Vanguard vs. Fidelity: Which Should You Choose? (2024)

Fidelity offers a more robust platform

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Jean Folger

Vanguard vs. Fidelity: Which Should You Choose? (1)

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Jean Folger has 15+ years of experience as a financial writer covering real estate, investing, active trading, the economy, and retirement planning. She is the co-founder of PowerZone Trading, a company that has provided programming, consulting, and strategy development services to active traders and investors since 2004.

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Updated January 22, 2024

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Michael J Boyle

Vanguard vs. Fidelity: Which Should You Choose? (2)

Reviewed byMichael J Boyle

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Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.

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Yarilet Perez

Vanguard vs. Fidelity: Which Should You Choose? (3)

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Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

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Fidelity and Vanguard are two of the largest investment companies in the world. Fidelity boasts over 43 million individual investors and $1 1.5 trillion in assets under administration (AUA). Meanwhile, Vanguard has more than 30 million investors and $8.5 trillion in assets under management. Both brokers have solid industry reputations and offer a large selection of low-cost mutual funds, ETFs, advice, and related services.

Founded in 1946, Fidelity offers a robust trading platform, excellent research and asset screeners, and terrific trade executions. Vanguard was introduced in 1975 and offers an impressive lineup of low-cost mutual funds and exchange-traded funds (ETFs) aimed at buy-and-hold investors. While these companies have a few similarities, we'll compare Vanguard vs. Fidelity to help you determine which broker might be a better fit for your investing needs.

New and Notable

On October 25, 2022, Vanguard announced that it is broadening its fractional share trading offering, allowing retail clients to buy and sell Vanguard ETFs in dollars through a new trade path.

  • Account Minimum: $0
  • Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade

Read full review

Fidelity: Pros & Cons

Pros

Cons

  • Cryptocurrency trading, futures and options on futures not supported

  • Quotes delayed by 15 minutes

  • Account Minimum: $0
  • Fees: $0/stock and ETF trade, $0 plus $1 per contract for options

Read full review

Vanguard: Pros & Cons

Pros

  • Low cost ETFS and mutual funds

  • Good net price improvement

  • Updated, user-friendly website

Cons

  • Outdated mobile app

  • Does not support futures, options on futures, or cryptocurrency trading

Vanguard vs. Fidelity: Usability

You can open and fund a Vanguard account online, but there is a several-day delay before you can log in and start investing. It's easier (and faster) to get started at Fidelity. With either broker, you need to sign more documents—and wait a bit longer for your application to be approved—if you want to trade options or have access to margin.

Vanguard's website has been updated and is now more user-friendly and modern-looking. However, there's still work to be done to make the website easier to navigate, and you can't get very far unless you log into your account. Fidelity's website offers far more tools and resources to support a broader range of investor types.

Overall, we found Vanguard is an excellent choice for long-term and retirement investors—especially those who want access to professional advice and some of the lowest-cost funds in the industry. At the same time, Fidelity is better for casual investors and traders who wish to access more tools, charting, and technical analysis.

Vanguard vs. Fidelity: Trade Experience

Desktop Trade Experience

Vanguard's platform is geared toward buy-and-hold investors, not active traders. While the platform gets the job done (i.e., you can enter orders), there aren't any bells and whistles. The order entry process is clunky and not particularly intuitive, and there's no real-time data until you open a trade ticket. Overall, the trading platform is adequate for passive investors, but it falls predictably short for traders and investors who want a responsive and customizable experience. Of course, keep in mind that Vanguard is, by design, not intended for frequent traders or short-term investors, so this should not be viewed as a shortcoming for the company.

Fidelity offers a better trading experience for every type of investor. Buy-and-hold investors should find Fidelity's web-based platform more than adequate. However, quotes are delayed by 15 minutes unless you sign up for real-time quotes. More active and technical traders will appreciate Active Trader Pro's charts, technical indicators, screeners, advanced order types, and more.

In addition, recent dashboard enhancements, new thematic baskets, custom indexing, and robust rebalancing features make Fidelity a solid choice for more sophisticated investors. Overall, when compared to Vanguard, Fidelity is the clear winner in terms of trading experience.

Mobile Experience

Vanguard's mobile app is a bit outdated and light in terms of features. There is no charting, and the quotes are delayed until you open an order ticket. Still, you can monitor your positions, analyze your portfolio, read the news, and place basic orders—albeit for limited asset classes—as a buy-and-hold investor.

Fidelity's mobile app is easy to navigate, and you can manage orders, check pending transactions, and place trades. Where the app falls short is in its fundamental research and charting, which are very limited. Mobile watchlists sync with desktop and web applications, and you can use most of the same order types on mobile as on the web or desktop platforms.

While both apps are well-rated on the App Store, Fidelity has far more reviews. Vanguard has 4.7 stars from about 170,000 reviews, while Fidelity has a 4.8-star rating from some 1.9 million reviews. Overall, we found that Fidelity's app offers more functionality and will be valuable to a greater range of investors.

Vanguard vs. Fidelity: Range of Offerings

Compared to some large brokers, Vanguard and Fidelity have a limited range of offerings. Both brokers offer equities, bonds, options, ETFs, and thousands of no-load, no-fee mutual funds. However, neither supports futures, options on futures, or cryptocurrency trading, and only Fidelity offers Forex, precious metals, OTCBB, and fractional shares for purchase.

Vanguard vs. Fidelity: Order Types

Predictably, Vanguard supports only the order types that buy-and-hold investors typically use, including market, limit, and stop-limit orders. You can't stage orders for later entry (you can with Fidelity), but both brokers let you select specific tax lots before placing orders. Fidelity's web platform and Active Trader Pro support a better variety of order types, including conditional orders such as one-cancels-the-other (OCO) and one-triggers-the-other (OTO).

Vanguard vs. Fidelity: Trading Technology

Vanguard does not use smart order routing technology, and customers can't route their own orders. Still, the broker reports an average net price improvement of $2.31 per 100-share lot for eligible marketable orders. We did not find any ready details about Vanguard's execution speed, which is not surprising considering the broker's target customer is playing the long game. Although its approach to routing is basic compared to many other brokers, it scores points for not accepting payment for order flow.

Meanwhile, Fidelity's smart order routing technology seeks the best price available and can access all types of market venues, including dark pools, exchanges, and market makers. The company reports a net price improvement of $19.24 per 1000-share equity order and an average execution speed of 0.05 seconds. Like Vanguard, it does not accept payment for order flow for stocks or ETFs.

Overall, Fidelity wins in the trading technology department due to its smart order routing technology, superior price improvement, and transparent execution speed statistics.

Vanguard vs. Fidelity: Costs

Vanguard and Fidelity charge $0 commissions for online equity, options, and ETF trades for U.S.-based customers. Fidelity has a $0.65 per contract option fee; it's $1 at Vanguard.

Fidelity will set you back more for broker-assisted stock trades ($32.95 versus Vanguard's $25. Fidelity charges $49.95 for mutual fund trades that fall outside the no-transaction-fee family. At Vanguard, you'll pay $0 to $20 per trade, depending on your account balance. The margin rates at both brokers are close, with Vanguard charging 10.75% for $10,000 and Fidelity charging 10.575% for the same. Overall, you might save money at Fidelity if you trade options, but Vanguard will be cheaper if mutual funds are your focus.

Vanguard vs. Fidelity: Account and Research Amenities

Vanguard offers basic screeners for stocks, ETFs, and mutual funds. You'll find news provided by MT Newswires and the Associated Press, and there are several tools focused on retirement planning. Charting is limited, and no technical analysis is available—again, not surprising for a buy-and-hold-centric broker.

Fidelity comes out ahead in this category. Its research offerings on the website include flexible screeners for stocks, ETFs, mutual funds, and fixed income, as well as a good selection of tools, calculators, and news sources. Its web-based and Active Trader Pro platforms offer customizable charting with technical indicators, drawing tools, and historical data. Another plus: Fidelity offers portfolio margining.

Vanguard vs. Fidelity: Portfolio Analysis

Vanguard and Fidelity both provide access to real-time buying power and margin information, internal rate of return, and unrealized and realized gains. Both offer tax reports, and you can combine holdings from outside your account to get an overall financial picture. Something missing from both brokers is the option to calculate the tax impact of future trades. Overall, the portfolio analysis offerings are too similar to pick a clear winner.

Vanguard vs. Fidelity: Education

The focus of Vanguard's educational content is to help you set and reach your financial goals. Much of the content is in the form of articles. Still, you'll also find commentary and research papers, videos, and webcasts on investment products, retirement, industry news, financial planning, and the economy.

Fidelity's online Learning Center has articles, videos, webinars, and infographics covering various investing topics. There are regular webinars and online coaching sessions for more advanced topics, and learning programs aimed at beginning investors on the app. Overall, Fidelity takes the lead here by offering content that appeals to a larger investor population.

Vanguard vs. Fidelity: Customer Service

Vanguard offers phone support from 8 a.m. to 8 p.m. (Eastern) Monday through Friday. Live chat isn't supported, but you can send a secure message via the website. Fidelity has a 24/7 phone line, an online chat feature (limited hours), and a secure email portal. Overall, Fidelity's customer service is more flexible, but you can count on reliable help from either broker.

Vanguard vs. Fidelity: Security

The security at Vanguard and Fidelity is up to industry standards. You can log into either broker's app with your fingerprint, both brokers allow you to activate voice recognition technology for calls, and both brokers protect against account losses due to unauthorized or fraudulent activity.

Funds in brokerage accounts at both brokers are covered by Securities Investor Protection Corporation (SIPC) insurance which provides up to $500,000 coverage for securities with a $250,000 limit on cash. Think of it as being like the FDIC for brokers. Both Fidelity and Vanguard carry insurance that protects clients beyond the limits of the SIPC coverage. Vanguard does not disclose the details of its coverage. Fidelity's excess SIPC insurance policy has a per-customer limit of $1.9 million on uninvested cash and a total aggregate limit of $1 billion. Overall, investors can be confident in the security standards of either broker.

Vanguard vs. Fidelity: Account Types

Fidelity and Vanguard both offer the full range of commonly used account types. This includes:

  • Taxable brokerage accounts
  • Traditional, Roth, inherited, SIMPLE, and simplified employee pension (SEP) individual retirement accounts (IRAs)
  • Corporate accounts
  • Custodial accounts
  • 529 college savings accounts
  • Trusts

Although both brokers offer all the standard accounts and more, Fidelity has some additional options like health savings accounts (HSA) and a new offering called the Fidelity Youth Account. This will, of course, only matter if you intend to make use of those particular account types.

Final Verdict

In our 2022 Best Online Brokers reviews, Fidelity earned higher scores than Vanguard in almost every category we ranked. To be fair, it isn't easy to compare two brokers that have distinct business models and different target customers. Overall, however, Fidelity is a better fit for investors and traders who want a more high-tech experience, technical analysis tools, advanced charting, and access to a broader range of offerings. In fact, Fidelity is our overall pick for the best online broker in 2022, so it is very hard to beat.

All that said, Vanguard still offers some of the lowest-cost funds in the industry and will appeal to buy-and-hold investors, retirement savers, and investors who want access to professional advice.

Frequently Asked Questions

Which is better for retirement: Fidelity or Vanguard?

While Fidelity wins out overall, Vanguard is the best option for retirement savers. Its platform offers tools and education focused specifically on retirement planning. There are also five types of IRAs offered: Traditional, Roth, inherited, SIMPLE, and simplified employee pension (SEP). Additionally, Vanguard has incredibly low-cost funds and can provide access to professional advice.

What brokerage do the wealthy use?

Wealthy individuals use many different brokerage firms, some opting for Fidelity or Vanguard, while others use Charles Schwab or TD Ameritrade. Their choice of firm can vary depending on their individual investment goals.

What are the cons of Vanguard?

Vanguard is less user-friendly than Fidelity. The company recently updated its website but its mobile app is still outdated and lacks the same features as Vanguard's online platform. Additionally, like Fidelity, Vanguard does not support cryptocurrency trading, futures, or options on futures.

What is the average retirement balance at Fidelity?

Fidelity's data on average 401(k) balance varies by age. Those 25-34 years old have the lowest average balance, at $37,211. The average balance increases from there, at $97,020 for those 35-44 and $179,200 for those 45-54. Fidelity's 401(k) holders 55-64 years old have the highest average balance, at $256,244.


Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please readCharacteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

There is an Options Regulatory Fee that applies to both option buy and sell transactions. The fee is subject to change. SeeFidelity.com/commissionsfor details.

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. This year, we revamped the review process by conducting an extensive survey of customers that are actively looking to start trading and investing with an online broker. We then combined this invaluable information with our subject matter expertise to develop the framework for a quantitative ratings model that is at the core of how we compiled our list of the best online broker and trading platform companies.

This model weighs key factors like trading technology, range of offerings, mobile app usability, research amenities, educational content, portfolio analysis features, customer support, costs, account amenities, and overall trading experience according to their importance. Our team of researchers gathered 2425 data points and weighted 66 criteria based on data collected during extensive research for each of the 25 companies we reviewed.

Many of the brokers we reviewed also gave us live demonstrations of their platforms and services, either at their New York City offices or via video conferencing methods. Live brokerage accounts were also obtained for most of the platforms we reviewed, which our team of expert writers and editors used to perform hands-on testing in order to lend their qualitative point of view.

Read ourfull Methodologyfor reviewing online brokers.

Vanguard vs. Fidelity: Which Should You Choose? (2024)

FAQs

Vanguard vs. Fidelity: Which Should You Choose? ›

If you want to actively trade within your accounts, Fidelity might be the better option. However, if you want to focus more on index investing, or you want to use a robo-advisor, Vanguard has a slight edge.

Should I choose Vanguard or Fidelity? ›

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

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.

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 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.

Why choose Fidelity over Vanguard? ›

(Although Vanguard offers some actively managed funds, too.) Fidelity has a wider range of investment funds if you want active management, and a more robust array of services if you want to buy and sell individual stocks.

What happens to my investments if Fidelity goes bust? ›

The Securities Investor Protection Corporation (SIPC) is a nonprofit organization that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt and assets are missing. The SIPC will cover up to $500,000 in securities, including a $250,000 limit for cash held in a brokerage account.

Is it safe to keep all your money in Fidelity? ›

Several types of safeguards exist to protect your account and assets. All Fidelity brokerage accounts are automatically protected by the SIPC.

Why Fidelity is the best? ›

Fidelity owns our Best Broker for Low Costs designation, with transparent fees and no fees for a wide range of products and services. Online trading for stocks and ETFs is commission-free. Investors can trade these two coins through a crypto account with as little as $1.

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.

Can I switch from Fidelity to Vanguard? ›

Transferring cash from your Fidelity account to Vanguard involves simple electronic transactions, allowing for quick and efficient movement of funds between the two financial institutions. When initiating a cash transfer, you can typically select an electronic transfer option on your Fidelity account's online platform.

Who should use Vanguard? ›

Vanguard is best for:

Long-term or retirement investors. Those who prefer low-cost investments. Index fund and ETF investors.

Is Vanguard good for beginners? ›

"Beginner investors should consider Vanguard funds for their low costs, diversification across asset classes and regions, simplicity, and robust investor education resources," says Sean August, CEO of August Wealth Management Group.

Why is Vanguard so cheap? ›

Vanguard funds offer an enviable cost advantage

You don't get a bill explaining how much of your savings went toward paying fund expenses, because those costs are paid directly out of each fund's returns. Vanguard was built differently to make sure we stay focused on keeping your costs low.

How do I avoid Vanguard fees? ›

If you're the primary account owner, you can eliminate the fee on brokerage accounts by signing up for e-delivery of statements and the annual privacy policy notice; confirmations; reports, prospectuses, and proxy materials; and notices, amendments, and other important account updates.

Does it cost more to buy Vanguard through Fidelity? ›

Hey, u/Buy-and-hold4ever. Thank you for bringing your account over and choosing to invest with us. We do not charge commissions for online domestic stock or Exchange Traded Funds (ETF) trades, including Vanguard ETFs. We also don't charge any fees just for holding non-Fidelity securities in your account.

Is it better to invest with Vanguard directly? ›

If you buy directly through Vanguard, you may benefit from lower fees, better customer service, and additional product research. Buying a Vanguard fund through a broker may involve commissions, loads, or other charges that are imposed by the broker, and not Vanguard directly—although this is not always the case.

Is Vanguard good for beginner investors? ›

Today, beginners can construct a comprehensive portfolio covering all three of these asset classes through Vanguard's fund lineup, which includes 352 mutual funds and exchange-traded funds, or ETFs. While some options are institutional-only, the majority are accessible to retail investors.

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