Vanguard 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 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 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|| $0; most Vanguard mutual funds have a minimum investment of $3,000|
We begin our Vanguard review with a new customer sign up information. 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 for customer 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. Vanguard mutual funds expense ratios range from 0.05% to 0.93%; and the firm's 55 ETF's expense ratios range from 0.05% to 0.34%.
So which mutual funds should investors choose for their portfolio? They all differ in performance, portfolio composition and expenses. We did
the research and below list top Vanguard mutual funds in the most popular categories:
Vanguard customers have access to more than 16,000 mutual funds, which is one of the largest selections in the industry. These funds come from hundreds
of fund families. Many of the funds have no load and no transaction fee.
A mutual fund screener is available on the Vanguard website, although it's a little cumbersome to find. It only displays up to 250 results. Users
can narrow down the results by specifying various criteria, such as total return, expense ratio, asset class, or fund category. Additional search
options include manager tenure, turnover rate, beta, and R-squared. Besides the screener, the Vanguard website also has a few articles on mutual
fund investing. Compared to Fidelity and Schwab, the Vanguard site seems to have less educational information on mutual funds and is harder to navigate.
Vanguard mutual funds have a $3,000 minimum initial purchase amount. Non-Vanguard funds vary from $1,000 to $5 million. Some fund families have a
lower investment minimum for IRA's. Vanguard charges $20 for each Vanguard mutual fund with a balance below $10,000. However, this fee can be
eliminated by signing up for electronic delivery of account documents. Transaction-fee funds cost between $8 and $35, depending on account balance.
Vanguard offers Roth, Traditional, Inherited, Rollover, SEP, and SIMPLE IRA's. The fee schedule for these retirement accounts is the same as for a
regular account. There is a $20 account fee, although this can be waived by investing at least $50,000 in Vanguard funds or enrolling in electronic
statements. There are no setup or inactivity fees for an IRA, and there is no minimum deposit to open one.
After logging into the site, Vanguard customers will find good information on IRA's. There is an article that explains the difference between the
Roth and Traditional accounts. There is information on estate planning and converting a 401(k) into a an IRA. A required minimum distribution
calculator estimates the minimum amount that must be withdrawn from an IRA in a tax year based on IRS rules.
Vanguard Website/Trading Platform/Tools Review
Vanguard's website has some good educational tools on it. However, it is not as user friendly as TradeKing'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, only very basic information is displayed for the security. Customers will have to do their stock
The menus on the site are 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 definitely more difficult to navigate than other broker sites.
Advanced Trading Platform
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 available in pdf format. 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.
- 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
- 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
With Vanguard's large selection of mutual funds, the broker is a great option for investors who primarily trade that product. The Vanguard funds
have low expense ratios and cover many asset classes and economic sectors. Combined with 55 Vanguard ETF's that also are free to trade, the
broker is hard to beat in the realm of fund trading.
Vanguard 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 the 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 is well known for its funds and not for its brokerage services. High trading commissions for active investors
(unless they are rich), non-intuitive website design, and basic 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 in Vanguard products, 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 customers pay $7 for the first 25 stock and ETF trades in a year, and the price soars to $20 per trade thereafter if they have less than $50,000
in Vanguard mutual funds and ETF's. Most of Vanguard's customers will be in this category. Investors can receive on average two trades per month
at $7 with this fee schedule.
The main advantage Vanguard offers over most other brokers, 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
Because of all the above reasons, we recommend Vanguard brokerage services mostly to customers who want to invest almost exclusively in
Vanguard's own family of mutual funds and ETFs. For everybody else there are other Online Brokerage Firms
None right now.
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