Charles Schwab vs Vanguard

2019 Vanguard against Charles Schwab - which is better? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.

Broker Comparison

Vanguard and Charles Schwab are two popular brokerage firms with a lot of clients. Let's run the two firms through their paces and determine which is better - Charles Schwab or Vanguard?

Broker Fees Stock/ETF
Mutual Fund
Annual IRA
Charles Schwab $4.95 $76 ($0 to sell) $4.95 + $0.65 per contract $0 $0
Vanguard $7-$20 $8-$35 $20 + $1.00 per contract $20* see
Firstrade $0 $0 $0 $0 $0

* Vanguard is charging $20 annual maintenance fee (waived if user chooses to receive statements and other information electronically).

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Charles Schwab

Fees and Account Minimums

Schwab’s charge for trading stocks and ETF's is $4.95, while Vanguard has a range between $0 and $20. Customers with under $50,000 in Vanguard ETF's and mutual funds pay $7 for the first 25 trades and $20 thereafter. This fee schedule is on an annual basis. The majority of Vanguard customers will most likely fall in this category. Twenty five trades per year averages to slightly more than 2 trades monthly at $7.

At Schwab, derivative traders pay an extra $0.65 per options contract. Vanguard clients pay $1 per contract in addition to a base charge of $1, $7, or $20, depending on the account's size. Traders with under $50,000 in Vanguard ETF's and mutual funds pay $20 plus $1 per contract.

Using a live rep at Schwab to make a trade is $33.95. As in the other cases, Vanguard's fee is variable, and is based on account size. It ranges between $25 and $0.

Brokerage accounts at both firms have no inactivity or maintenance fees (at Vanguard, clients with less than $50,000 invested in Vanguard funds must enroll in electronic delivery of statements). Schwab's initial deposit requirement is $1,000, although this minimum can be waived by opening a Schwab bank account along with the securities account. Vanguard has no initial deposit requirement. List of all Schwab fees is here and Vanguard fees are under this link.

Due to Vanguard's complicated fee schedule, Schwab wins this category.

Mutual Funds and ETF's

Traders at Schwab have access to more than 5,000 mutual funds. Of these, 3,500 are OneSource funds, which carry neither load nor transaction fee. Mutual funds that do come with a transaction fee are a rather pricey $76 on the purchase side, although there is no charge to sell.

Vanguard offers more than 16,000 mutual funds. Some of these have no transaction fee and no load. Funds that do carry a transaction fee are $35 in a small account (less than $50,000). Accounts with larger balances pay either $8 or $20. The fee applies to buys, sells, and exchanges.

Schwab has more than 200 ETF's without trading fees, while Vanguard has 55. Vanguard ETF's have an average expense ratio of 0.12%. The net expense ratios of the Schwab funds range between 0.03% and 1.00%.

Vanguard and Charles Schwab are pretty close here.

Vanguard vs Schwab

Can You Buy Vanguard Funds Through Charles Schwab?

For investors who are wondering "Can I buy Vanguard funds through Charles Schwab?", we offer the article exploring this topic in detail under this link.

Research and Education

Investors at Schwab have access to third-party stock reports for free, from multiple providers. Traders also receive at no cost Schwab Equity Ratings, which scrutinizes over 3,000 stocks. Furthermore, the broker provides report cards on mutual funds, which traders can access free of charge. Schwab has helpful videos and other instructional material on a section of its website called Learning Center.

Vanguard has helpful information on education and retirement planning. There are informational pamphlets on its site in pdf format. The website has effective and user-friendly screeners. Third-party reports on stocks are available to Vanguard clients from Argus and MarketGrader free of charge. The Vanguard site has fewer instructional videos on its site compared to Schwab.

Schwab wins this category.

Customer Service

Customer service over the phone is available at Schwab 24/7. The broker has over 325 branch locations in the United States. Schwab offers customer service in Chinese. Furthermore, the company offers phone numbers for customers who travel internationally.

Vanguard offers phone service during the weekday. The broker does have a phone number for investors outside the U.S. Unfortunately, the firm does not have a nationwide network of branches.

Schwab wins this category, too.

Charles Schwab vs Vanguard for IRA Accounts

When comparing Charles Schwab and Vanguard IRA accounts one thing stands out - both brokers don't charge traditional IRA and ROTH IRA setup and annual maintenance fees. Vanguard however, has the following annual fees: $25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans, and $20 for 529 plan.

Schwab has some useful calculators to help investors determine if and when distributions from an IRA must be taken under IRS regulations. The calculators specify the minimum amount that must be withdrawn from the account, and when the withdrawal must occur. Finally, the calculator determines when the account will be closed.

Vanguard Personal Advisor Services is an advisory service for Vanguard customers who have an account balance of at least $50,000. Users of this service receive investment advice and a financial plan.

Schwab gets this category.

Trading Tools

Schwab's web site is intuitive, and topics are easy to find. An advanced platform named StreetSmart Edge (review) is available. Traders who have a balance of $1,000 or more can use the platform for free.

Vanguard's site is more difficult to navigate than Schwab's. Trading takes place within the web browser with user-friendly trade pages. Unfortunately, the broker doesn't have an advanced trading platform.

Vanguard loses the category, again.

Vanguard vs Charles Schwab

Mobile Platforms

Mobile platforms are available at Schwab for Android, iPhone, iPad, Apple Watch, Kindle Fire, and mobile web. The app is user friendly. Users can place trades, transfer funds, get in touch with customer service, make a mobile check deposit, watch CNBC, or pay bills.

Vanguard offers apps for Android, Kindle Fire, iPad, and iPhone. The interface is easy to navigate. Traders can contact customer service, place trades, or make a mobile check deposit. Account documents can be accessed in pdf format. Unfortunately, there's no live streaming of business news, although there are some Vanguard videos on the app.

Schwab wins the category, once again.

Banking Features

A Schwab checking account is available, and comes with checks and a debit card at no cost. ATM fees are reimbursed around the world. Schwab Bank is now the core account for Schwab securities accounts.

Vanguard offers a cash management account. However, customers must have an incredible $500,000 in Vanguard funds to open the account. Both checks and the debit card carry fees for accounts below $1,000,000.

Schwab wins this category easily.

New Account Promotions

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.

Vanguard: none right now.

All broker promotions »

Charles Schwab vs Vanguard: Which is Better?

Schwab (account review) came out ahead in seven categories, there was one tie, and Vanguard (account review) failed to win even one category. It's a total victory for Schwab. Nevertheless, Vanguard can be a good option for traders with at least $50,000 to invest in Vanguard funds.

Neither of these brokerage firms offers access to an online investor community, where users can ask questions, follow more experienced members, and get trading and investment tips. They also don't have practice accounts (trading simulation with virtual money), that allows users to try trading strategies without risking real money. Anyone new to investing should take a look at our Stock Brokers for Beginners article.

Review discount online brokerage firms comparison: Vanguard or Charles Schwab? Differences between investment companies. Recommendation for stocks, options, ETFs, mutual funds, bonds investors. Charles Schwab versus Vanguard for beginner investors, long term, individual retirement accounts, active/day traders. See what stock broker service is better, cheaper, offers lower fees, cost, rated higher and easier to use. Which broker should you choose?