USAA versus Vanguard

USAA vs Vanguard


Vanguard or USAA brokerage - which is better in 2017? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.



USAA versus Vanguard Comparison


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
USAA $8.95 $45 $8.95 + $0.75 per contract $0 $0
Vanguard $7-$20 $8-$35 $30 + $1.50 per contract $20* see

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


Vanguard vs USAA - Pricing, Commissions, and Fees



Vanguard


USAA

  • Stocks and ETFs: $7 for the first 25 trades, $20 for subsequent trades for account with less than $50,000 invested in Vanguard products
  • $7 for account with $50,000–$500,000 invested in Vanguard products (Voyager Services)
  • $2 for account with $500,000–$1,000,000 invested in Vanguard products (Voyager Select Services)
  • Free for first 25 trades, $2 for subsequent trades for account with $1,000,000-$10,000,000 (Flagship Services)
  • Free for first 500 trades, $2 for subsequent trades for account with $10,000,000+ (Flagship Select Services)
  • Options: $20 + $1 per contract (Voyager: $7 + $1 per contract; Voyager Select and Flagship: $2 + $1 per contract)
  • Mutual funds: Vanguard mutual funds - free. All others - Standard: $35; Voyager and Voyager Select: $20; Flagship: $8
  • Certificates of deposit (CDs): Purchase: $5 per $1,000, Minimum: $50. Sale: $35 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
  • All Vanguard fees
  • Vanguard login, Vanguard promotions

  • Stocks and ETFs: $8.95
  • Stocks and ETFs broker assisted: $50
  • Options: $9 + $0.75 per contract
  • Mutual Funds: $45
  • All Listed Corporate Bonds: $25 + $3 per bond
  • U.S. Treasury Securities at Auction: $45
  • Investment products: stocks, options, mutual funds, bonds, ETFs
  • USAA Brokerage minimum deposit to open account: $0
  • All USAA Brokerage fees
  • USAA Brokerage promotions




Companies Pros



Vanguard


USAA

  • Low cost and good performance Vanguard mutual funds
  • Commission-free Vanguard ETFs
  • Free dollar-cost-averaging transactions for no-fee mutual funds; for transaction-fee mutual funds dollar-cost-averaging is $3 per transaction, with $100 minimum purchase
  • Free DRIP (dividend reinvestment plan)
  • Low commissions for clients with $500,000+ invested in Vanguard products

  • Very few fees comparing to some other brokerage firms
  • Excellent mobile app
  • No account maintenance, inactivity or hidden fees
  • Good banking services
  • No-fee IRA accounts




Companies Cons



Vanguard


USAA

  • High commissions for most active investors
  • Poorly designed, difficult to navigate website
  • If account is not signed up for electronic statements, $20 annual account service fee is charged for each Vanguard fund under $10,000 (waived for accounts over $50,000)
  • Annual IRA fees: $25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans (waived if account is paperless or has $10,000+), $20 for 529 plan
  • Basic trading tools
  • No advanced trading platform
  • No pre-market trading and short after-hours trading: 4:15 pm - 6:00 pm EST, instead of 4:00 pm - 8:00 pm EST
  • Vanguard does not list all their fees on their website - they ask to call them for information on the fees

  • Higher than average commissions
  • Additional $0.01 per share is charged for stocks priced under $1
  • Basic trading tools
  • Few educational resources
  • Limited research services




USAA vs Vanguard: Comparison Summary


USAA Investments charges higher commissions on buying and selling stocks and ETFs than Vanguard Brokerage: $8.95 per trade versus $7 per trade at the competitor. However, Vanguard gets extremely expensive for active investors: starting from 26-th trade in a year and onward the firm charges $20 per trade (this is the highest commission among discount brokers right now). Mutual fund transactions are $45 at USAA and $35 for most clients at Vanguard.

The time of mutual funds is slowly but surely coming to the end. They are being replaced by low-cost and easy to buy and sell Exchange Traded Funds (ETFs). Even though Vanguard created its own ETFs, there are similar, well-known ETFs available to everyone at every brokerage firm. We believe that the company will have hard time attracting new customers in this new environment.

USAA outshines Vanguard in banking services: the firm offers a wide selection of competitive banking products, such as free checking account, credit cards, and all kinds of insurance. Unlike most other online brokers, the company has very few fees and only one surcharge - on trades with over 1,000 shares.

Both online brokerage firms provide very basic trading tools that fell far behind the competition. Unlike most online brokers they do not offer advanced trading platform. The two brokers don't have online user communities, where members could learn from each other, share investment ideas and ask questions. They also don't provide virtual trading, that allows clients to practice various trading strategies without the risk of loosing money. If you are new to investing take a look at our Best Brokers For Beginners article.

In summary, we recommend Vanguard to "buy-and-hold" customers wanting to invest primarily in Vanguard's own family of mutual funds and ETFs. USAA brokerage is a good option for an IRA account, and to anyone who wants to do their investing and banking with one company. To everyone else we suggest researching Top Rated Discount Brokers before opening a brokerage account.



Updated on 4/21/2017.





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