What is a no-transaction-fee fund and how is it different from a no-load fund?

These sound similar but describe different costs. A no-load fund charges no sales commission (no load) to buy or sell, so none of your money is skimmed off the top for a salesperson. A no-transaction-fee (NTF) fund is one your particular broker lets you buy without charging its own trading fee, as part of its fund marketplace. A fund can be no-load but still hit you with a transaction fee at a broker that doesn't include it in its NTF list, and vice versa. To keep costs down, look for funds that are both no-load and available with no transaction fee at your broker, which describes most major low-cost index funds. Always confirm on the order screen before buying, since a surprise transaction fee eats into small investments.