The Faceoff
Investors look to Vanguard and Etrade for a variety of financial products and services. Let's make a detailed assessment of the two brokers and determine which firm is better - Etrade or Vanguard?
Cost
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Etrade
|
$0
|
$19.95
|
$0 + $0.65 per contract
|
$0
|
$0
|
|
Vanguard
|
$7-$20
|
$8-$35
|
$20 + $1.00 per contract
|
$20*
|
$20*
|
|
Firstrade
|
$0
|
$0
|
$0
|
$0
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
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Etrade
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Vanguard
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Firstrade
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Commissions, and Account Requirements
Etrade customers pay $0 for stock and ETF trades, while Vanguard clients are charged on a sliding scale between $0 and $20. Vanguard charges $7 for the first 25 trades and $20 thereafter for accounts with under $50,000 in Vanguard assets. Many Vanguard customers will most likely fall in this category. Traders can receive 2 trades monthly on average at $7 with this commission format.
For derivative traders, Etrade charges an extra $0.65 per option contract. Vanguard clients pay $1 per contract for option trades plus a base charge of $20, $7, or $1, depending on account size. Investors with under $50,000 in Vanguard funds pay $1 per contract in addition to a $20 commission.
Vanguard punished active traders with huge, $20 per trade commission.
Using a living, breathing broker at Etrade costs $25 to place a trade. As in the other cases, Vanguard's fee is variable and is determined by account size. The commission ranges between $25 and $0.
Neither firm charges inactivity or maintenance fees for brokerage accounts (accounts at Vanguard with under $50,000 deposited in Vanguard ETF's and mutual funds must sign up for electronic statements and other documents). Etrade has a $500 minimum opening deposit requirement for a regular brokerage account and no minimum for a retirement account. Vanguard requires no minimum deposit for any account. IRA's are available at both brokers with no additional fees.
Etrade takes first category.
Mutual Funds and ETF's
Etrade investors have access to more than 8,000 mutual funds. Of these, more than 1,300 carry no transaction
fee and no load. Transaction fee mutual funds are $19.99 to buy, sell, and exchange. The broker has 250+
ETF's that are free to trade.
Investors at Vanguard can trade over 16,000 mutual funds, some of which come with no load and no transaction
fee. Mutual funds that do have a transaction fee are $35 in a small account (defined as less than $50,000 in
Vanguard assets). Larger accounts are charged $20 or $8. The fee is applied to sales, purchases, and exchanges.
Vanguard customers can also trade 600+ ETF's with no commissions.
Overall, it's pretty even here.
Research and Education
Etrade offers its clients articles and on-demand videos. The broker also hosts in-person seminars at some of its local branches. The firm covers topics such as options, bonds, and IRA’s. Also available are stock reports from multiple analysts free of charge. The broker has screeners for all major securities.
The Vanguard website has useful information on retirement, education, and other important topics. There are informative pamphlets in pdf format. The broker has user-friendly screeners for stocks, fixed income, mutual funds, and ETF's. Third-party reports on stocks are available from Argus and MarketGrader at no cost.
Etrade has more educational resources on its website, so Vanguard loses the category.
Customer Service
Etrade has 30 brick-and-mortar locations throughout the United States for investors who want some personal assistance. Customers can also contact the firm by phone around the clock. Furthermore, Etrade can be reached by fax, e-mail, or an on-line chat system.
Vanguard representatives can be reached during the weekday. The firm has a phone number for clients who travel outside the United States. Regrettably, the broker doesn't have local branches.
Etrade wins this category.
Trading Tools
Etrade's website is nicely designed and simple to navigate. Order entry takes place within the web browser for all securities. Sophisticated platforms
are available for active traders, in both browser and desktop versions.
Vanguard's website is not as user friendly as Etrade's. Trading occurs within the web browser with easy-to-use trade pages. Vanguard disappointingly doesn't have an advanced platform for active traders.
Etrade wins here.
Mobile Platforms
Etrade offers apps for Windows phone, iPad, iPhone, Apple Watch, Android phone and tablet, Kindle Fire HD, and Amazon Fire phone. Users can look over stock charts, deposit a check, or pay bills. The app has a CNBC video library, and live steaming is available for active traders.
The Vanguard app can be used on Android, Kindle Fire, iPad, or iPhone. The interface is simple and easy to use. Traders can reach out to customer service, place a trade, or deposit a check. Conveniently, account documents are available in pdf format. The app does have some Vanguard-created videos, but unfortunately, live steaming of business news is not available.
This category goes to Etrade.
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Banking Features
Etrade offers bank products with FDIC insurance. A checking account comes with checks and a debit card. A link can be established between an Etrade bank account and brokerage account. ATM fee rebates are available for customers who have a minimum balance of $5,000.
Vanguard has a hybrid brokerage-cash management account. However, clients must have a minimum of $500,000 in Vanguard funds to open the account. Checks and a debit card are available, but they come with fees for accounts under $1,000,000.
Etrade wins this category.
Etrade vs Vanguard: Which is Better?
Etrade was victorious in six categories, there were one tie, and Vanguard failed to secure a single victory. Etrade wins by a large margin.
Nevertheless, Vanguard remains a good choice for fund investors, especially those who plan to invest a minimum of $50,000 in Vanguard products.
Anyone looking for $0 commission trades will find a better deal at the
Firstrade.
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