Fidelity vs Vanguard 2012: Commissions, Fees and Investments
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- Stocks and ETFs: $7.95
- Stocks and ETFs broker assisted: $32.95
- Stocks and ETFs FAST (automated service phone): $12.95
- Options: $7.95 plus $0.75/contract
- Mutual Funds: $75 per transaction, 1,400 NTF mutual funds
- Bonds: U.S. Treasury Auctions, incl. TIPS Auctions, U.S. Treasury Bills, Notes, Bonds, incl. TIPS - free
- GSE (Agency Securities), secondary CDs, Municipals, Corporates (BBB- or higher), CATS/TIGRS, Corporates (BB+ or lower): $1 per bond, $8 minimum,
$250 maximum
- Commercial Paper: $50 per transaction
- Investment products: stocks, bonds, mutual funds, options, commercial paper, forex, foreign stocks, UITs, precious metals, ETFs
- Minimum to open Fidelity account: $2,500
- All Fidelity fees
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- Stocks and ETFs: $7 for the first 25 trades, $20 for subsequent trades for account with less than $50,000
- $7 for account with $50,000–$500,000 (Voyager Services®)
- $2 for account with $500,000–$ 1 million (Voyager Select Services®)
- Free for first 25 trades, $2 for subsequent trades for account with $1 million (Flagship Services™)
- Options: $30 plus $1.50 per contract
- $8 + $1.50 per contract for accounts with over $1 million
- Mutual funds: Vanguard mutual funds - free. All others - Standard: $35; Voyager® and Voyager Select®: $20; Flagship®, $8
- Certificates of deposit (CDs): Purchase: $5 per $1,000, Minimum: $50. Sale: $35 per transaction
- Commercial paper: $50 per transaction; minimum purchase: $100,000
- U.S. Treasury: $0.75 per $1,000 face amount, $40 min–$75 max
- Mortgage-backed securities: $50 per transaction; GNMA minimum purchase: $25,000
- Investment products: stocks, options, mutual funds, bonds, CDs, foreign securities, insurance,
commercial paper, ETFs
- Minimum to open Vanguard account: $3,000
- All Vanguard fees
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Fidelity vs Vanguard: Pros
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- Great research tools with largest selection of independent research
- Low-cost Fidelity mutual funds
- Rich selection of investment products
- No surcharges, except for $0.0192 per $1,000 of principal in addition to commission that is added to sell orders
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- Low cost and good performance Vanguard mutual funds
- Free Vanguard ETFs
- Free dollar-cost-averaging transactions for no-fee mutual funds. $3 per transaction, minimum purchase $100, minimum two transactions, for transaction fee mutual funds.
- Free dividend reinvestment
- No ACAT fee
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Fidelity vs Vanguard: Cons
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- Extremely high commission ($75 per transaction) on non-Fidelity mutual funds
- Website is going down or becoming slow on high-volume days
- $12 annual Low Balance Fee for each noncore Fidelity mutual fund if balance is under $2,000
- $75 (minimum) mutual fund Short Term Redemption Fee (if mutual fund sold in less than 180 days after purchase)
- High margin rates
- Foreign currency wires: up to 3% of principal
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- Extremely high commissions for most people
- $20 annual maintenance fee for regular accounts with balance less than $50,000
- $10 monthly Low Balance Fee for accounts with $2,500 or less
- Terrible customer service
- Poor trading and research tools
- $3,000 minimum to open account
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Vanguard vs Fidelity: Comparison Summary
Vanguard (Vanguard Review) and
Fidelity (Fidelity Review) are known primarily
for their own families of mutual funds rather than their brokerage services. As ETFs, due to their lower costs,
are replacing mutual funds in investor portfolios, the importance of both firms is steadily diminishing.
Outside of mutual funds, Vanguard and Fidelity have little to offer: their commissions are higher than at many other
online brokerage houses and they don't seem to be able to keep up with competition in services and trading technology.
Fidelity provides its customers with rich selection of investment products, access to great independent research,
as well as many low cost Fidelity mutual funds.
There is a general consensus that Vanguard's mutual funds are lower cost and better performers than counterparts at
Fidelity. Vanguard also offers dollar-cost-averaging transactions for mutual funds for those clients who choose to
accumulate positions over time. Free dividend reinvestment is always a great plus too.
When comparing retirement accounts (ROTH, Traditional, Simple), we can't recommend either one of the firms:
they disappoint by charging Low Balance Fee. Fidelity also has a Short Term Redemption fee many other brokerages don't have.
Because of that, both companies were not included in our
Best IRA Accounts in 2012 list.
There are better online brokers for beginner investors than these two, that offer vibrant online communities, where users
could ask questions, learn from more experienced traders and even get investment ideas. Some online brokers also offer virtual
trading environment, that allows users to practice trading without risking their money. If you are new to investing, check out
our Best Brokers for Beginner Investors recommendations.
Fidelity and Vanguard mutual funds commissions are just too expensive comparing to many other online brokers. It makes more sense
(and it's much cheaper) to invest in ETFs rather than in mutual funds. This means that both firms will keep
losing capital and customers. We can't recommend either one of these brokerage
companies and we encourage investors to research firms in our
Top Online Brokerages article.
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