Ally Invest versus Vanguard

Ally Invest vs Vanguard


Ally Invest or Vanguard - which is better in 2019? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.



Overview


Investors choose Ally Invest or Vanguard for very different reasons. While one emphasizes low fees and commissions, the other is known for its selection of index funds and long-term investing. This article will compare the two brokers and see which one is better - Vanguard or Ally Invest.

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Ally Invest $4.95 $9.95 $4.95 + $0.65 per contract $0 $0
Vanguard $7-$20 $8-$35 $20 + $1.00 per contract $20* see

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Ally Invest
Vanguard


Mutual Funds and ETF's


Vanguard traders have access to one of the largest selections of mutual funds in the industry. The broker's website has over 16,000 mutual funds available for purchase. More than 2,000 come with no load and no transaction fee. Of this group, 127 are Vanguard funds. These securities have expense ratios well below 0.50%, with some below 0.10%. There is a $35 transaction fee for mutual funds that aren't NTF products.

Ally Invest also offers mutual funds, although it provides a much smaller selection. The broker's mutual fund screener returns roughly 8,500 securities that are open to new investors. Load funds have no transaction fee, while no-load products cost $9.95 per transaction. The fee is applied to sales, purchases, and exchanges.

Both firms offer trading in ETF's. Vanguard manages its own lineup of exchange-traded funds. There are 55 in total, and these have expense ratios below 0.40%, with many at 0.10% or lower. The Vanguard ETF's have no load and no transaction fee. Unfortunately, Ally Invest does not offer any ETF's that are commission-free.


Can I Buy Vanguard Funds on Ally Invest?


There are many fund families available to Ally Invest mutual fund investors. Vanguard is one of them, providing 171 funds. Most Vanguard funds have a $3,000 minimum purchase amount, although a few have higher or lower minimums. Because every Vanguard fund is no load, buying, selling, or exchanging one of them costs $9.95 at Ally Invest.


Customer Service


Traders at Vanguard can reach out to a company associate Monday through Friday over the phone between 8:00 am and 10:00 pm, EST. The broker's website also has an internal messaging system. Unfortunately, there are no weekend hours, the broker doesn't have any brick-and-mortar locations, and the Vanguard website doesn't have on-line chat. The company does have an affiliate that provides financial advice for an additional fee.

Ally Invest customers can contact an agent by phone 24/7. The available hours are 8:00 am until 6:00 pm, EST. Unlike Vanguard, Ally Invest does have an on-line chat function on its website. But like Vanguard, Ally Invest does not have any weekend hours and doesn't have any local branch offices. An affiliated company called Ally Managed Portfolios provides portfolio management services for a small fee.


Promotions


Ally Invest: Up to $3,500 cash bonus + commission free trades for new accounts.

Vanguard: no promotion right now.



Trading Technology


Because Vanguard doesn't have a desktop platform, the broker's website is where trading and account management take place. It can be difficult to navigate at times. A search field in the upper-right corner can make finding information easier. Orders for securities are submitted through simple web pages. There is no trading bar on the website. Charting is elementary with 4 graph styles. Comparisons can be made to an index or other stocks. There are a small number of technical indicators. A graph cannot be shown full screen. The broker does provide screeners for securities, but it can be difficult finding them on the website.

Ally Invest's website is a little easier to navigate than Vanguard's. The broker also has two desktop platforms: Ally Invest LIVE and Quotestream. The former is free for all traders, while the latter requires eleven commissionable trades per month. The broker's website also has a trade bar that appears at the bottom of the window. It provides important data and order entry. Unlike the Vanguard site, Ally Invest's charting software allows a graph to be shown full screen.


Ally Invest versus Vanguard


Mobile Platform


Vanguard customers can use a mobile app on iPad, iPhone, Android, or Kindle Fire. The platform has several valuable functions, including order entry for stocks, ETF's, and mutual funds. There is also mobile check deposit and basic security research. A nice feature that Vanguard's app has that most other brokers don't offer is the ability to download account statements in pdf format. Unfortunately, the Vanguard app only has charts for indexes, not stocks.

Ally Invest has platforms for iPad, iPhone, iPod touch, Android, and mobile web. Basic research can be conducted on stocks. There is no mobile check deposit on the broker's app. Neither the Vanguard app nor Ally Invest's app has live streaming of financial news.


Vanguard vs Ally Invest

Fees, Commissions, and Account Minimums


Ally Invest has a simple, flat commission schedule. Equity trades are just $4.95, one of the lowest charges in the brokerage world. Derivatives are an additional 65ยข per contract. Executing a trade over the phone with a company associate is $24.95. A margin debit under $5,000 costs a rather steep 9.50% right now.

Active traders - those who make 30 or more trades per quarter as well as clients with $100,000 account balance - get lower pricing at Ally Invest: $3.95 per stock or ETF trade and 50 cents per option contract.

The pricing schedule at Vanguard is more complicated than Ally Invest's. Small accounts (defined as smaller than $50,000 invested in Vanguard funds) are charged $7 for the first 25 trades per year, and $20 for every trade after. Options cost $1 plus a $20 base charge. Larger accounts receive lower commissions, including free trades in some cases.

Using a live representative at Vanguard over the phone to place a trade costs between $0 and $25, depending on account size. A debit less than $5,000 in a margin account currently costs 7.75%.

Vanguard has some $20 annual fees that can be avoided by enrolling in electronic communications. Investing $50,000 or more in Vanguard mutual funds or ETF's will also eliminate Vanguard's charges.

Ally Invest requires no minimum deposit to open a securities account, and neither does Vanguard.


Ally Invest vs Vanguard: Results


Ally Invest (read review) clearly outperforms in the area of trading technology, especially in desktop tools. Its easy commission schedule is less complicated and much lower for a majority of investors than Vanguard's variable system. But Vanguard (read review) does better in the fund category.