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Vanguard is a popular, low-cost brokerage for all types of investors and is one of the best online brokerages for beginners. Whether you're an active trader, passive investor, or retirement-focused individual, you should be able to find what you're looking for with Vanguard. However, Vanguard doesn't offer cryptocurrencies.
Business Insider's personal finance team compared it to similar brokerages and named it to our lists of the best online brokerages, best stock trading apps, andbest robo-advisors.
Introduction to Vanguard
Vanguard is an industry-leading online brokerage offering just about everything for every type of investor. Some ofVangaurd's more notable features include its robo-advisor, Vanguard Digital Advisor, its suite of useful tools, educational resources, and tax-loss efficient investment strategies.
If you're solely focused on retirement, Vanguard offers an expansive mutual fund selection that is hard to pass up. It also offers ESG investing options and a separate trading platform for more advanced traders. However, Vanguard doesn't offer cryptocurrency trading or NFTs.
Vanguard's investing platform suits all kinds of traders, especially retirement-focused individuals, socially conscious investors, and those seeking robo-advice. Experienced investors wanting access to fiduciary advice for account guidance and management should consider a Vanguard Personal Advisor account.
How Vanguard Works
Vanguard Brokerage Accounts
Vanguard self-directed brokerage accounts are best for active traders who want control over the investments they buy and sell. Available as individual or joint brokerage accounts, this option gives you various investment choices, including:
- Stocks
- ETFs
- Options
- Bonds
- Mutual funds
- CDs
You can buy Vanguard's mutual fund in two ways: as investor or admiral shares. Admiral shares are more affordable compared to regular investor shares. Here's how they compare:
| Investor Shares | Admiral Shares |
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Vanguard mutual funds include index, actively managed, target retirement, and ESG funds.
Educational resources for Vanguard investors help users make online trades and manage portfolios. Vanguard also has a "News & Perspectives" hub that keeps you informed on the latest investing trends.
Automated and Advisor-Managed Accounts
Are you not interested in picking investments on your own? Vanguard offers some options for hands-off investors who prefer automated or advisor-managed accounts. These include the following:
- Vanguard Digital Advisor: This is Vanguard's automated investing account. It creates a personalized portfolio for you that's composed of Vanguard ETFs. The account has a $3,000 minimum and 0.20% advisory fee.
- Vanguard Personal Advisor: This account merges automated management with one-on-one financial advisor support. Though it has higher fees (a $50,000 account minimum and 0.30% balances under $5 million; those with larger balances pay less annual fee), you get to take advantage of professional advice from a Vanguard fiduciary advisor.
Vanguard Retirement Accounts
Vanguard is also a great resource for those interested in using retirement accounts to build wealth. The brokerage offers several options, including:
- Traditional IRAs
- SEP IRAs
- Roth IRAs
- 401(k) rollovers
- Individual 401(k)s
- SIMPLE IRAs
Investing in Vanguard's retirement accounts gives you access to the investment platform's range of ETFs and Vanguard's All-in-One retirement funds. All Vanguard target retirement funds have at least a $1,000 minimum.
Most retirement savings account options are available through Vanguard's robo-advisor or managed account.
Business Insider's guide to the best retirement plans »
Vanguard Education Savings Plans
Low-cost investing with Vanguard Brokerage offers multiple options for investing for a child or dependent. These include its 529 education savings plans, UGMA/UTMA custodial accounts, and trust administration and investment management services.
Vanguard is one of the brokerages used in the best 529 plans, offering its users access to a DIY portfolio or hands-off options. Its individual 529 portfolios (the DIY option) — which let you create your own investment strategy — give you access to several mutual funds and ETFs. These include all-in-one retirement funds, total market ETFs, and environmental, social, and corporate governance (ESG) funds.
Active investors might enjoy its Target Enrollment portfolios that diversify your money across stocks, bonds, and cash investments. Invest toward a maximum of five education goals in the same account. Vanguard handles all of the legwork for you, and you'll just have to select a portfolio based on which year you expect your dependent to start school.
Vanguard Fees
A self-directed Vanguard brokerage account has a $0 minimum requirement with a 0% fee. Vanguard Digital Advisor requires a $3,000 minimum and charges a 0.20% fee. For Vanguard Personal Advisor, you'll need to meet a $50,000 minimum, plus a 0.30% advisory fee for accounts under $5 million.
You'll pay between $1,000 and $50,000 for mutual funds. (You may need more depending on the fund.) Vanguard ETFs cost $1, while non-Vanguard ETFs vary by share price.
Vanguard Pros and Cons
Vanguard Pros
- Commission-free trading of stocks and ETFs
- Large selection of mutual funds
- Low expense ratio
- Huge selection of retirement tools
- Tax-loss harvesting features
- Multiple account options (robo-advisor, advisor-managed, and DIY)
Vanguard Cons
- High mutual fund minimum
- Higher options trading fees
- Doesn't offer a separate trading platform for advanced trading
- No cryptocurrencies
Vanguard Trustworthiness
The Better Business Bureau has given Vanguard an F rating. BBB ratings typically range from A+ to F and reflect the bureau's opinions of a company's customer complaint history, business practices, and advertising and licensing information. The BBB states the reason for the low rating is multiple complaints filed against Vanguard and several unresolved complaints.
In 2023, a lawsuit was filed against Vanguard for supposedly mishandling target-date funds and breaching fiduciary duty. Vanguard denies these allegations and is currently under investigation. In November 2023, Vanguard attempted to get the lawsuit tossed out by a federal judge. Although some of the plaintiff's arguments against Vanguard were dismissed, the allegation of possible fiduciary breach will go to trial.
On June 1, 2023, the Financial Industry Authority (FINRA) fined and censured Vanguard for multiple errors found in 8.5 million customer statements. Vanguard paid a $800,000 fine and has since corrected the errors.
June 10, 2023, a whistleblower lawsuit originally filed back in 2013 began mediation. It alleges that the former Vanguard employee was wrongfully terminated after discovering billions of dollars worth of fraudulent tax behavior by Vanguard. David Danon, the employer, was fired less than a month after filing with the SEC. This case is still currently under investigation.
In 2022, Vanguard agreed to a $6.25 million settlement with Massachusetts Secretary of State William Galvin for allegedly failing to warn investors of large tax bills after investing in target-date funds.
Vanguard vs. Other Online Brokerages
Vanguard vs. SoFi
SoFi is another popular online brokerage offering both self-directed brokerage accounts and a robo-advisor option.
Vanguard and SoFi Invest® provides various account options for different types of investors. The two investment platforms have self-directed brokerage accounts for active traders, automated accounts for passive investors, and IRAs for retirement-focused individuals.
But unlike Vanguard, SoFi doesn't offer any advisor-managed investing accounts like Vanguard Personal Advisor. However, SoFi provides complimentary access to certified financial planners (CFPs), so you can still take advantage of professional advice if you so desire.
SoFi Invest review
Vanguard vs. Fidelity
Fidelity is one of Vanguard's top competitors, offering top-notch investing, banking, and personal finance services. The low-cost brokerage account has a regular self-directed account, multiple IRAs, and a robo-advisor. While Vanguard and Fidelity are mostly neck and neck, Vanguard and Fidelity's fees differ in some areas.
For instance, when it comes to robo-advice, you'll pay less to start at Fidelity Investments. Fidelity's standard automated investing account, Fidelity Go, has a $0 minimum requirement, and it charges $0, $3/month, or 0.35%/year, depending on your account balance. Vanguard's equivalent account, Vanguard Digital Advisor, has a $3,000 minimum requirement. However, its constant 0.20% annual fee may appeal more to those with higher balances.
In addition, Fidelity Personalized Planning & Advice also has a lower minimum requirement ($25,000) than Vanguard Personal Advisor Services. But Vanguard charges a lower annual fee (0.30% balances under $5 million; those with larger balances pay less) for its account.
Read our Fidelity review and our in-depth Vanguard vs. Fidelity investing comparison.
Methodology: How We Reviewed Vanguard Investing
We use Business Insider's rating methodology for investing platforms to compare and examine pricing for Vanguard's account options, investment availability, and overall customer experience when reviewing investment apps. Each platform receives a rating between 0 and 5.
Online brokerages offer varying assets, financial tools, fees, and other resources. Some brokers are better for more advanced investors or active investors, while others may better suit beginner investors and passive investors. Vanguard was evaluated with a focus on how it serves in each category.
Business Insider's Overall Vanguard Rating
| Feature | Rating (out of 5) |
| Fees | 4.50 |
| Investment selection | 5.00 |
| Access | 4.12 |
| Ethics | 4.50 |
| Customer service | 4.25 |
| Overall score | 4.49 |
FAQs about Vanguard
What is a Vanguard Brokerage Account, and what does it offer?
A Vanguard brokerage account includes self-directed, automated, and advisor-managed accounts to trade stocks, bonds, and thousands of low-cost mutual funds and ETFs. As one of the largest investment management companies, investors can access Vanguard's suite of educational features and trading tools for simple portfolio diversification and cost-effective management.
How does Vanguard stand out from other brokerage firms?
The online brokerage stands out from other top brokerage firms with Vanguard's unique client-owned structure benefits, expert-crafted target date retirement funds, and advisor services. Known for its extensive selection of low-cost index funds and ETFs, Vanguard is a great brokerage for all kinds of investors looking to minimize costs and maximize returns.
What are the fees associated with a Vanguard Brokerage Account?
Vanguard is generally a low-cost brokerage affordable for all kinds of investors, especially since users can purchase low-cost Admiral Shares for more costly index and mutual funds. Vanguard doesn't require a minimum deposit to open a standard brokerage account and users can trade Vanguard's commission-free ETFs and stocks. That said, some Vanguard account options require a higher minimum deposit, like Vanguard Personal Advisor, which has a $500,000 minimum.
Is Vanguard Brokerage Account suitable for beginner investors?
Yes, Vanguard brokerage account is suitable for beginner investors. Its simple interface, copious educational guides and market research resources, and automated investing accounts make it a suitable choice for those just getting into wealth-building. Beginners can still trade on their own, but you can alternatively use Vanguard Digital Advisor or Vanguard Personal Advisor if you'd rather leave the investment decisions to the professionals.
Can advanced investors find value in a Vanguard Brokerage Account?
Yes. Vanguard brokerage accounts are a great option for all kinds of investors, including advanced investors. Experienced traders can find value in Vanguard's cost-effective investment strategies, retirement fund options, a wide range of index and mutual funds, and customizable dashboard features. However, advanced traders don't have a separate Vanguard trading platform.
Investing and Retirement Reporter
Tessa Campbell is an investing and retirement reporter on Business Insider’s personal finance desk. Over two years of personal finance reporting, Tessa has built expertise on a range of financial topics, from the best credit cards to the best retirement savings accounts.ExperienceTessa currently reports on all things investing — deep-diving into complex financial topics, shedding light on lesser-known investment avenues, and uncovering ways readers can work the system to their advantage.As a personal finance expert in her 20s, Tessa is acutely aware of the impacts time and uncertainty have on your investment decisions. While she curates Business Insider’s guide on the best investment apps, she believes that your financial portfolio does not have to be perfect, it just has to exist. A small investment is better than nothing, and the mistakes you make along the way are a necessary part of the learning process.Expertise:Tessa’s expertise includes:
- Credit cards
- Investing apps
- Retirement savings
- Cryptocurrency
- The stock market
- Retail investing
Education:Tessa graduated from Susquehanna University with a creative writing degree and a psychology minor.When she’s not digging into a financial topic, you’ll find Tessa waist-deep in her second cup of coffee. She currently drinks Kitty Town coffee, which blends her love of coffee with her love for her two cats: Keekee and Dumpling. It was a targeted advertisem*nt, and it worked.
Compliance Associate
Elias Shaya is a Compliance Associate on the Personal Finance Insider team based in New York City, whichensures content accuracy and editorial independence so readers are always getting up-to-date and objective financial advice.The team also works to minimize risk for partners by ensuring language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up-to-date and accurate.He joined Insider in February 2022 as a fellow on the compliance team.
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