the lower MER fees usually about .5% as compared to equity mutual funds and their fees ( average about 2.5%). So if your equity mutual fund has the same top 60 funds in it as the index fund, it will cost you 2% more to own it thru your MF dealer than if you bought the index fund yourself. Thus the appeal of the couch spud method. Saving fees. Also a month or so back, a poster said she buys Canada Savings Bonds to use as her saving account for her kids sports activities. Due to their low interest rate, ( lower than the current rate of inflation ) you could be a bit better off at the end of the year, if you make your regular deposits into a high interest savings account with an online bank like ING or Ally. (Although you will still have to claim the interest on your tax return ) or even in a TFSA, then no taxes when you withdraw. Just my humble opinion and 2 cents worth. @Gail -- exactly! the index fund never aims to outpace the market because it IS the market -- it lays right smack in the middle of the graph. Half of stocks/mutual funds are below it, and half are underneath it. By buying actively managed mutual funds rather than index mirroring funds, you also have to pay higher fees, which means that you are statistically more likely to make less money than if you invest in