Vanguard vs Fidelity


Compare Fidelity Investments versus Vanguard—which is better for fees, IRA/Roth accounts, online stock trading, and mutual funds investing in 2022?


Fidelity vs Vanguard Comparison


If you’re looking for a reliable brokerage firm, look no further than Vanguard and Fidelity Investments. These two companies have trillions of dollars in client assets and have decades of reliable and trustworthy service. But which one should you choose? Here is the answer:


Pricing


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Fidelity $0 $49.95 $0.65 per contract $0 $0
Vanguard $0 $20 $1.00 per contract $20* $20*
Firstrade $0 $0 $0 per contract $0 $0


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Fidelity
Vanguard
Firstrade


Promotions


Fidelity: Get $0 stock commissions.

Charles Schwab: Get commission-free online stock trades.

Firstrade: Get 2 FREE stocks and $0 commission in ALL trades!



Category Number One: Available Investments


Inside of self-directed accounts, Vanguard clients get to buy and sell the following asset classes:

  • Fixed-income securities
  • Equities
  • Options
  • ETF’s
  • Closed-end funds
  • Mutual funds

The above securities trade on US exchanges. Fidelity has the same list of assets but adds foreign stocks (over 20 exchanges worldwide are available).

Both firms manage their own lists of funds, including mutual and exchange-traded products. Vanguard and Fidelity funds are highly rated and come with very low expense ratios.

And then there’s managed account services. Both firms offer them. At Vanguard, customers can sign up for an automated portfolio management service. The program is free for the first 90 days. After that, it costs just 20 basis points per year, and could be less than that amount with certain fund rebates.

Vanguard also offers old-school, human-managed services. These have steep minimums and start at 0.30% annually.

Fidelity has both types of managed accounts. Its robo program is free for the first $10,000. After that, the annual fee is 0.35%. The brokerage house has many old-school packages with a variety of fees and minimums.

Winner: Fidelity


Category Number Two: Customer Service


A Fidelity representative can be reached over the phone 24 hours a day, 7 days a week. For a less human experience, the brokerage firm has a nameless virtual assistant that appears on its website and mobile app. During our trial of it, it was able to answer some questions, but not all. If you don’t have any luck with it, a human rep is available within the same interface.

The broker’s website has a very extensive self-help section. Here, we found many features, including the ability to change account ownership, download tax documents, establish a transfer lockdown, add a beneficiary, and much more.

Of final note is the company’s nationwide branch network. There are currently a couple hundred Fidelity brick-and-mortar offices located across many U.S. states.

Vanguard has no branch network. It does offer phone service, though. The hours are 8:00 am until 8:00 pm, EST. There are no weekend hours.

None of Vanguard’s software platforms offer chat service, either in AI or human format.

Winner: Fidelity


Category Number Three: Margin Trading


Self-directed traders, but not managed account customers, can use other people’s money to buy securities. This of course is called margin trading, and both Vanguard and Fidelity offer the service.

Here are Vanguard’s rates:

Debit Balance Margin Interest Rates
under $19,999 10.00%
$20,000 – $49,999 9.50%
$50,000 – $99,999 9.00%
$100,000–$249,999 8.50%
$250,000–$499,999 8.25%
$500,000–$999,999 6.75%
above $1,000,000 6.25%

Fidelity also has a tiered schedule:

Debit Balance Margin Interest Rates
above $1,000,000 5.50%
$500,000 – $999,999 5.75%
$100,000 – $499,999 8.075%
$50,000 – $99,999 8.325%
$25,000 – $49,999 9.325%
$10,000 – $24,999 9.325%
$0 – $9,999 9.825%

Winner: Pretty close


Category Number Four: Websites


Many resources will be found on the Vanguard and Fidelity websites. The former has recently been updated. The new My Accounts tab in the top menu is where most trading and account management tools will be found. The search bar is still in the upper-right corner, and this is indispensable in finding information and getting quotes on the Vanguard site.


Vanguard or Fidelity


Vanguard’s trade ticket has 4 order types and 2 time-in-force options. Charts have some decent features, like technical indicators and comparisons, but a graph cannot be displayed the width of the monitor. A chart also cannot be saved or exported.

On Fidelity’s website, it is possible to save the settings of a graph (things like time horizon and technical studies used) and to export a graph (as an image or spreadsheet).


Fidelity or Vanguard


Fidelity’s site was also updated recently. This modification saw the elimination of its pop-out trade ticket. The web-based order form now has 8 trade types and 5 duration choices.

Winner: Fidelity


Category Number Five: Desktop Software


Fidelity clients who find the website lacking can upgrade to Active Trader Pro. This is the company’s very good desktop trading platform. During our trial of it, the software really lived up to its name. We liked many features, including these highlights:

  • Direct-access routing
  • Conditional trade ticket
  • Excellent charting tools
  • Ability to trade across multiple accounts
  • Real-time analytics
  • Streaming video news
  • Time & sales data
  • Multiple layouts

Vanguard vs Fidelity


Vanguard doesn’t have any desktop software.

Winner: Fidelity


Category Number Six: Mobile Apps


Although Vanguard doesn’t have a desktop program, it does have a mobile app. It is a very simple platform with just a few tools on it. There is no charting of any kind, unfortunately. On the day we conducted our research, stock profiles were not available. There was simply a message stating that Vanguard is working on them. The software’s order form has 4 order types (it’s the same ticket from the website).


Vanguard versus Fidelity


Our experience on Fidelity’s app was much different. The broker’s mobile software is quite advanced with many features. These include mobile check deposit, an artificial intelligence, market news arranged in tiles, bill pay, and much more.


Fidelity vs Vanguard


Charting on Fidelity’s app can be done in horizontal mode. There are 5 display styles and 8 technical indicators.

Winner: Fidelity


Category Number Seven: Research & Education


The Investor Resources & Education tab on the Vanguard site is the starting point for the broker’s learning materials. During our investigation, we found many tools like a retirement income planning calculator and a 529 deduction calculator.


Vanguard versus Fidelity Investments


The Vanguard site also hosts brief articles and lengthy pdf reports on a variety of economic and investment topics. Examples include:

- Investing for beginners: Asset allocation & diversification
- Vanguard economic and market outlook for 2022
- The case for low-cost index-fund investing

On the Fidelity site (and mobile app), we found another impressive treasure trove of educational materials. These come in a variety of formats, including podcasts, on-demand and live webinars, in-person events when there’s not a virus pandemic, self-guided courses, information on global markets, and more.


Fidelity or Vanguard


For stock reports, Vanguard uses two sources: Argus and MarketGrader. Fidelity, by contrast, provides up to eleven reports, depending on the stock. To actually find investments, Fidelity has much better screeners than Vanguard with more search variables.

Winner: Fidelity


Category Number Eight: Options Trading


As mentioned in the first section, both Fidelity and Vanguard offer trading in option contracts. But the similarity stops there.

Vanguard’s website (but not its mobile app) offers chains for calls and puts. These are not traditional chains, though, as calls and puts cannot be shown side-by-side. Only one option type can be shown at a time.


Vanguard or Fidelity Investments


There are no multi-leg strategies at Vanguard, and even worse, it’s not possible to build your own. The company’s software has no derivative analysis tools at all.

Over at Fidelity, we found option strategies on all three of the broker’s trading platforms (mobile app, website, and desktop system). Examples include butterflies, iron condors, and straddles. Fidelity has some really useful option tools, including:

  • IV index
  • Probability calculator
  • Greek values
  • Profit-loss diagrams
  • Options scanner with many search criteria

Fidelity Investments versus Vanguard


Winner: Fidelity


Category Number Nine: Extra Services


Individual Retirement Accounts: Available at both firms. Fidelity has more IRA types, including a Minor IRA.

Extended Hours: Fidelity offers both pre-market and after-hours trading. Vanguard only has the after-hours session.

Banking Tools: Disappointingly, Vanguard has discontinued its cash management features. Fidelity still offers check writing and a Visa debit card with too many perks to list here.

Fractional Shares: Fidelity, but not Vanguard, has software that can trade stocks and exchange-traded funds in whole dollars.

Periodic Mutual Fund Investing: Vanguard customers can sign up for automatic mutual fund purchases of Vanguard funds. Fidelity offers the same service for Fidelity funds, Vanguard funds, and all other funds.

Initial Public Offerings: Only available with a Fidelity account.

Winner: Fidelity


Recommendations


Mutual Fund Trading: Using Fidelity’s mutual fund screener, we located more than 9,000 mutual funds that are open to new investors. Vanguard has less than 7,000. Plus, Vanguard’s website heavily advertises Vanguard funds over other funds, and its screener is hard to locate because of this. We definitely recommend Fidelity.

ETF & Stock Trading: With fractional-share trading, excellent research, and a very good desktop platform, Fidelity is an easy choice.

Beginners: Fidelity has better investment education. Combined with outstanding customer service, it’s a no brainer.

Long-Term Investors and Retirement Savers: Both companies do well here. Advantages of Fidelity include annuities, small business retirement plans with no fees (Vanguard’s has fees), and a large network of branch locations.

Small Accounts: Neither firm has any fees or minimums for self-directed accounts. For robo investing, Vanguard has a $3,000 minimum. Fidelity has no minimum.


Vanguard vs Fidelity Comparison Results


Vanguard may attract a lot of wealthy clients, but it is no match for Fidelity’s outstanding services.

Anyone looking for the top-rated brokerage firm on the market should go with TD Ameritrade or read TD Ameritrade review.


Vanguard Fees vs Fidelity Fees



Fidelity Investments


Vanguard

  • Stocks and ETFs: $0
  • Stocks and ETFs broker assisted: $32.95
  • Options: $0.65 per contract
  • Mutual funds: $49.95 to buy; $0 to sell. $49.95 if sold within 2 months
  • Bonds and CDs (new issues): on a net yield basis
  • Bonds and CDs (secondary issues): $1.00 per bond ($250 maximum)
  • Investment products: stocks, bonds, mutual funds, options, commercial paper, UITs, ETFs
  • Fidelity minimum deposit to open account: $2,500 ($0 for Rollover IRA; $2,500 or $200 per month for ROTH and Traditional IRA)

  • Stocks and ETFs: $0
  • Options: $1 per contract
  • Mutual funds: Vanguard mutual funds - free. Most others - $20 per transaction
  • Commercial paper: $50 per transaction; minimum purchase: $100,000
  • U.S. Treasury: Commission-free
  • Mortgage-backed securities: $50 per transaction; GNMA minimum purchase: $25,000
  • Investment products: stocks, options, mutual funds, bonds, CDs, foreign securities, insurance, commercial paper, ETFs
  • Vanguard minimum deposit to open account: $0; most Vanguard mutual funds have a minimum investment of $3,000


About the Author
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.
Updated on 1/13/2022.