Fidelity vs. Vanguard Comparison
Highlights:
• Investors at Schwab, Vanguard, and Fidelity can open brokerage and managed accounts.
• All three firms offer financial planning, wealth management, trust creation, and similar services.
• The best trading software will be found at Schwab and Fidelity.
Three of the biggest players in the investing world are Charles Schwab, Fidelity Investments, and Vanguard. Despite this great notoriety, the investing and trading experience can differ quite a bit among these firms.
Pricing
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0.65 per contract
|
$0
|
$0
|
|
Vanguard
|
$0
|
$20
|
$1.00 per contract
|
$20*
|
$20*
|
|
Firstrade
|
$0
|
$0
|
$0 per contract
|
$0
|
$0
|
Services
Promotions
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
Fidelity: Currently, no promotions.
Vanguard: Does not offer promotions.
Category 1: Trading and Investing
For the most complete guidance in investing, the three securities firms in this faceoff provide wealth-management programs that come with a licensed investment advisor who can assist with all sorts of essential financial topics. Examples can include retirement planning and tax-smart investing. Other managed accounts are available that typically come with a smaller list of available services; all three firms have robo accounts.
Then there are the brokerage accounts. Online self-directed trading is possible with these accounts, which provide access to these financial vehicles:
• Mutual funds
• Exchange traded funds
• Closed end funds
• Option contracts
• Stocks
• Fixed income
The equity category at Schwab and Fidelity, but not at Vanguard, includes over-the-counter (OTC) stocks and foreign assets. Fidelity has cryptocurrencies, and Schwab clients can trade forex and futures.
Winner: Draw between Fidelity and Schwab
Category 2: Mobile Apps
Vanguard clients get to use one mobile app; the software is very elementary. During our test drive of the platform, we found no charting tools at all. There is an order ticket, though; it can be used to submit trades for stocks, ETFs, and mutual funds. Options cannot be traded on the app.
Fidelity customers get to use one app, and option contracts can be traded on the platform. Multi-leg strategies are integrated, which helps to increase the level of trading. Charts on the Fidelity app can be displayed horizontally and vertically, and there are several useful tools.
Traders at Schwab get to use two apps. One of them is called thinkorswim, and this one is the advanced app. It can be used to trade futures and forex, and charts have several hundred technical studies. Simulated trading through a feature called paperMoney is an added bonus.
Winner: Schwab
Category 3: Websites
Schwab’s website recreates thinkorswim for web-browser trading. thinkorswim in this mode generates its own browser window, and here, there are some useful tools that advanced traders will want to use (think Level II quotes). The site itself has advanced order tickets and really good research tools.
The Fidelity site doesn’t have a discrete platform, although the site is still very good. We found trade recommendations from several independent analysts, including Merrill Lynch, Oppenheimer, and Deutsche Bank. Charts and the order ticket are on a high level, and option traders will really like the advanced derivative tools.
Vanguard’s site only has chains for calls and puts, so option traders will be disappointed. Charts, on the other hand, do have several useful gadgets, including comparisons and indicators. There are no drawing tools, though. The order ticket has discrete selections for buy to cover and sell short but there are no other advanced features.
Winner: Schwab
Category 4: Desktop Software
Website trading is about as advanced as Vanguard gets; it has no desktop platform. Schwab and Fidelity, on the other hand, do have desktop programs. At Schwab, the software continues the thinkorswim name and boasts some really sophisticated features. We enjoyed using these:
- Backtesting tool
- Direct access to market centers
- Full-screen charting with right-click trading
- Advanced order ticket with many pro-level trade choices
- Price ladder
- Live streaming of video news
Fidelity customers get to use Active Trader Pro. This advanced desktop program lives up to its name with some professional features. Many of the resources mentioned above for thinkorswim are on ATP; backtesting is not one of them, though. ATP also doesn’t offer paper trading, which thinkorswim does have.
Winner: Schwab
Category 5: Margin
Margin trading is possible in brokerage accounts at all three firms. Although margin does open up the possibility of trading option spreads, Vanguard does not offer spread trading. As for margin pricing, here are the ranges:
| Vanguard: | 12.75% to 10.75% (negotiated rates above $500,000) |
| Fidelity: | 12.575% to 8.575% |
| Schwab: | 12.575% to 10.825% (negotiated rates above $500,000) |
Winner: Tie between Fidelity and Schwab
Category 6: Bonus Features
With a brokerage account at Fidelity or Schwab, it’s possible to trade Initial Public Offerings.
Schwab and Fidelity offer periodic mutual fund investing in all fund families. Vanguard offers the service for Vanguard funds.
All three investment firms in this contest offer a Dividend Reinvestment Plan.
Fractional-share trading is possible in some form at all three companies. Vanguard restricts the service to Vanguard ETFs. Schwab has it for stocks, and Fidelity has it for stocks, ETFs, and cryptocurrencies.
Investors at Fidelity and Schwab can trade during extended hours. Only Schwab has overnight trading in select securities. Cryptocurrencies at Fidelity trade 24/7, while futures and forex at Schwab are available around the clock but not 7 days a week. Vanguard offers post-market trading in select securities.
An Individual Retirement Account can be opened at any investment firm in this three-way comparison. As with other account registrations, an IRA at Vanguard is subject to a $100 closeout fee.
All three firms offer a fully-paid securities-lending program.
Winner: Another tie between Fidelity and Schwab
Recommendations
All three brokerage firms will be decent for long-term investing and retirement planning. Fidelity and Schwab will be a little better than Vanguard due to their annuities and branch locations.
For beginning investors, we defend a managed account at any firm in this contest (even better would be an advisory account with a human financial planner).
With their robust software, Fidelity and Schwab are really good for frequent stock trading.
Small investors should go with Fidelity for managed accounts (its robo service has a $10 minimum, the lowest in this survey). Brokerage customers should choose Fidelity, too, due to its fractional-share service.
Finally, we suggest Fidelity or Schwab for mutual funds. Fidelity has the largest number in this contest (more than 9,000), while Schwab boasts the best fund screener.
Promotions
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
Fidelity: Currently, no promotions.
Vanguard: Currently, no promotions.
Conclusion
Although Vanguard has a very popular name in the asset-management world, it doesn’t deliver a spectacular performance for retail investors. Fidelity and Schwab, on the other hand, can’t be beat.
Updated on 3/5/2025.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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