Vanguard Pricing and Minimum Deposit
| Investments | Commissions |
|---|
| Stocks and ETFs | $0 |
| Options | $1 per contract |
| Mutual funds | Vanguard mutual funds - free. All others: $0 or $20 |
| Certificates of deposit (CDs) | Purchase - $5 per $1,000, minimum is $50. Sale - $35 per transaction |
| Commercial paper | $50 per transaction; minimum purchase is $100,000 |
| U.S. Treasury | commission-free |
| Mortgage-backed securities | $50 per transaction; GNMA minimum purchase is $25,000 |
| Investments |
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 |
| Fees | Vanguard fees |
Overview of Vanguard
While in some ways Vanguard is still an old-school brokerage firm, the company has launched a new $0 commission schedule that attempts to rival cutting-edge firms. But does it have enough to outdo them? Let’s have a look.
Vanguard Pros
Commission-free trading. Vanguard has finally succumbed to the brokerage price war. It now offers zero trade fees on most (but not all) securities transactions.
An enticing portfolio management service. Vanguard can actually do better than many modern brokerage firms, at least for large accounts.
Vanguard famously offers its own lineup of funds. And they always have no load and no transaction fee when traded on Vanguard’s software.
Vanguard Cons
Customer service isn’t quite up to par. Vanguard traders don’t get quite the customer support that is available at rival firms.
Trading tools are rudimentary. Vanguard emphasizes buy-and-hold investing, and it really shows in its software.
Banking tools are no longer offered. Vanguard customers have been left out in the cold here.
Investment Vehicles
Vanguard doesn’t emphasize short-term trading or esoteric products. It specializes in fund trading; so yes, mutual and exchange-traded funds are available—from both Vanguard and other fund families. Closed-end funds can be traded, too.
Beyond funds, there are also stocks, option contracts, and fixed-income securities. The latter category includes unit investment trusts, commercial paper, CD’s, and mortgage-backed securities.
Unfortunately, many other investment vehicles are missing at Vanguard. These include precious metals, forex, contracts for difference, futures, options on futures, warrants, global stocks, and cryptocurrencies.
Fees and Commissions
And what does the broker charge to trade the financial instruments it offers? Not much, as it turns out.
Stock, ETF, and option trades that are placed online are now $0 for all accounts. Accounts with less than $1 million invested in Vanguard funds pay a $1 per-contract charge on option trades.
Flagship Services® accounts (defined as Vanguard assets between $1 million and $5 million) get 25 option trades per year with zero per-contract charges; and Flagship Select Services® accounts (above $5 million) get 100.
Trades placed over the phone for some securities may have surcharges, depending on account size. Vanguard does not charge any additional fees for trading Vanguard mutual funds and ETF’s over the phone.
Trading a non-Vanguard mutual fund with a transaction fee will cost anywhere from $0 to $20, depending on account size. Selling a non-Vanguard no-transaction-fee fund in less than 60 calendar days after purchase results in a $50 surcharge.
New issues of certificates of deposits, agency debt, and corporate bonds are commission-free; although Vanguard may act as principal. Secondary trades are $1 per bond, with a $250 max. Treasuries are always commission-free.
Margin rates currently are 9.5% to 13.25%.
Customer Service
Vanguard opens for business at 8:00 am, EST, and closes at 8:00 pm, two hours earlier than it did previously. These times are for the weekday only. There are no hours on Saturday or Sunday.
During our study, we didn’t find any type of chat service on the Vanguard website—either AI or human—and this omission will subtract a star. On a positive note, there is internal messaging. We found it easy to use, and a very useful feature is the ability to add an attachment to a message.
Vanguard does not operate any brick-and-mortar locations, another failure. Although there is a number for customers outside the United States, the broker does not offer foreign language support.
Website
During our assessment, we found a simple website at Vanguard.com. There is no trade bar, and just forget about a browser platform. Vanguard customers submit orders using basic web pages.
The broker’s order form provides market, limit, stop, and stop limit order types. There are no trailing, contingent, OCO, or other advanced order types. There are only two duration choices: day and good for 60 days.
Although the order ticket is obviously elementary, there are some beneficial features on the trade ticket. A link is displayed that shows how to place an order; and another one describes the different order types. A detailed quote is shown for the entered ticker symbol, and the data can be refreshed.
Charting on Vanguard’s site is once again rudimentary. A graph cannot be displayed the width of the monitor. There are only a handful of technical studies; although we did find 4 graph styles and 3 company events.
Mobile Trading
Vanguard customers can bypass the website and go straight to the mobile app if they wish. It functions on iPhones, iPads, Android devices, and Kindle. Face ID and Touch ID are possibilities on an iPhone.
Once inside, we found several nice features, including mobile check deposit, account alerts, a watchlist (which is separate from the website’s watchlist), account documents in pdf format, and cost basis information.
Although mutual funds can be traded on the platform, only Vanguard funds are eligible, which seems kind of shoddy to us. Even worse, there is no charting at all on the software. A stock can be added to a watchlist, and limited trade data is displayed. That’s about it.
The situation is the same for non-Vanguard ETF’s. Vanguard ETF’s have more information, such as portfolio composition and performance history.
Perhaps the best part of Vanguard’s mobile app is account information. We found transaction history, messages, recent transactions, and balance history. There is also market news and commentary.
Other Trading Tools
Vanguard does not have a desktop platform. It also doesn’t provide an app for any smartwatch. Furthermore, there is no skill for Amazon devices; and iMessage doesn’t exist for iPhone users. And don’t even think about asking for an app for Apple TV.
Mutual Funds
Vanguard’s site has an effective mutual fund screener that is able to scan for investments available through the broker-dealer. Search criteria include beta, R-squared, average maturity (for bond funds), turnover ratio, minimum investment amount, and load status. During our testing, we were not able to get load status to work.
Vanguard’s screener returned 6,435 funds during our research. More than 3,400 of these are no-transaction-fee products. Results can easily be sorted by many criteria, such as fund category and inception date. An “Invest Now” link is shown in the results, which bypasses the fund’s profile page and goes straight to the order ticket.
Profiles on the Vanguard site show average annual performance, fund documents such as the prospectus and annual report, portfolio holdings, and fees and minimums.
Exchange Traded Funds
Vanguard customers can trade Vanguard and non-Vanguard ETF’s. For reasons we’ve already seen, the broker obviously gives preference to the trading of its own lineup.
On the website, non-Vanguard funds have slightly different profiles; and the amount of information presented is slightly less compared to Vanguard funds. For QQQ, the Invesco Nasdaq fund, we found information on price performance, zero analyst ratings, and news articles from MT Newswires. For VDC, the Vanguard Consumer Staples fund, we found intraday indicative value (IIV), risk-reward potential, a hypothetical growth of $10,000, portfolio composition, and distribution history.
The broker’s ETF screener is able to look for stock, bond, and balanced funds. Expense ratio and fund category can also be selected. Adding additional criteria switches the screener to mutual fund/ETF mode, which defeats the purpose of having an ETF-only screener.
As with mutual funds, there is a trade link in the search results. A drop-down menu makes changing sortable criteria quick and easy. Option chains can be displayed for funds that have open interest. A prospectus or annual report can be downloaded, and a right-hand menu makes setting up alerts for a fund a straightforward procedure.
Account Types
Vanguard offers a large selection of account types, although some of them come with fees that other brokerage firms don’t charge. Individual, joint, and trust accounts can be opened. Cash and margin options are available.
For retirement, Vanguard offers Roth, traditional, SEP, and SIMPLE plans. Variable annuities and solo 401(k)’s are also available. Education savers can open UGMA/UTMA accounts and 529 plans (sponsored by the State of Nevada).
A regular brokerage account does have a $20 yearly fee, although it can be avoided by signing up for e-statements. SIMPLE IRA’s are charged $25 for each Vanguard fund it holds. The fee can be eliminated in certain circumstances.
The SEP IRA charges $20 for every Vanguard fund with a balance below $10,000; and this too can be circumvented in some situations. The broker’s individual 401(k) also has fund fees.
Missing at Vanguard are inherited IRA’s, custodial accounts, investment club accounts, Health Savings Accounts, ABLE accounts, estate accounts, and the Coverdell Education Savings Account.
Portfolio Management
Investors at Vanguard who don’t trust their own trading decisions can turn the reins over to professional
money managers. The brokerage house charges just 0.30% on the most expensive tier. There is a $50,000
investment minimum, however. The management fee goes down with higher balances, reaching an extremely low
0.05% at $25 million. You can compare these rates to what the best priced
financial advisors in your area charge.
Managed account customers can reach out to an investment advisor by phone, chat, or video chat.
The first weakness Vanguard has in this category is no branch locations. The second weakness is the
lack of a robo service; and the third is the high minimum.
Banking Features
The broker’s cash management account, VanguardAdvantage, has been retired. There are no longer any banking tools available to account holders, and we of course view this as a considerable flaw.
Vanguard does have good rates on some money market mutual funds; but without banking tools, there is no way to use the funds for everyday cash management needs.
Security Research
Thankfully, Vanguard has decided to keep its investment education tools. These include three screeners that can look for fixed-income products, stocks, and funds. There are no derivative tools, however, other than chains for calls and puts.
Stock profiles have an unremarkable amount of details. Price performance is shown along with trade details like average volume and 52-week high and low prices. Analysts’ trade recommendations are shown (we found 29 for Adobe). Financial statements are presented in both table and bar chart formats. Vanguard provides pdf reports from just two analysts.
As for general investing education, the Vanguard site provides articles on a wide variety of issues. Examples include taxation, estate planning, trading CD’s, and asset allocation. The broker has a blog and has posted many videos on its YouTube channel.
Other Services
Vanguard offers a free DRIP program so that investors can roll distributions back into the securities that pay them. The broker also offers automatic mutual fund investing; but only into Vanguard funds, which at this point seems to be a recurring problem with this broker.
Recommendations
Retirement Savers and Long-Term Investors: Vanguard is an excellent choice. Firstrade,
however, has much more no-commission mutual funds than Vanguard.
Small Accounts: With its new
pricing schedule, Vanguard continues to favor large accounts over small accounts in some areas. We would
suggest Chase, where large and small accounts pay the same fees, which are usually $0.
Individual Retirement Accounts: Unlike Vanguard, TD Ameritrade has no IRA fees of any kind.
Beginners: Although we do like Vanguard’s educational tools, they are bit difficult to find on its rather undeveloped site. We pick TD Ameritrade.
Mutual Fund Investors: Although Vanguard helped to popularize mutual funds, today it largely underperforms other choices in the marketplace. TD Ameritrade customers, for example, get almost twice as many funds to choose from (13,000+).
Active ETF and Stock Trading: This one
is easy. Vanguard has no decent software. Interactive Brokers, TD Ameritrade, and E*Trade have good desktop platforms that frequent traders will want to use.
Vanguard Review Summary
Vanguard finally updated its commission schedule, one of the last brokers in the United States to do so.
Despite this surprising change, the company still underperforms in many important categories.
Vanguard Promotion
Company does not have a promotion.
Open Vanguard Account
Vanguard Questions and Answers
What investments can clients make through Vanguard?
Vanguard customers can trade the following asset types: stocks, options, mutual funds, bonds, CDs, foreign securities, insurance, commercial paper, and ETFs.
How much are Vanguard's fees?
A list of all the fees Vanguard brokerage is charging is under this link.
What interest does Vanguard pay on cash not in stocks?
Lear more about Vanguard sweep program.
What are Vanguard margin interest rates?
Current Vanguard margin interest rates could be found here.
What is Vanguard account minimum?
Vanguard does not have minimum requirements for brokerage accounts.
What minimum deposit is required to open a Vanguard account?
Vanguard does not have a minimum deposit requirement to open a taxable or an IRA account. However, most Vanguard mutual funds have a minimum investment of $3,000.
Who is Vanguard's clearing company?
Vanguard is self clearing.
How to close Vanguard account?
You could learn how to close or transfer your Vanguard account under this link.
Vanguard Margin Rates
|
Debit Balance
|
Margin Interest Rates
|
|
under $19,999
|
12.75%
|
|
$20,000 – $49,999
|
12.25%
|
|
$50,000 – $99,999
|
11.75%
|
|
$100,000–$249,999
|
11.25%
|
|
$250,000–$499,999
|
10.75%
|
|
$500,000–$999,999
|
9.50%
|
|
above $1,000,000
|
call
|
Vanguard IRA Fees
| Fee |
Amount |
| Vanguard IRA setup fee |
$0 |
| Vanguard annual IRA fee |
$25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans, $20 for 529 plan |
| Vanguard IRA termination fee |
$0 |
| Vanguard account maintenance fee |
$0 |
| Vanguard account inactivity fee |
$0 |
| Vanguard outbound full account transfer (ACAT) fee |
$0 |
| Vanguard outbound partial account transfer fee |
$0 |
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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