Scottrade vs Vanguard Showdown
Vanguard and Scottrade are two widely-used brokerage firms, although they tend to attract different types of investors. Let's compare the two brokers against each other and determine who is the better value.
Trading Fees and Account Minimums
Scottrade charges $7 for stock and ETF trades, while Vanguard has established a range between $0 and $20. Vanguard customers pay $7 for the first 25 trades and $20 thereafter if they have less than $50,000 in Vanguard mutual funds and ETF's. Most of Vanguard's customers will probably be in this category. Investors can receive on average two trades per month at $7 with this fee schedule.
Option traders at Scottrade pay an extra $1.25 per contract. Vanguard customers are charged $1 per contract as well as a base charge of $1, $7, or $20, depending on account size. Traders with less than $50,000 in Vanguard funds pay $1 per contract plus a $20 base charge.
Placing a trade with a human broker at Scottrade costs $32. As usual, Vanguard's fee varies and is based on account size. The fee ranges between $25 and $0, and is less than Scottrade's in any case.
There are no inactivity or maintenance fees at either firm for brokerage accounts (at Vanguard, clients with under $50,000 deposited in Vanguard funds must enroll in electronic delivery of account documents). Scottrade's initial deposit requirement for an IRA is $0, and for a regular brokerage account the minimum is $2,500. Vanguard has no minimum deposit requirement for any account.
Scottrade wins this category because of Vanguard's complex fee schedule.
Scottrade vs Vanguard Mutual Funds and ETF's
Investors at Scottrade have access to more than 14,000 mutual funds. Of these, nearly 3,000 come with no transaction fee and no load. No-load funds at the firm that do come with a transaction fee are $17 to buy, sell, and exchange. Funds with loads are free to buy, although they are $17 on the sell side. Regrettably, Scottrade doesn't currently offer any commission-free ETF's.
Traders at Vanguard receive a list of more than 16,000 mutual funds to invest in. Some of these funds come with no transaction fee and no load. Funds that do have a transaction fee are $35 in a standard account (defined as under $50,000 in Vanguard funds). Larger accounts pay either $20 or $8. The fee is charged to sales, purchases, and exchanges. Vanguard also offers 55 ETF's that are free to trade. They have an average expense ratio of just 0.12%.
Vanguard wins this category due to its offering of commission-free ETF's.
Research and Education
Research and educational tools are insufficient at Scottrade. The firm offers no third-party reports for equities. Scottrade does have a financial education page on its website
called Knowledge Center. Traders can study articles and videos on a range of investment topics.
On the Vanguard website, there is helpful information on education, retirement, and other financial topics. There are many educational pamphlets in pdf format on its site. The broker
has effective and user-friendly screeners. Analyst reports on equities are available from Argus and MarketGrader at no cost.
Vanguard wins this category.
Scottrade customer service is available over the phone from 5 am to midnight (CST), Monday through Friday, and 8 am to 6 pm on the weekend. The broker has a nationwide network of branches, currently with more than 500 locations.
Vanguard has phone service available Monday through Friday, 8 am to 10 pm, EST. The firm does provide its customers with a phone number if they travel outside the U.S. Unfortunately, the firm does not have a nationwide network of branches.
Scottrade wins this category.
Scottrade’s website is simple and not very sophisticated. Traders are not allowed to create a user ID on the website and must login with an account number. The most basic trading
platform is the website. The broker also offers a more sophisticated trading system, Scottrader Streaming Quotes. The most advanced platform is ScottradeELITE, a desktop system for
Vanguard's website is more advanced and user friendly than Scottrade's. Trading with the broker takes place within the web browser with easy-to-use trade pages. Unfortunately, the
broker doesn't have an advanced trading platform.
Scottrade wins in this category thanks to advanced trading.
Scottrade has apps for Android, Apple, and mobile web. Users can perform options research, look over account and position data, and read market news. Unfortunately, the broker's app doesn't have some important features, such as mobile check deposit, or a customer service contact.
Vanguard customers can trade using Android, Kindle Fire, iPhone, or iPad. The interface is simple and user friendly. Users can place trades, get in touch with customer service, or deposit a check. Conveniently, account documents are available in pdf format.
Vanguard wins this category for its mobile check deposit capability.
Scottrade provides bank accounts with FDIC insurance. Customers receive checks and a debit card free of charge. To open a Scottrade bank account, investors must have $500 or more in a Scottrade securities account.
Vanguard offers cash management features for its clients, but traders must have at least $500,000 deposited in Vanguard ETF's and mutual funds to apply. Both checks and the debit card carry fees for accounts with less than $1,000,000 in Vanguard funds.
Scottrade wins this category easily.
Scottrade vs Vanguard Results
Scottrade (account review) won four categories, there was one tie, and Vanguard
(account review) was victorious in two categories. Scottrade wins in this broker comparison. Scottrade is ideal for active stock traders
who need an advanced platform, as well as for beginners, IRA accounts, and mutual funds investors. Vanguard is a good choice for ETF investors.
Updated on 3/12/2016.
Review discount online brokerage firms comparison: Scottrade or Vanguard? Differences between investment companies. Recommendation for stocks, options, ETFs, mutual funds, bonds investors. Vanguard versus Scottrade for beginner
investors, long term, individual retirement accounts, active/day traders. See what stock broker service is better, cheaper, offers lower fees, cost, rated higher and easier to use. Which broker should you choose?