Vanguard vs. Fidelity vs. Charles Schwab

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Charles Schwab, Vanguard, and Fidelity Investments are three of the most popular brokerages. They provide their clients with excellent resources, they're secure, and they have customized resources. 

But how do you know which brokerage to choose? All three are excellent choices but they are different enough that one may be a better fit for you.

Learn more about Vanguard, Fidelity, and Charles Schwab and see which one has everything you're looking for in a brokerage firm.

Highlights ReviewVanguardCharles Schwab
Rating9/109/109/10
Min. Investment$0$0$0
Stock Trades$0/trade$0/trade$0/trade
Options Trades$0.65/contract$1/ contract$0.65/contract
Crypto Trades
Mutual Funds
Virtual Trading

About Vanguard

Perhaps one of the most unique aspects of Vanguard is that it's not necessarily a for-profit company. It's owned by the funds managed by the company. In other words, Vanguard is owned by its customers. 

Vanguard has over 200 mutual funds and 80 ETFs with low-cost fees and expense ratios. You can also invest in thousands of non-Vanguard funds and ETFs through the platform. 

Features

Vanguard specializes in offering low-cost mutual funds but they offer a number of other assets including:

  • Bonds
  • ETFs
  • Stocks
  • CDs

Vanguard shines in their mutual and index funds, and they stick to those for the most part. They offer a lot of passive investing options, including Vanguard Digital Advisor and Personal Advisor Services.

And while Vanguard offers a lot of investment opportunities but it does not offer forex and commodities trading. 

About Fidelity

Fidelity offers some of the best rates on the market, with 0% commissions for U.S. stock, ETF, and options trades and no expense ratio on Fidelity mutual funds. Fidelity has active trading options as well as managed accounts, including a robo advisor service called Fidelity Go. They make investing accessible by providing many educational materials, from podcasts to in-depth seminars.

Besides investing, Fidelity also offers cash management services.  It’s a great option for beginning investors who want access to a variety of investing options and educational services. 

Features

Fidelity offers a number of features including:

  • Forex Trading
  • Fractional Shares
  • Cash Management
  • ETFs 
  • Options
  • Bonds

You can open a variety of different accounts, including health insurance savings accounts and retirement plans.

About Charles Schwab

Charles Schwab is a long-established broker and has helped pioneer affordable equity investing. If you're looking for the brokerage with the most experience, Charles Schwab should be at the top of your list.

Charles Schwab has branched out and includes more than just classic index and mutual funds. They offer a lot more in the way of investment opportunities and advising, including a robo advisory service. 

Features

All of the features we've mentioned for Vanguard and Fidelity are available here. But Charles Schwab has even more to offer. In addition to assets like mutual funds and forex, Charles Schwab also offers futures and commodities.

This makes Charles Schwab one of the few discount brokerages with futures trading opportunities. And while Fidelity is praised for its incredible educational resources, Schwab goes about and beyond with its research capabilities. Additionally, Charles Schwab offers robust banking services, including savings, checking, and credit cards. 

How Are They the Same?

There's a lot of overlap between Vanguard, Fidelity and Charles Schwab. But what exactly do they have in common? Let's take a closer look.

  • Investment Types. While Charles Schwab offers the most investment types, all three offer stocks, options trades, ETFs, mutual funds, and bonds.
  • Account Types. All three offer taxable, joint, Roth IRA, traditional IRA, rollover IRA, SEP-IRA, SIMPLE IRA, custodial, trust, and 529 investment accounts.
  • Broker-Assisted Trades. You don't need to go at it alone. All three can give you direct help managing your portfolio, including automated and active investing advice. 
  • Commission-Free Trades. Trade U.S. stocks, options, and ETFs for free. 

How Are They Different?

These three brokers all offer solid platforms for trading, mutual funds, and index funds. But there are some key differences between the three as well: 

  • Options Contracts Pricing. Both Fidelity and Charles Schwab charge $0.65/contract, while Vanguard charges $1/contract.
  • Minimum Deposits. There are no minimums for opening accounts. But if you want to invest in most mutual funds from Vanguard, you'll need to invest at least $1,000 or in some cases, $3,000.
  • Mutual Fund Trading Costs. Fidelity charges $49.95 for buying non-Fidelity mutual funds, while Charles Schwab charges up to $74.95 for mutual funds outside of Schwab. Neither charge for trading their own mutual funds. Vanguard charges a percentage, which varies from 0.25% to 1%. 
  • Assets Available. All three offer stocks, ETFs, options, and mutual funds. Fidelity and Charles Schwab also offer fractional shares and both are prepping crypto ETFs.

Minimum Investments

For all three brokerages, there are no minimum investments required. However, Vanguard does have a minimum buy-in for their mutual and index funds. It’s $1,000 for their retirement funds and $3,000 for their actively managed funds.  

Fees

Fidelity, Vanguard, and Charles Schwab charge very few transaction fees and don't include commission fees for trading U.S. stocks, ETFs and options.

However you may run into other fees. This may happen on specific trades like trading options, but no index funds or vice versa. However, all of these companies work to keep costs low, and ultimately, most of them level out to be equally affordable.

You may find yourself paying for additional features such as customized advising (more on that below).

Customer Service

All three offer phone support, making communication fast and effective. The hours that a live person is available depends on the service you need help with. For example, banking contact mostly sticks to traditional banking hours. However, Vanguard and Charles Schwab offer 24/7 automated support, while Fidelity provides 24/7 phone support.

Fidelity also gets bonus points for easy-to-use live chat features and a virtual assistant.

Security

All three brokerages are reputable, secure, and safe. All three are regulated and use standard encryption to keep your personal information secure. You can feel confident in sharing the personal information the companies request and conducting financial business online as they're all protected and encrypted.

Advisor Services

Charles Schwab, Vanguard, and Fidelity offer various financial advisory services to customers. 

Vanguard offers both a Digital Advisor and Personal Advisor service. The Vanguard Personal Advisor requires a minimum $50,000 investment. You’ll get access to a professional advisor, with a 0.30% annual management fee. The Vanguard Digitla Advisor requires a minimum deposit of $3,000 and charges an advisory fee of 0.20%. It automates your investments into a dverisfied mix of ETFs, using Vanguard’s investing methodology. 

Fidelity Go is Fidelity’s robo advisor service. There’s no minimum balance to open an account and no advisory fees if your account is under $10,000. And if you want more personalized with a Fidelity advisor, you can get extra services with Fidelity Go+ financial advice. Its fees are slightly higher, at 0.50%, with a $25,000 minimum investment. 

And with Charles Schwab’s Intelligent Portfolios you get all the benefits of a robo advisory service with access to a human advisor when needed. There’s a minimum investment of $5,000 but there are no fees or commissions. 

Who Are They Best For? 

For Index Funds- Vanguard

If you want to invest in low-cost index funds, Vanguard could be right choice for you. Vanguard focuses on passive investing strategies with long-term investors in mind.

Vanguard mutual funds are the most affordable option. And while there's a minimum deposit, this isn't a problem if you intend to focus most of your investments in index funds. 

But if you're looking to diversify with forex, bonds, and futures/commodities or you'd like to take a more active role, you may want to look at another broker. 

For Beginners- Fidelity

If you’re new to investing and want a low-cost option with lots of learning opportunities, Fidelity could be a good choice. With Fidelity there is no minimum investment and it boasts low costs overall and a 0% expense ratio.

If you're new to the world of investing, you don't want to put a lot of money on the line right away. Fidelity is also ideal for beginners because of their extensive educational content. The trading platform can teach you all the ropes of the investing world. 

For Full Brokerage Services – Charles Schwab

For seasoned frequent traders who invest actively and are looking for the best research tools, Charles Schwab has what you need.

Charles Schwab has everything you can imagine a broker offering. It offers many asset classes, tons of resources for active traders, and full banking options for customers.

And with its branch locations across the country, Charles Schwab is worth considering if you want a one-stop-shop for your money and financial management.

Which Brokerage Service Is the Best?

When comparing Vanguard vs. Fidelity vs. Schwab, past performance isn't a good indicator. Sometimes funds go up, sometimes they go down. A better indicator is whether their services serve your financial goals.

An active trader who needs in-depth research will have different goals from someone just looking for the lowest expense ratios. Thankfully, all three brokerages have something to offer most investors.

Eric Rosenberg

Eric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full time. He has in-depth experience writing about banking, credit cards, investing and other financial topics and is an avid travel hacker. When away from the keyboard, Eric enjoys exploring the world, flying small airplanes, discovering new craft beers and spending time with his wife and little girls.

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3 Comments

  1. Vanguard has no banking option; Schwab and Fidelity both have full banking a cash-back credit cards, no too mention retail locations if that is important to you. I switched everything to Fidelity, and I use them as my bank and main credit card.

  2. Daniel. Just saw this post while searching for a clue which is best between the top 3. I had Fidelity, and now have Schwab. I like Schwab just because of their Web Site and the abilities it has makes it worth it to me. Side not about the companies I read awhile back you might like to hear.. all of the Finance Brokerage companies also give the Company you employer chooses to manage their 401K CEO a substantial kickback..

  3. I used to be with Vanguard, but couldn’t talk to a real person nights or weekends. Switched to Fidelity managed portfolio, but their fees are rather high considering they don’t decline with higher account balances. I called Vanguard-left a message-received a call back a week later-at 6AM! I’m in Mountain time zone. Good thing I’m not on the west coast. I have talked to Schwab. There is a representative in my community, which I like, but their cash allocation is too high (but the spread is how they make their money).

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