E*TRADE vs. Vanguard

Online trading platform Vanguard offers full-service securities trading but is best known for its huge range of mutual funds. E*TRADE, which arguably ushered in the modern era of online finance, offers a streamlined, easy-to-use day-trading app where investors can trade stocks, exchange-traded funds (ETFs), futures, and options. Each product is aimed at two distinct types of investors. From fees to features and more, here’s what you need to know about each one.

A financial advisor can give you more information on the ins and outs of what you should look for in an investing platform.

E*TRADE vs. Vanguard: Fees

One of the most important aspects of comparing any brokerage firm is to consider what it’s going to cost you. There are usually four types of fees to look out for when choosing a trading platform, which are:

Trading fees: Any fixed charge attached to each trade that you make. This can come in the form of a flat fee or what’s known as the “spread.” This is when your broker charges you based on the difference, if any, between the buying and the selling price of an asset.
Trading commissions: This is when a broker will charge you a percentage based on the volume or value of each trade.
Inactivity fees: Any fees that the broker charges you for not trading, such as for keeping money in a brokerage account.
Non-trading/Other fees: Any form of fee for trading on this platform not covered above. For example, a brokerage might charge you for making deposits into your brokerage account, taking money out of it or signing up for additional services.

Online trading platforms have historically carried fees over from the brokerage model, but did away with many of the fees associated with trading. For example, E*TRADE and Vanguard offer free trading for all stocks, mutual funds and exchange-traded funds (ETFs). However, they charge for other services.

Vanguard Fees

Vanguard charges a $1 fee for all options contracts traded under $1,000,000. Then they have a sliding scale that escalates beyond $1,000,000. The firm also charges $1 per $1,000 for most bonds traded on the secondary market; there is no fee for buying bonds on the primary market. Minimums are $1,000 for most bonds and $5,000 for municipal bonds. Note, however, that all fixed-income trades are subject to dealer minimums.

Purchases of Vanguard mutual funds and ETFs (as well as stocks) are $0 for online transactions. This covers transactions for more than 160 Vanguard mutual funds and some 3,000 no-transaction-fee funds from other companies. If the amount being traded is less than $1,000,000 and it is broker-assisted, there is a $25 fee. A few Vanguard mutual funds charge special purchase or redemption fees, which vary from 0.25% to 1% of the amount of the transaction.

For trading American Depositary Receipts (ADRs), which are shares of non-U.S. companies that can be bought with U.S. dollars, customers may pay fees, whether from the bank that handles the ADR or the relevant direct trust company.

E*TRADE Fees

Stock trades carry no fees. The firm also offers nearly 6,000 no-load, no-transaction-fee mutual funds. Treasury securities are no-cost transactions. On the secondary bond market, the firm charges $1 per bond transaction, with a minimum and maximum bond price of $10 and $250, respectively. Broker-assisted trades add a $20 fee.

For options, E*TRADE charges $0.65 per contract. If someone makes over 30 trades per quarter, E*TRADE’s charge per options contract decreases to $0.50 per contract if an investor makes at least 30 trades per quarter. The cost to trade futures is $1.50. Commissions for cryptocurrency currency futures products are $2.50 per contract per side plus fees.

Margin rates for E*TRADE range from a high of 13.2%, if the debit balance is less than $10,000, down to 11.2%% for debit balances of $250,000 to $499,999.99. Investors interested in rates for balances of $500,000 or more should consult the firm.

The firm’s standard fee for over-the-counter (OTC) trades is $6.95. ADR trades are by phone only and carry a $25 fee.

E*TRADE vs. Vanguard: Services and Features

An investor comparing E*TRADE vs. Vanguard.

Both E*TRADE and Vanguard are full-service brokerages. This means that almost all popular assets, technical indicators and trading data are available on both platforms.

Vanguard offers a wide range of investments, from mutual funds to stocks to CDs. However, its mutual fund offerings are massive and very inexpensive. The average Vanguard no-load mutual fund cost is 84% less than the industry average. Vanguard’s Total Stock Market Index Admiral Shares fund, for instance, has an expense ratio, also known as an operating expense ratio, of 0.09%, which means that an investment of $100,000 would only cost $90 a year.

E*TRADE offers users free screeners to find companies that fit a portfolio, real-time streaming market data, interactive charts and stock ticker pages. E*TRADE users also have access to OptionsHouse, a powerful platform for trading options and other securities.

In addition to stocks, E*TRADE customers can also trade bonds and options. In addition, E*TRADE provides access to ETFs and mutual funds. While many of these funds charge fees to buy and sell, E*TRADE offers hundreds of commission-free funds.

Both E*TRADE and Vanguard have research reports to help investors make informed decisions. Vanguard provides research from Thomson Reuters, First Call and Standard & Poor’s; E*TRADE provides research from S&P Capital IQ, Thomson Reuters and Morningstar.

E*TRADE vs. Vanguard: Online Mobile Experience

Vanguard’s mobile app gives customers access to all their accounts so they can check their balances, investment performance, transaction history, prices, returns, and more. Users can buy, sell or exchange investments, as well as deposit checks directly into their accounts using a device’s camera. Vanguard mobile app also includes educational features to help users learn more about the market, keep up with market news and hone investing skills.

E*TRADE’s mobile app allows customers to check their balances, investment performance, transaction history, prices, returns and more. They can also buy, sell, or exchange investments and use their device’s camera to deposit checks directly into their account.

E*TRADE vs. Vanguard: Account Types Available

Both E*TRADE and Vanguard offer a variety of account types to suit different financial goals, whether you’re saving for retirement, investing for the long term, or managing wealth for future generations.

At E*TRADE, you can open:

Taxable brokerage accounts
Traditional and Roth IRAs
Rollover IRAs (to move money from an old 401(k))
Custodial accounts for minors
Trust accounts
Solo 401(k) for self-employed individuals
SEP and SIMPLE IRAs for small business owners
Managed portfolios (Core Portfolios)

Vanguard also offers a wide range of accounts, with a strong focus on retirement and long-term investing:

Taxable brokerage accounts
Traditional and Roth IRAs
Rollover IRAs
SEP and SIMPLE IRAs
401(k) rollovers
Trust and estate accounts
UGMA/UTMA custodial accounts
529 college savings plans

If your main goal is to save for retirement or invest in low-cost index funds, Vanguard may be a better fit given its strong focus on retirement planning and its suite of low-fee funds. If you’re looking for more flexibility, active trading tools, and niche accounts like solo 401(k)s or managed portfolios, E*TRADE offers broader options.

E*TRADE vs. Vanguard: Minimum Deposit Requirements

Both platforms make it relatively easy to get started, but their minimums vary depending on the account and service.

At E*TRADE, there’s no minimum deposit required to open a standard brokerage account or an IRA — you can start investing with whatever amount you’re comfortable with. However, if you want to use E*TRADE’s Core Portfolios (its managed account service), the minimum investment is $500.

Vanguard also doesn’t have a minimum for opening a brokerage account or IRA, but many of its mutual funds have their own investment minimums, often starting at $1,000 to $3,000. For example, to invest in Vanguard’s Admiral Shares funds — which offer even lower expense ratios — you typically need at least $3,000 per fund.

For investors who want to start small and build over time, E*TRADE’s zero minimum on most accounts makes it more accessible. If you plan to focus on Vanguard’s mutual funds and can meet the fund minimums, however, Vanguard is ideal for buy-and-hold investors who prioritize low costs over frequent trading.

E*TRADE vs. Vanguard: Who Should Use It?

Vanguard has built its reputation on serving long-term, buy-and-hold investors with its low-cost index funds and ETFs. The company’s unique ownership structure, where investors essentially own the company, allows it to keep expense ratios exceptionally low. This approach particularly benefits retirement savers and those following passive investment strategies who want to minimize costs over decades of investing.

E*TRADE stands out as a potential better choice for active traders who value robust trading tools and frequent market participation. Its platform offers advanced charting capabilities, real-time data, and specialized trading features that appeal to those who execute multiple trades regularly. E*TRADE’s mobile app also provides a seamless experience for traders who need to monitor and adjust their portfolios on the go.

When comparing E*TRADE and Vanguard, cost-conscious investors should carefully examine the fee structures of both platforms. While both offer commission-free stock and ETF trades, Vanguard typically has lower expense ratios on its proprietary funds. E*TRADE, however, may offer more competitive pricing on options contracts and provides more frequent traders with additional benefits based on account activity.

Bottom Line

Vanguard is best known for its low-cost stocks and funds. Opening a Vanguard brokerage account works best for those interested in long-term investing, and it’s a great place for your retirement savings. E*TRADE sets itself apart by having a robust, user-friendly app and over 60 futures products available. More sophisticated investors will probably prefer the range of options offered by E*TRADE.

Tips for Investing

Regardless of which platform you decide to use, all investing should start with a carefully thought-out financial plan and a corresponding investment strategy. You may want to talk to a financial advisor to get advice on both areas, as they have the expertise to help guide your entire process. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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