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Vanguard review

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USAA Brokerage Review

USAA vs Vanguard



Vanguard vs USAA Brokerage 2014: Account Pricing, Commissions, Fees




Vanguard Brokerage Services


USAA Brokerage

  • 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 invested in Vanguard products (Voyager Services®)
  • $2 for account with $500,000–$1,000,000 invested in Vanguard products (Voyager Select Services®)
  • Free for first 25 trades, $2 for subsequent trades for account with $1 million (Flagship Services™)
  • Options: $30 + $1.50 per contract
  • Options for accounts with over $1 million: $8 + $1.50 per contract
  • 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 minimum, $75 maximum
  • 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
  • Vanguard minimum deposit to open account: $3,000
  • All Vanguard fees

  • Stocks and ETFs: $8.95 for Gold members and $5.95 for Platinum members (an additional $0.01 and $0.005 is charged for each share over 1,000 for Gold and Platinum, respectively)
  • Stocks and ETFs broker assisted: $50 (an additional $0.005 is charged for each share over 1,000)
  • Options: $8.95 + $0.75 per contract for Gold members and $5.95 + $0.75 per contract for Platinum members
  • Mutual Funds: $45
  • All Listed Corporate Bonds: $25 + $3 per bond
  • U.S. Treasury Securities at Auction: $45
  • Investment products: stocks, options, mutual funds, bonds, U.S. Treasury Securities, ETFs
  • USAA Brokerage minimum deposit to open account: $0
  • All USAA Brokerage fees




Vanguard vs USAA Investment Services: Pros




Vanguard Brokerage Services


USAA Brokerage

  • Low cost and good performance Vanguard mutual funds
  • Commission-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 DRIPs (dividend reinvestment plans)
  • No ACAT fee

  • No account maintenance, inactivity or hidden fees
  • Good banking services: USAA bank accounts
  • No-fee IRA accounts




Vanguard vs USAA Brokerage: Cons




Vanguard Brokerage Services


USAA Brokerage

  • High commissions for majority of investors
  • If account is not signed up for electronic statements, $20 annual account service fee is charged for each Vanguard fund with a balance of less than $50,000 in an account
  • Annual IRA fees: $25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans, $20 for 529 plan
  • Poor trading and research tools
  • $3,000 minimum to open account is somewhat high
  • No pre-market trading and shorter after-hours trading: 4:15 pm - 6:00 pm EST, instead of 4:00 pm - 8:00 pm EST

  • Higher than average commissions for Gold Members
  • Additional $0.01 per share and $0.005 per share is charged for each share over 1,000 for Gold and Platinum members, respectively
  • Poor trading tools
  • Few educational resources
  • Limited research services




USAA Investments vs Vanguard Group Brokerage Services: Comparison Summary



USAA Investments (USAA Investments Review) offers higher commissions on buying and selling stocks and ETFs than Vanguard Group Brokerage Services (Vanguard Review): $8.95 per trade versus $7 per trade at the competitor. Mutual fund transactions are $45 at USAA and $35 for the most customers at Vanguard.

The time of mutual funds is slowly but surely coming to the end. They are being replaced by low-cost and easy to buy/sell Exchange Traded Funds (or ETFs). Even though Vanguard created its own ETFs, there are similar, well-known ETFs available to everyone at every brokerage firm. We believe that the company will have hard time attracting new customers in this new environment.

USAA outshines Vanguard in banking services: the firm offers a wide selection of competitive banking products, anything from free checking account, credit cards and up to all kinds of insurance. Unlike most other online brokers, the company has very few fees and only one surcharge - on trades with over 1,000 shares.

Both online brokerage firms provide outdated trading tools that fell far behind the competition. They don't offer online user communities, where members could learn from each other, share investment ideas and ask questions. They also don't have virtual trading, that allows clients to practice various trading strategies without the risk of loosing money. If you are new to investing take a look at our Recommended Brokers For Beginners article.

We recommend Vanguard only to "buy-and-hold" customers wanting to invest primarily in Vanguard-family mutual funds and ETFs. USAA Brokerage is a good option for an IRA account and to those who want to do their investing and banking with one company.


Vanguard Promotion - none:

Vanguard review


USAA Promotion - 50 free trades:

USAA Brokerage Review


This article was updated on 2/11/2014.



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