3-star brokerage firm rating

Vanguard review

USAA brokerage rating

USAA Brokerage Review

USAA vs Vanguard



Account Pricing, Commissions, and Fees




Vanguard


USAA

  • Stocks and ETFs: $7 for the first 25 trades, $20 for subsequent trades for account with less than $50,000 invested in Vanguard products
  • $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 $1,000,000-$10,000,000 (Flagship Services)
  • Free for first 500 trades, $2 for subsequent trades for account with $10,000,000+ (Flagship Select Services)
  • Options: $20 + $1 per contract (Voyager: $7 + $1 per contract; Voyager Select and Flagship: $2 + $1 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: Commission-free
  • 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: $0; most Vanguard mutual funds have a minimum investment of $3,000
  • All Vanguard fees
  • Vanguard login, Vanguard promotions

  • 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, ETFs
  • USAA Brokerage minimum deposit to open account: $0
  • All USAA Brokerage fees
  • USAA Brokerage promotions




Vanguard vs USAA: Pros




Vanguard


USAA

  • Low cost and good performance Vanguard mutual funds
  • Commission-free Vanguard ETFs
  • Free dollar-cost-averaging transactions for no-fee mutual funds; for transaction-fee mutual funds dollar-cost-averaging is $3 per transaction, with $100 minimum purchase
  • Free DRIP (dividend reinvestment plan)
  • Low commissions for clients with $500,000+ invested in Vanguard products

  • Very few fees comparing to other brokerage firms
  • Good stock and ETF commissions for clients with $50,000+ balances
  • No account maintenance, inactivity or hidden fees
  • Good banking services
  • No-fee IRA accounts




Vanguard vs USAA: Cons




Vanguard


USAA

  • High commissions for most active investors
  • Poorly designed, difficult to navigate website
  • If account is not signed up for electronic statements, $20 annual account service fee is charged for each Vanguard fund under $10,000 (waived for accounts over $50,000)
  • Annual IRA fees: $25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans (waived if account is paperless or has $10,000+), $20 for 529 plan
  • Basic trading tools
  • No advanced trading platform
  • No pre-market trading and short after-hours trading: 4:15 pm - 6:00 pm EST, instead of 4:00 pm - 8:00 pm EST
  • Vanguard does not list all their fees on their website - they ask to call them for information on the fees

  • 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 vs Vanguard: Comparison Summary



USAA Investments (USAA Investments Review) charges higher commissions on buying and selling stocks and ETFs than Vanguard Brokerage (Vanguard Review): $8.95 per trade versus $7 per trade at the competitor. However, Vanguard gets extremely expensive for active investors: starting from 26-th trade in a year and onward the firm charges $20 per trade (this is the highest commission among discount brokers right now). In contrast, for active traders USAA's rates drop to just $5.95 per trade (customer must execute 25 or more trades in a rolling 90-day period or have $50,000 or more in eligible assets). Mutual fund transactions are $45 at USAA and $35 for most clients 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 and sell Exchange Traded Funds (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, such as free checking account, credit cards, and 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 very basic trading tools that fell far behind the competition. The two brokers don't offer online user communities, where members could learn from each other, share investment ideas and ask questions. They also don't provide 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 Best Brokers For Beginners article.

In summary, we recommend Vanguard to "buy-and-hold" customers wanting to invest primarily in Vanguard's own family of mutual funds and ETFs. USAA brokerage is a good option for an IRA account, and to anyone who wants to do their investing and banking with one company. To everyone else we suggest researching Top Rated Discount Brokers before opening a brokerage account.


Vanguard Website

Vanguard review


USAA Website

USAA Brokerage Review



Updated on 7/5/2016.



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