Vanguard. Yes there are minimums depending on the fund where some retail funds may waive a minimum if you sign up for an "Automatic Investment Plan" and some of the lower cost funds may have higher initial investment as Vanguard's Admiral share class is different from Investor for example.

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While @JB's "yes" is correct, a few more points to consider:

There is no tax penalty for withdrawing any time from a taxable investment, that is, one not using specific tax protections like 401k/IRA or ESA or HSA.

But you do pay tax on any income or gain distributions you receive from a taxable investment in a fund (except interest on tax-exempt aka "municipal" bonds), and any net capital gains you realize when selling (or technically redeeming for non-ETF funds). Just like you do for dividends and interest and gains on non-fund taxable investments.

Many funds have a sales charge or "load" which means you will very likely lose money if you sell quickly typically within at least several months and usually a year or more, and even some no-load funds, to discourage rapid trading that makes their management more difficult (and costly), have a "contingent sales charge" if you sell after less than a stated period like 3 months or 6 months.

For funds that largely or entirely invest in equities or longer term bonds, the share value/price is practically certain to fluctuate up and down, and if you sell during a "down" period you will lose money; if "liquid" means you want to take out money anytime without waiting for the market to move, you might want funds focussing on short-term bonds, especially government bonds, and "money market" funds which hold only very short bonds (usually duration under 90 days), which have much more stable prices (but lower returns over the longer term).

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