I don't have a Schwab account so I don't have firsthand knowledge of their fees for mutual funds, but according to their Web site, they charge "$0.00 in transaction fees from Schwab Mutual Fund OneSource."

This instantly put me on guard. How do they make their money if they don't charge for a service? The fine print tells me that they receive "renumeration from fund companies participating in the Mutual Fund OneSource service." So my guess is that the cost of the transaction is embedded in the expense ratio of the fund itself. One of the tenets of finance is that money doesn't just appear and disappear; it has to come from somewhere. When it comes to a broker, that money comes from you, either directly or indirectly. That's not necessarily a bad thing; a broker has to make a living too. The question you have to ask yourself is if he's providing you enough value for the dollar.

Anyway, if Schwab offers funds that you like, you can opt to buy from them. I've always purchased directly from the fund companies. You might want to compare expense ratios of funds offered by Vanguard, T Rowe Price and Fidelity with similar funds offered by Schwab and see if there's a cost advantage to buying directly from the fund company.

Does schwab require a minimum investment amount. I've looked into a few sites, but most require approximately $5000 to begin investing. For that reason I have stuck with Sharebuilder, even though their fees aren't the greatest I have seen. They are just easy for me.

They may not charge a transaction fee, but they will make money if you are invested in the fund. They make their money of the expense ratio that they deduct for operating the fund.