Vanguard Review 2024: Pros, Cons and How It Compares - NerdWallet (2024)

Where Vanguard shines

Where Vanguard falls short

What Vanguard is best for

Vanguard at a glance

Full details about Vanguard

Is Vanguard right for you?

How we review brokers: our methodology

Where Vanguard shines

Large mutual fund selection: Vanguard has more than 3,500 no-transaction-fee mutual funds, and an expanded lineup of proprietary, low-cost, socially responsible mutual funds and ETFs.

Leader in low-cost funds: The company has a solid reputation for the well-below-average expense ratios on its index funds and exchange-traded funds. For long-term investors looking to pair a buy-and-hold strategy with the lowest-cost offerings, it's hard to beat the service and selection found with Vanguard.

Where Vanguard falls short

Trading platform: Vanguard’s trading platform is basic, and lacks the analytical and educational tools typically offered by brokers that support stock trading.

Investment minimums: Most Vanguard retirement funds and the Vanguard STAR Fund have investment minimums of $1,000, and other Vanguard funds carry minimums of $3,000. That initial minimum purchase amount of $1,000 to $3,000 will be too high for many beginner investors.

Vanguard is best for:

  • Long-term or retirement investors.

  • Those who prefer low-cost investments.

  • Index fund and ETF investors.

Vanguard at a glance

Account minimum

$0; however some fund minimums start at $1,000.

Stock trading costs


Options trades

$0 + $1 per contract.

Interest rate on uninvested cash


Account fees (annual, transfer, closing, inactivity)

No closing, inactivity or transfer fees.$20 annual account service fee for all brokerage accounts and IRAs. Waived for clients who sign up for statement e-delivery.

Number of no-transaction-fee mutual funds

More than 3,400 funds from outside providers and 191 Vanguard funds charge no transaction fees.

Tradable securities

• Stocks. • Bonds. • Mutual funds. • ETFs. • Options.

Trading platform

Basic trading platform.

Mobile app

Trade mutual funds, ETFs and stocks; monitor account activity and analyze performance; follow market news and research investments.

Research and data

Average quality but free.

Customer support options (includes how easy it is to find key details on the website)

Phone support Monday-Friday, 8 a.m.-8 p.m. Eastern; email support.

» Looking to switch brokers? View the best broker promotions right now

More details about Vanguard's ratings

Account minimum: 5 out of 5 stars

Vanguard's account minimum is $0, but keep in mind many mutual funds may require a minimum initial investment. Vanguard funds have minimums that start at $1,000.

Stock trading costs: 5 out of 5 stars

Following on the heels of the rest of the stock brokerage industry, Vanguard has eliminated all stock trading commissions.

Options trades: 2 out of 5 stars

Options trades are commission-free, but they still carry a contract charge, which is $1 — higher than many other brokerages. That said, account holders with $1 million to $5 million in Vanguard assets get 25 free option trades per year; customers with $5 million or more get 100 free trades per year.

» See our list of the best brokers for trading options

Account fees: 5 out of 5 stars

Vanguard charges no closing, transfer or inactivity fees. There is a $20 annual account service fee for all brokerage accounts and IRAs that is easily waived for clients who sign up for statement e-delivery.

Interest rate on uninvested cash: 5 out of 5 stars

The interest rate you'll get on uninvested cash in your account will vary based on your account settings, but the default settlement fund is Vanguard's federal money market fund, which was paying 5.27% as of August 31, 2023. This was among the highest of any broker we reviewed.

Number of no-transaction-fee mutual funds: 4 out of 5 stars

Vanguard pioneered low-cost funds — founder Jack Bogle actually invented the index fund — so if those are your game, you’re in excellent hands with this brokerage.

Vanguard offers more than 3,500 non-Vanguard funds and 191 Vanguard funds currently open to new investors.

Vanguard’s mutual funds and ETFs aren’t just low cost; they’re significantly less expensive than the industry average. Vanguard’s average expense ratio is 0.09%. According to an August 2023 report from investment research firm Morningstar, the average expense ratio across all mutual funds and ETFs was 0.37% in 2022.

What do you do when you're already low? Go lower. Admiral Shares are a class of Vanguard mutual funds that boast super low expense ratios — as in 29% lower than the company's standard fund share class — and used to be the broker's way of passing along savings to larger account holders. But in 2018, Vanguard lowered the minimum investment threshold for many of those index funds to $3,000 from $100,000.

Tradable securities available: 3 out of 5 stars

Vanguard allows investors to trade stocks, mutual funds, ETFs and options. Bond investors have a solid selection on Vanguard, including Treasurys, US government agency securities, municipal bonds, corporate bonds, CDs, preferred bonds and bond ETFs.

Overall, Vanguard has a good selection for retirement investors, but active traders may want more options such as forex and futures trading.

The platform also has a limited offering of fractional shares, which allow investors to start off on higher-priced equities with a low buy-in. Fractional shares are only available for Vanguard ETFs.

Trading platform: 2.5 out of 5 stars

Vanguard is designed for long-term retirement investors, rather than active traders, as evidenced by Vanguard's no-frills trading platform. You'll have to look elsewhere for bells and whistles such access to IPOs and over-the-counter trades.

Setting up an account can be a heavier lift on Vanguard than with some competing brokers. For instance, our attempts to fund an account with a transfer from our small credit union led to a dead end that could only be resolved by sending Vanguard a check — not ideal for new customers who want to start trading right away.

All that said, if you're investing on a years-long time horizon, a few days might not make that much of a difference.

Once you're in, you'll find a platform that's strong under the hood. Vanguard's execution quality is among the best in the business at 99.2%, and the company is among the rare brokers that don't accept payment for order flow. This means Vanguard doesn't receive compensation from market makers, who sometimes pay brokers to route investors' orders through them. The company touts this as their "client-first philosophy."

🤓Nerdy Tip

The average execution quality of all brokers we review was 97.4% as of Aug. 31, 2023. That means 97.4% of orders were executed at a price that was at or better than the National Best Bid and Offer. Executing at or above the NBBO means you may receive price improvement, or a better share price than you were originally quoted.

Mobile app: 3 out of 5 stars

Vanguard has apps available for iOS and Android, which allow users to trade mutual funds, ETFs and stocks, as well as monitor account activity and analyze performance.

Research and data: 3 out of 5 stars

Vanguard offers research from Argus and Vanguard's own bespoke team of analysts. It's a decent, free, offering — but it falls short of the more robust research programs put forward by top-tier competitors.

Customer support and educational tools: 3.5 out of 5 stars

Like other retirement-oriented brokers, Vanguard offers a wealth of retirement planning tools and resources on its website. Investors can learn about investment options and prioritizing their goals, predict when they'll be able to retire with high-quality calculators and tools, estimate their retirement expenses and weigh the benefits of converting a traditional IRA to a Roth.

If you'd rather skip learning and cede investment decisions to the experts, Vanguard’s robo-advisor service, Vanguard Digital Advisor, will manage your portfolio for you for an annual advisory fee of 0.15%. Robo-advisors are computer-based investment advisors who build and manage client investment portfolios.

Is Vanguard right for you?

Ask yourself this question: Are you part of Vanguard’s target audience of retirement investors with a relatively high account balance? If so, you’ll likely find no better home. You really can’t beat the company’s robust array of low-cost funds.

Investors who fall outside of that audience — those who can’t meet the fund minimums or want a powerful platform to regularly trade stocks — should look for a broker that better caters to those needs. (Need help figuring out what you want in a broker? Visit our guide to brokerage accounts.)

How do we review brokers?

NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgments on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.

We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).

For more details about the categories considered when rating brokers and our process, read our full methodology.

Vanguard Review 2024: Pros, Cons and How It Compares - NerdWallet (2024)


Vanguard Review 2024: Pros, Cons and How It Compares - NerdWallet? ›

Vanguard is the king of low-cost investing, making it ideal for buy-and-hold investors and retirement savers. But beginner investors and active traders will find the broker falls short despite its $0 stock trading commission, due to the lack of a strong trading platform and accessible educational resources.

Why do people prefer Vanguard over Fidelity? ›

While both institutions offer robo-advisors, Vanguard's Personal Advisor Services, which is available to clients who can meet a $50,000 account minimum, offers a little more hands-on investment guidance and assistance with portfolio construction. Vanguard also has slightly lower expense ratios on its index funds.

What are the disadvantages of a Vanguard brokerage account? ›

  • Higher options contract fee than other discount brokerages (Vanguard charges $1 per options contract)
  • No separate trading platforms for advanced traders; no fractional shares.
  • No cryptocurrencies.
Mar 21, 2024

Is Fidelity or Vanguard better for retirees? ›

While Fidelity wins out overall, Vanguard is the best option for retirement savers. Its platform offers tools and education focused specifically on retirement planning.

Why is Charles Schwab better than Vanguard? ›

Charles Schwab offers a generally more robust and well-designed user experience than Vanguard. As full-service brokerages, both platforms offer many ways to contact the firm if you have questions or need support. You can call, email, or chat with either Vanguard or Schwab.

Who is better than Vanguard? ›

Fidelity is your answer. The tension between these two starts for those investors who are looking to compare mutual funds, fees, account minimums and investment offerings.

Why are investors pulling money from Vanguard? ›

When the market cratered, investors withdrew $16.4 billion from Vanguard's index mutual funds. What accounts for remaining index mutual fund outflows? Johnson says it could be clients pulling out money because they're retiring, or because they're negatively affected by the pandemic.

How safe is my money with Vanguard? ›

Insurance coverage

Money market funds and other securities held in the Vanguard Brokerage Account are eligible for SIPC coverage. Securities in your brokerage account are protected up to $500,000. To learn more, visit the SIPC's website. Up to $250,000 by FDIC insurance.

Should I use Vanguard or Fidelity? ›

Vanguard and Fidelity have a lot in common, but they also have some key differences. In general, Vanguard is focused on long-term, buy-and-hold investing. By contrast, Fidelity caters to investors who want a more hands-on experience.

Should I put my money into Vanguard? ›

Vanguard is the king of low-cost investing, making it ideal for buy-and-hold investors and retirement savers. But beginner investors and active traders will find the broker falls short despite its $0 stock trading commission, due to the lack of a strong trading platform and accessible educational resources.

What is the downside to Fidelity? ›

In most situations, you will find what you need at Fidelity. There are a few downsides. Fidelity does not offer cryptocurrency investing. The company is also missing some features found on other investment platforms, like futures trading and paper trading, where you can practice trading.

Should I have both Vanguard and Fidelity? ›

The answer depends on you and your investment goals. There's no reason you can't have accounts with both Fidelity and Vanguard (among others). You'll have two (or more) sets of statements to review, multiple phone numbers to remember, several websites to navigate and hundreds of funds to understand and monitor.

Is Charles Schwab or Vanguard better? ›

Is Charles Schwab better than Vanguard? After testing 18 of the best online brokers, our analysis finds that Charles Schwab (96.6%) is better than Vanguard (80.3%).

What are the disadvantages of Charles Schwab? ›

Cons Explained
  • Higher margin rates: Schwab has higher margin rates than some of its competitors. ...
  • No fractional-share ETF trades: Schwab does not offer fractional-share trading for ETFs.

Who is bigger than Vanguard? ›

Vanguard is the world's second-largest investment company or brokerage firm, offering a range of active and passive options, as well as a competitive fee structure and other attractive selling points. BlackRock, Inc. is the world's largest investment firm and asset manager.

Who owns Vanguard? ›

Vanguard set out in 1975 under a radical ownership structure that remains unique in the asset management industry. Our company is owned by its member funds, which in turn are owned by fund shareholders. With no outside owners to satisfy, we focus squarely on meeting the investment needs of our clients.

Is it better to invest in Vanguard or Fidelity? ›

Bottom Line. Overall, Vanguard and Fidelity are both great choices. They offer a wide range of investment options, low costs, and hands-off or active management depending on your preference. When it comes to index funds, Vanguard is hard to beat, with hundreds of low-cost options.

Why do people choose Vanguard? ›

Vanguard is owned by its funds, which in turn, are owned by their shareholders. With no other parties to answer to and therefore no conflicting loyalties, Vanguard makes decisions, including the decision to keep investing costs as low as possible, with clients' interests in mind.

Why do people love Vanguard? ›

Leader in low-cost funds: The company has a solid reputation for the well-below-average expense ratios on its index funds and exchange-traded funds. For long-term investors looking to pair a buy-and-hold strategy with the lowest-cost offerings, it's hard to beat the service and selection found with Vanguard.

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