Vanguard vs Charles Schwab vs Fidelity Investments
Vanguard, Schwab, and Fidelity are three U.S. brokerage firms widely used for a variety of investment products and services. Let's run them through their paces and determine which broker is the best value.
Fees and Account Minimums
Schwab clients pay $8.95 for stock and ETF trades, Fidelity charges $7.95, and Vanguard's charge varies between $0 and $20. Traders with less than $50,000 in Vanguard funds are charged $7 for the first 25 trades and $20 for all subsequent trades.
At Fidelity and Schwab, derivative traders pay an additional $0.75 per contract for options. Vanguard customers pay $1 per contract on top of a base charge of $20, $7, or $1. The base charge is determined by account size. Investors with less than $50,000 in Vanguard mutual funds and ETF's pay the $20 base charge.
Using a live rep at Fidelity to make a trade is $32.95, at Schwab the price is $33.95, and at Vanguard the commission varies based on account size. The charge ranges between $25 and $0, and will always be lower than Schwab and Fidelity.
Accounts at all three firms come with no inactivity or maintenance fees (at Vanguard, clients with under $50,000 on deposit in Vanguard assets must sign up for electronic delivery of account documents).
Schwab has an opening deposit requirement of $1,000. This minimum can be waived by opening a Schwab bank account along with the investing account. Vanguard has no initial deposit requirement, while Fidelity requires an opening deposit of at least $2,500.
Fidelity wins the category due to its flat fee of $7.95.
Fidelity vs Schwab vs Vanguard: Mutual Funds and ETF's
Over 5,000 mutual funds are available for trade at Schwab. More than 3,500 of these are OneSource products, which are no-load and no-transaction-fee. Transaction fee mutual funds are a somewhat steep $76 on the buy side, although they are free to sell.
Vanguard clients can trade over 16,000 mutual funds, some of which have no transaction fee and no load. Transaction fee mutual funds are $35 in a standard account (under $50,000 invested in Vanguard funds). The charge decreases to either $20 or $8 for accounts with larger balances. The fee is applicable to buys, sells, and exchanges.
Fidelity offers traders more than 10,000 mutual funds. Less than a thousand of these come with no transaction fee and no load. Transaction fee funds cost either $49.95 or $75 to buy, depending on the particular fund, although they are free to sell.
Schwab has more than 200 ETF's without trading fees, Fidelity offers 84, while Vanguard has 55.
Due to its large number of commission-free funds, Schwab wins here.
Research and Education
Schwab clients have access to independent stock reports from several providers at no charge. The broker offers videos and other educational material on its website.
Fidelity offers third-party reports at no cost from several researchers. The broker has videos, articles, and webinars on a variety of financial topics.
Vanguard provides equity reports from just two analysts. They are free of charge. The website has fewer instructional videos compared to Schwab and Fidelity.
Fidelity and Schwab tie here.
Schwab has phone representatives available 24/7. The firm has over 325 brick-and-mortar locations in the United States. The company also offers customer service for Chinese speakers.
Vanguard offers phone service Monday through Friday only. Regrettably, the firm does not have a nationwide network of branches.
Phone service at Fidelity is available around the clock. Currently, the broker has over 180 branch locations.
Schwab wins this category.
Schwab's web site is easy to navigate. Investors can place trades within the web browser, or on StreetSmart Edge, a desktop platform.
Making trades at Fidelity is easy with the web browser, which has a trade ticket. The broker also has Active Trader Pro, an advanced platform. The firm recently introduced an app for Apple TV.
Vanguard's website is harder to navigate than Fidelity's and Schwab's. Trading occurs within the web browser. Regrettably, there is no advanced platform here.
Another tie between Fidelity and Schwab.
Schwab offers apps for Kindle Fire, Android, iPad, iPhone, Apple Watch, and mobile web. The app is simple to use. Traders can make a mobile check deposit, transfer funds, contact customer service, or watch CNBC.
Apps for Android, Apple, and Windows Phone 8 are available at Fidelity. The interface is intuitive. Users can transfer funds, contact customer service, make a mobile check deposit, place trades, and watch Bloomberg business news.
Vanguard clients can trade on Android, Kindle Fire, iPhone, and iPad. The interface is easy to learn. Traders can reach out to customer service or deposit a check. Disappointingly, there's no live streaming of financial news.
Schwab and Fidelity tie yet again.
Schwab offers bank accounts with checks and a debit card free of charge. FDIC insurance is included at the regular $250,000 limit. The broker reimburses ATM fees throughout the world.
Fidelity clients can open the Cash Management Account, which comes with checks and a Visa Gold debit card at no cost. Additionally, the account comes with FDIC protection up to $1,250,000, much higher than the normal amount. The firm reimburses all ATM fees.
Vanguard offers an account with cash management features, but clients must have at least $500,000 in Vanguard funds. Checks and a debit card are available, but they both have fees for accounts under $1,000,000.
Fidelity is victorious in this category.
Fidelity vs Vanguard vs Charles Schwab: Results
Vanguard didn't come out ahead in a single category, Schwab won two categories, Fidelity won two categories, and there were three ties between Schwab and Fidelity. It's a draw between the latter two firms. Active stock traders will do well at Fidelity, while fund investors looking for commission-free products will want to try out Schwab. Despite Vanguard's poor performance in this contest, the broker is still a good choice for traders with $50,000 or more to invest in Vanguard funds.
Another top brokerage firm to consider for a brokerage account is Scottrade. It offers lower commissions than all three brokers in this article, over 3,000 commission-free mutual funds,
and an advanced trading platform. Detailed information is available in Scottrade review under this link.
Much more information is available in detailed brokerage reviews, including firms' pros and cons, all commissions and
important fees, and trading tools overview:
Charles Schwab review (learn more),
Fidelity Investments review (learn more),
Vanguard Brokerage review (learn more).
Updated on 1/14/2017.