Vanguard Review: Commissions, Fees, and Minimum Deposit
|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 $1,000,000-$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)|
|Options for accounts + 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 is $50. Sale - $35 per transaction|
|Commercial paper|| $50 per transaction; minimum purchase is $100,000|
|U.S. Treasury|| Commission-free|
|Mortgage-backed securities|| $50 per transaction; GNMA minimum purchase is $25,000|
|Investments|| stocks, options, mutual funds, bonds, CDs, foreign securities, insurance,
commercial paper, ETFs|
|Vanguard minimum deposit to open account|| $1,000|
Opening an account with Vanguard is undoubtedly one of the weakest areas of their product. The actual informational part of the account creation
process is somewhat standard: they ask about things like name, home address, social security number, etc. The main reason for the low score in this
category is the wait. Once a user has successfully given all of their information and chosen a username, Vanguard takes almost three weeks to finish
setting up the account and withdraw the funds. This is, by far, one of the longest account creation waiting times in the industry.
Vanguard Mutual Funds Review
Vanguard Group is one of the largest providers of mutual funds in the world. Vanguard family mutual funds include a collection of 117 actively managed
mutual funds, and over 150 U.S., exchange traded and international funds and financial portfolios. These funds focus on a number of financial goals,
risk levels, sectors and returns.
So which mutual fund should users choose for their portfolio? They all differ in performance, portfolio composition and expenses. We did
the research and below list the best Vanguard mutual funds in popular categories:
Vanguard.com Website/Trading Platform/Tools Review
Vanguard's website has some good educational tools on it. However, it is not as user friendly asTradeKing's
site, or as advanced as TD Ameritrade's. The Vanguard site has a useful search field in the upper-right
corner after logging in. Here, users can type any keyword, such as "transfer funds" or "buy ETF's" and the website will return search results, with the correct result
usually at the top of the list. It's a handy feature for navigating the Vanguard site.
After entering a ticker symbol in the search field, detailed information is displayed for the security. Strangely, buy and sell buttons are not displayed for a stock. Instead, users must scroll down to a menu that says, " I want to..." and select "Trade this stock."
The menus on the site seem geared towards Vanguard ETF's and mutual funds. It's somewhat cumbersome to find a screener for non-Vanguard funds, although one does exist.
The Vanguard site is more difficult to navigate than other broker sites.
Regrettably, the broker has no advanced desktop trading platform. Many other brokers do offer their clients sophisticated trading systems, so this absence is a significant failure on Vanguard's part. Fidelity, Schwab, TD Ameritrade, Merrill Edge, and E*Trade all have a selection of advanced platforms. Combined with a simple website, this broker creates the impression that it's designed for buy-and-hold investors who don't need a lot of sophisticated technology.
Traders at Vanguard can buy and sell stocks, ETF's, and Vanguard mutual funds on Android tablets and phones, Kindle Fire, iPad, and iPhone. The interface is fairly simple and quick to learn. A menu icon in the upper-left corner reveals several features, such as a customer service contact, a device watch list (not related to any watchlist on the website), securities research, market news, and mobile check deposit. Vanguard messages can be retrieved on the app, and messages can also be sent to customer service, with attachments if necessary. Statements are also available in pdf format, a nice feature. There are some Vanguard videos on the app. Disappointingly, live steaming of financial news is not available. Other brokers, such as Fidelity, do offer such service.
A beneficial feature on the app is portfolio analysis. Tapping on this in the menu produces a screen that breaks down the assets in the account. The analysis reveals the percentage of bonds, stocks, and short-term reserves. Users can also set a pre-defined target such as conservative or aggressive growth, and compare the account against the model portfolio.
Vanguard Review: Pros
- 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)
- No ACAT fee
Vanguard Review: Cons
- High commissions for many investors
- If account is not signed up for electronic statements and it's under $10,000, $20 annual account service fee is charged for each Vanguard fund
- Annual IRA fees: $25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans (waived if you go paperless or have $10,000 in your account), $20 for 529 plan
- Poor trading tools
- 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 fees
Vanguard Brokerage Review Summary
Vanguard is a juggernaut in the world of personal finance. They have been making waves in the financial services industry ever since their
founding in 1975 by John Bogle. Bogle founded Vanguard on the premise that well-diversified low-fee funds would outperform most other investment choices.
Since then, Vanguard has offered their signature ETFs and other funds with some of the lowest fees on market. The company has grown, and now offers IRAs
and investment brokerage accounts to investors who want to setup an account with them.
But there is a reason Vanguard Group is well known for its mutual funds and not for its brokerage services. High trading commissions for active investors
(unless they are rich), and terrible trading and research tools make it hard for the firm to compete effectively in the extremely dynamic industry
of online investing and trading.
Vanguard offers several tiers of service: depending on the total amount of assets users invest with Vanguard, their transaction
fees and other costs can vary quite substantially. For example, several of Vanguard’s mutual funds offer different “share classes,”
with decreasing share cost and expense ratios available to those who can make a larger initial investment. The lowest initial investment
is $1,000, and applies to, among others, all of Vanguard’s “Target Retirement” funds. These are a good option for IRA investing,
claiming to maintain an appropriate balance of assets based on the indicated retirement date. Also, once an IRA is established and the
initial investment is made in one or more funds, recurring automatic investments of as low as $1 can be made and are never subject to
any transaction fees. Users should keep in mind, however, that each fund owned will incur an annual fee of $20 that can be easily
avoided simply by signing up for account access on Vanguard.com and agreeing to receive statements and other information electronically.
Vanguard’s tiers of service make a difference here as well: individuals with assets totaling more than $50,000 are never subject to these fees.
The company charges annual fees for IRA accounts: $25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans
(waived for paperless or $10,000+ accounts), and $20 for 529 plan. Because of that and the high investing commissions the firm did not make it into our
Best Brokerages for IRA list.
The main advantage Vanguard offers, is their own ETFs that clients could get commission-free (of course, there is expense fee charged by the ETF) as well as
their low cost mutual funds. We also like free dividend reinvestment and an ability to dollar-cost-average mutual funds investing.
Because of all the above reasons, we recommend Vanguard Brokerage mostly to customers who want to invest almost exclusively in
Vanguard's own family of mutual funds and ETFs. For everybody else there are better Online Brokerage Firms
None right now.
Reviewed by Brokerage-Review.com on
Reviewed by Editor and 40+ Vanguard customers.