Charles Schwab vs Vanguard


Compare Vanguard versus Charles Schwab - which is better in 2021? IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.



Broker Comparison


Vanguard and Schwab offer different types of broking services to different types of investors. Because they differ so significantly, you’ll definitely want to familiarize yourself with their offerings in different categories. That’s where we come in.


Commissions


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Charles Schwab $0 $49.95 $0.65 per contract $0 $0
Vanguard $0 $20 $1.00 per contract $20* $20*
Ally Invest $0 $9.95 $0.50 per contract $0 $0


Services


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


What Types of Investments Are Available?


Vanguard customers can trade equities, fixed-income securities (including CD’s), options, mutual funds, closed-end funds, and ETF’s. Available account types include 529 college savings accounts, custodial accounts, individual 401(k) plans, and IRA’s.

Schwab offers futures contracts plus the same investments as Vanguard. The addition of futures obviously will appeal to some traders. We also found information on international trading inside our Schwab test account. Vanguard doesn’t have the same emphasis.

As for accounts, Schwab has trust, charitable, and estate accounts. Also on tap are self-employed 401(k)’s, IRA’s, 529 savings plans, and custodial accounts.


What Trading Tools Do the Two Brokers Offer?


Vanguard’s website is where its customers place their trades. The brokerage firm doesn’t offer any desktop software. Moreover, there is no browser platform or trade bar on the website; so trading takes place on simple web pages.


Vanguard or Schwab


The broker’s order ticket offers just a few order types (market, limit, and stop varieties) and two duration choices (day and GTC). Obviously, this is not the best software for advanced trading. One thing we did like on the broker’s order ticket is a link to information on how to place a trade.


Vanguard versus Schwab


Charting on the Vanguard site is just as simple. A graph cannot be expanded the width of the screen, and there are just a few technical studies and chart styles. There are no drawing tools.

Navigating Vanguard’s site can be difficult at times. We frequently weren’t able to find what we were looking for. A search box in the upper-right of the site does help.

Transitioning to Schwab, we see a marked improvement. The broker’s website has a trade bar. Although it can’t actually submit orders, it does provide quick security data.


Schwab vs Vanguard


The website itself is much better than Vanguard’s. Schwab’s menu is very helpful, and it was easy for us to navigate. Charting on the site is also better than Vanguard’s, with more graph styles and technical studies.

A step up from the website is Schwab’s browser system, StreetSmart Central. This offers better charting than the website. For example, a graph can be displayed the width of the monitor, and price history can be set to tick.


Schwab vs Vanguard


If you don’t want to use the browser platform, you can use StreetSmart Edge, the company’s desktop software. A lot of advanced features will be found here, such as Level II data, multi-leg derivative strategies, and direct-access to market venues.

While Schwab has developed a skill for Amazon Echo devices, Vanguard has not.


And What About Mobile Trading?


Schwab has a mobile platform that’s compatible with Apple and Android devices. It offers CNBC at no cost. The app offers Asian and European versions of the business news channel, although we rarely are able to access them.


Charles Schwab or Vanguard


The trading ticket is pretty simple with just a few choices in terms of durations and order types. We did like the app’s charting program. A graph can be rotated, and there are many tools, such as company events and technical indicators. Schwab’s app can trade options and mutual funds, which isn’t always the case in the brokerage world.

As an example, Vanguard’s app is only able to trade Vanguard mutual funds. If you want to trade other fund families, you’ll have to use the broker’s website. Moreover, the app has no derivative trading capability.


Vanguard vs Schwab


As with Schwab’s app, there is funds transfer and check deposit. We didn’t find bill pay on Vanguard’s app, which is available on Schwab’s. Charting is non-existent on Vanguard’s app. The order ticket is as simple as Schwab’s.

While both apps offer Touch ID, we were required to login with a password on Vanguard’s app for some functions.


What Banking Features Are Available?


Schwab operates its own bank with FDIC insurance, so it offers traditional checking and savings accounts. The checking account has checks and a Visa debit card, and the account has zero fees. ATM charges incurred worldwide are reimbursed, and there’s no limit to this generous policy.

Vanguard offers something called VanguardAdvantage, which is a synthesized investment-bank account. The brokerage firm charges $30 per year for this account and requires half a million dollars just to open it. Withdrawals at PNC ATM’s cost nothing.


Who Has Better Customer Service?


Schwab has agents on the phone 24/7. On top of this service, it also offers human chat, although we’re still waiting for a robo service. The self-service section on the Schwab website is very good with lots of functions, such as the ability to turn the debit card on or off. The brokerage firm also offers 345 brick-and-mortar offices if you would rather bypass all the technology and talk to someone in person.

Vanguard only provides customer support Monday through Friday, and not overnight. There is no chat service on the broker’s website, and forget about branch locations. Although we were able to find some self-service functions on its website, they were more difficult to locate than Schwab’s.


Which Broker Is Better for Mutual Funds and ETF’s?


After logging into our Schwab trial account, we were able to locate more than 5,800 mutual funds using the website’s screener. More than 3,300 of these come with zero transaction fee and zero load.

On Vanguard’s site, we found more than 7,000 mutual funds that were open to new investors. Over 2,900 of these are no-load, no-transaction-fee securities.

As for ETF’s, Schwab and Vanguard customers have access to all exchange traded funds commission-free.

But what about fund resources? Vanguard’s website doesn’t quite offer the same level of information that we found on Schwab’s. For example, Schwab’s screeners offer more search criteria, and they are more user-friendly. Schwab also provides lists of mutual and exchange-traded funds that its financial advisors believe will increase in price more than their peers.


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.




Our Recommendations


For beginners, we recommend Schwab. Its website is easier to use and has more educational materials than Vanguard’s. For example, we found articles and videos on a wide range of topics, from the taxation of investments to placing option trades. Combined with the broker’s online chat and 24/7 phone support, new traders will be better off with Schwab.

For active stock and option traders, we’re going with Schwab. Vanguard’s software simply doesn’t offer the necessary tools do engage in this type of trading.

For global investors, we suggest Schwab. The brokerage firm has a greater emphasis on international securities. It also offers Chinese-language customer service, which Vanguard doesn’t have.

For IRA’s and retirement saving, both brokers have good resources. If you plan to open a SIMPLE IRA, go with Schwab. Vanguard’s SIMPLE plan carries an unnecessary $25 fee.

If you need the best research tools, then we suggest Schwab over its rival. Vanguard’s tools just don’t measure up to Schwab’s.


New Account Promotions


Charles Schwab: Get commission-free online stock trades.

Vanguard: does not offer promotions.



Charles Schwab vs Vanguard: Which is Better?


While Vanguard is able to attract millions of customers, its services don’t quite compete with Schwab’s. Anyone looking for $0 commission trades not just on stocks but also on mutual funds and options will find a better deal at Firstrade.




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