Vanguard vs. Fidelity vs. Schwab

Vanguard, Fidelity and Charles Schwab all provide banking, investing and financial planning services, but they differ in fees, tools and the type of support they offer. These differences can make one firm a better fit than another depending on what you want to accomplish.

If you want help choosing the right investments for your portfolio, consider using SmartAsset’s free financial advisor matching tool.

Overview of Vanguard vs. Fidelity vs. Schwab

Vanguard made a name for itself with its low-fee investment products, such as mutual funds and exchange-traded funds (ETFs). It still does this, and even non-Vanguard clients can buy Vanguard funds via a brokerage account. The firm also offers non-proprietary investment products and funds. However, it is not as agile as its competitors when it comes to trading individual equities.

Fidelity is perhaps best known for its personal investment products, namely brokerage accounts that allow users to trade stocks. Clients can invest in a wide range of stocks, bonds and other investment products using a Fidelity brokerage account. Fidelity also makes an effort to provide investment resources to its clients and does not charge much in the way of fees, though more and more brokerages and broker-dealers are moving toward fee-free investment models.

Charles Schwab, known as Schwab, is probably the most comprehensive of the three. While not as well known for its funds as Vanguard, Schwab still has a number of passively and actively managed funds and the option to trade individual equities. It also offers free robo-advisor services, along with human advisors, as well.

Vanguard vs. Fidelity vs. Schwab: Fees

Most brokerage platforms have gotten rid of transaction fees over the past couple of years. Vanguard, Fidelity and Schwab are no exception.

Brokerage account holders at each of these three institutions will not have to pay any commissions or trading fees for stocks. Trading mutual funds is mostly free at all three institutions, particularly for in-house mutual funds. Certain non-proprietary mutual funds may incur transaction costs of up to $49.95 at each institution.

The one place where you will incur consistent transaction costs is options trading. However, transaction costs for options at each institution are comparably quite low. Both Fidelity and Schwab charge $0.65 per options contract, while Vanguard charges up to $1. Keep in mind that these are contract fees, not commissions.

While some, more specific transactions may incur additional fees, trading with each of these three institutions can be done at a low cost and can be entirely free if you only invest in individual equities and in-house funds.

It’s worth noting that these fee schedules don’t include the charges you’ll incur for owning shares of certain funds. Fidelity has a wide variety of funds with no expense ratios, and both Vanguard and Schwab have average expense ratios that are a lot lower than the industry standard.

Vanguard vs. Fidelity vs. Schwab: Services and Features

Understanding the differences in fees among Vanguard vs. Fidelity vs. Schwab can help you make the best decision for your investment strategy.

When comparing investments and brokerage accounts from Vanguard vs. Fidelity vs. Schwab, you will find a relatively similar suite of services. As mentioned before, each institution allows clients to trade individual equities fee-free. Each also offers a wide range of accounts, including 401(k)s,529 plans, custodial accounts, a variety of individual retirement accounts (IRAs),joint accounts and more.

Each of the three institutions has $0 investment minimums for most accounts. However, Vanguard does have minimums for some of its mutual funds, typically ranging from $1,000 to $3,000. This is fairly competitive, as other funds have even higher minimums.

As noted, Vanguard is well-known for its fund offerings, allowing investors to passively manage their money instead of constantly monitoring a portfolio of individual stocks. While you still have the option for traditional trading, Vanguard’s services are particularly geared towards those who want to invest in mutual funds, as well exchange-traded funds and index funds.

With Fidelity, there are no fees or minimums. In addition to commission- and fee-free trading, you will also have access to loads of fee-free funds. Fidelity also offers clients investment education resources at no charge.

While Fidelity and Vanguard both have their own versions of a robo-advisor service, Schwab’s stands out a bit above the rest. Schwab Intelligent Portfolios takes into account your preferences by having you take a short quiz and then invests your assets in low-cost funds based on your answers. This service is optional, so even if you decide not to use it, you’ll still have access to Schwab’s range of brokerage services. Like Fidelity, Schwab has a solid suite of financial and investment resources for beginners.

Fidelity’s robo-advisor service is called Fidelity Go. It provides a light advisory service with no minimum balance requirement. There is no advisory fee for accounts with balances under $25,000, but accounts with over $25,000 are charged an annual fee of 0.35% of assets under management.

Vanguard also has a robo-advisor service called Vanguard Personal Advisor Services. This service blends both automated and personalized investment services and charges a 0.30% to 0.31% management fee. It requires a minimum balance of $50,000, so you may be better off working directly with a financial advisor.

Vanguard vs. Fidelity vs. Schwab: Online and Mobile

Vanguard, Fidelity and Schwab each offer mobile experiences in addition to desktop versions. You can even contact the companies directly online or over the phone.

Each company has solid functionality when you visit the desktop website. You can buy and sell equities, funds and more. You can also access any robo-advisor services, transfer money and utilize educational resources.

The mobile apps of each of these institutions vary in popularity and usability, with Schwab sitting somewhere between Fidelity and Vanguard. While the Schwab app has a 4.8-star rating on the App Store, it holds an underwhelming 2.6-star rating on Google Play.

A common criticism is that Schwab overwhelms customers with information. This could be a positive for more seasoned traders, but new investors may feel overwhelmed.

The Vanguard app is well regarded by Apple users with a 4.7-star rating. Meanwhile, it’s not as highly rated by Android users, with 3.5 stars on the Google Play store.

Fidelity seems to have the best overall online and mobile experience for customers. While it is similar to Schwab in that it may be overwhelming for newer investors, it seems easier to navigate than Schwab. Plus, with Fidelity’s suite of educational resources, new investors should have no problem figuring out how to best use the platform to invest their money.

It is highly rated, too. On the App Store, the Fidelity app has a 4.8-star rating, and on the Google Play store, it has a 4.6-star rating.

Who Should Use Vanguard, Fidelity and Schwab?

Vanguard, Fidelity and Schwab boast many of the same important features:

Each allows you to invest in a variety of securities, from equities to funds, without paying fees and commissions.
Each has low to non-existent expense ratios for funds.
Each is a capable online trading and account management platform that you can take advantage of.

Vanguard stands out because of its suite of exchange-traded, index and mutual fund offerings. Tough some of these have high minimums. You can also trade individual stocks and bonds with Vanguard, but you’ll usually be better off taking advantage of the fund offerings that the company has curated.

Fidelity stands out slightly above its two competitors, largely because there isn’t much that the company doesn’t do. The company boasts a robust trading platform that can be utilized by both experienced investors and beginners alike. You can use Fidelity’s comprehensive suite of investment tools and educational resources to fine-tune your investment abilities.

Schwab holds up quite well against the competition, too, especially when it comes to its robo-advisor service. You can take advantage of it or invest on your own. However, the firm’s platform tends to focus on investors with more experience.

Bottom Line

A man compares Vanguard vs. Fidelity vs. Schwab.

When comparing Vanguard, Fidelity and Schwab, you’ll find that they share many strengths. All three are large, well-known brokerage firms with broad offerings that serve beginners and experienced investors alike. They provide the core features most people need, along with more advanced tools, and each allows online and mobile trading with no commissions. For many investors, any of the three can be a reliable choice for long-term investing.

At the same time, the best fit depends on what you want from your account.

“If you’re looking for something in particular–like resources as a beginner investor, robo-advisory services, active account management or particular funds–then it will pay off to do a little more research to find the platform that matches your investment aptitude and preferences,” said Tanza Loudenback, CFP®. A financial advisor can also help you figure out which platform fits your long-term goals and how you prefer to manage your money.

Tanza Loudenback, CFP® provided the quote used in this article. Please note that Loudenback is not a participant in SmartAsset AMP, is not an employee of SmartAsset and has been compensated. The opinion voiced in the quote is for general information only and not intended to provide specific advice or recommendations.

Investing Tips

Ask a financial advisor about which long-term financial strategy suits your future plans. 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.
If you decide to invest on your own, it pays to know what you’re doing. SmartAsset has you covered there as well. For example, check out our free investment calculator.