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Charles Schwab vs. Vanguard

Compare fees, research tools and customer reviews when choosing between these two trading platforms.

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Charles Schwab and Vanguard are full-service brokerages with similar offerings, including a trading platform and in-house financial advisory services. But one platform is more competitively priced, especially if you can’t invest a healthy sum.

Which one is better?

  • Choose Charles Schwab if you’re an active trader looking for a customizable platform.
  • Choose Vanguard if you’re a buy-and-hold investor with a high account balance.

Charles Schwab and Vanguard both offer commission-free trades, but they appeal to different investors. The better broker comes down to how often you want to trade and your account balance.

Schwab puts powerful research tools at your disposal with no account minimums. Plus, its customizable desktop platform makes trading more efficient with hotkeys and multiple screens — good for advanced traders who use fundamental analysis. And if you’re new to trading, Schwab has videos, workshops and articles, making it a good option for beginner traders.

Vanguard is better suited for long-term investors. You get 25 free trades a year, but its lackluster trading platform makes active trading impossible. Instead, its low expense ratio and tiered system that cuts fees for customers with larger accounts make it an attractive option for high-balance investors seeking a low-cost portfolio. But watch out for its monthly account fee.

Overview

Charles SchwabVanguard
Fees

★★★★★ 4/5

★★★★★ 2.5/5

Available securities

★★★★★ 5/5

★★★★★ 4/5

Customer support

★★★★★ 5/5

★★★★★ 5/5

Mobile app

★★★★★ 4.8/5

★★★★★ 4.6/5

Research and tools

★★★★★ 5/5

★★★★★ 3/5

Reliability

★★★★★ 3/5

★★★★★ 3/5

Bonus star

1

We awarded a bonus star for Vanguard’s client-owned structure.

To learn how our star ratings are calculated, read the methodology at the bottom of the page.

How do Charles Schwab and Vanguard compare?

Charles SchwabVanguard
Charles Schwab logo
Vanguard
Finder’s rating

★★★★★ 4.4/5

Charles Schwab is a well-known broker offering commission-free online trades, extensive research and around-the-clock phone support to a range of investors. It caters to a wide range of investors including active traders and fundamental traders.

★★★★★ 3.7/5

Vanguard is an investor-owned brokerage that specializes in low expense ratio ETFs. Its tiered investment services are best suited to long-term investors with high account balances, as it offers a personal advisor service for investors with at least $50,000 on hand. Investors that purchase its mutual funds and ETFs don’t pay commissions and become part-owners of the company.

Stock trade fee$0$7
Option trade fee$0 + $0.65/contract
or $25 if it is a broker-assisted trade
$0
Annual fee0%0%
Minimum deposit to open$25,000$0
Benefits
  • Commission-free trades. Investors pay $0 commission to trade stocks and ETFs online.
  • 24/7 support. Customer support anytime by phone.
  • Robust research tools. Powerful, proprietary research tools to help find and assess trade opportunities.
  • No account minimum. No minimum deposit or balance for its brokerage accounts.
  • Investment products. Schwab has a full suite of investment offerings, including cryptocurrency, with Bitcoin futures, which Vanguard doesn’t offer.
  • Fractional shares. Buy a piece of a company’s stock — instead of the full share — for as little as $5.
  • Commission-free trades. No commission fee when you trade stocks and ETFs online on the first 25 transactions in a calendar year.
  • Low expense ratio. The industry average for mutual funds was 0.63% in 2018, whereas Vanguard’s expense ratio averaged 0.10%. A lower ratio means lower overhead, translating to more money in your pocket.
  • Investor-owned company. While most major investment firms are publicly traded, Vanguard’s investors own the company. Become a shareholder or part-owner when you invest in a mutual fund or ETF.
Drawbacks
  • Average reviews. Schwab has a 1- out of 5-star customer rating on the Better Business Bureau (BBB), with customers complaining that Schwab closed or locked their accounts without warning.
  • Average margin rates. Schwab interest rates on its margin accounts aren’t the most competitive. For example, for a $20,000 loan balance, Schwab charges an effective rate of 8.325%, to Vanguard’s 8.00%. And it doesn’t disclose its rates for balances $500,000+.
  • High fees. Although Vanguard offers commission-free trades, its options contracts and ongoing account fees are higher than its competitors. And it charges a separate transaction fee on most trades. But with Vanguard’s tier system, the higher your account balance, the lower your account fees.
  • Investment minimums. Required minimums for investing start at $1,000, depending on account type.
  • Limited number of free trades. Once you exceed 25 commission-free trades in one calendar year, Vanguard charges $20 per trade.
  • Limited trading technology. No streaming quotes or desktop platform.
Tools and research
  • 3 trading platform options. Choose between a desktop program, a web-based platform or mobile apps. Its desktop platform is customizable with hotkeys and multiple tool combination layouts.
  • Equity ratings. Schwab’s propriety rating system assigns over 3,000 stocks a grade of A through F.
  • Charts, quotes and fundamental research. Advanced real-time charts, momentum indicators and fundamental metrics, such as company earnings and dividends.
  • Screening and news tools. Identify stocks and ETFs that fit your criteria while streaming the latest news on markets, financials and earnings.
  • Trader education. Watch live broadcasts and videos, attend virtual or in-person workshops or study articles on a self-guided trading path.
  • Screener and profiles. Mix and match investment criteria to find potential trades and get objective analyses from experts and agencies such as Standard and Poor’s and Thomson Reuters.
  • Historical dividend. See the past dividends of stocks, ETFs and mutual funds.
  • Investor education. Vanguard has a series of articles on its website to show you investing basics.
Reputation and customer reviews
  • Reviews are mixed.
  • Customers praise its in-depth research amenities and friendly customer service.
  • Customers complain about sudden account locks and closures.
  • Reviews are mixed.
  • Customers praise Vanguard’s pressure-free advice and the growth of their portfolios.
  • Customers complain about delays when withdrawing money and transfer requests.
Apple App Store reviews

★★★★★ 4.8/5

★★★★★ 4.7/5

Google Play Store reviews

★★★★★ 4.1/5

★★★★★ 2.1/5

Support
  • Phone. Call 866-855-9102.
  • Live chat. Start a chat through the website.
  • Phone. Call 800-349-5814.
  • Email. From the Contact Us Brokerage Services page, click Send a secure message to fill in Vanguard’s email form.
  • By US Mail. Vanguard, PO Box 2600, Valley Forge, PA 19482-2600
Learn more

Read our review

Read our review

Bottom line

Charles Schwab and Vanguard both boast commission-free trades. But it’s the fees that set them apart. Vanguard limits you to 25 free trades in one year before it costs $20 per trade — and that’s on top of its monthly account fee. And although there’s no minimum deposit to open an account, you’ll need $1,000 to start investing. Its tiered system is kinder to investors with high account balances that don’t make trades often.

Schwab has no account minimum or monthly fees. And its robust platform, comprehensive trade education tools and 24/7 customer support make it a well-rounded platform for amateur and experienced traders.

If neither of these brokers seem like the right fit, consider other platforms.

Frequently asked questions

How we rate trading platforms

★★★★★ 5/5 — Excellent

★★★★★ 4/5 — Good

★★★★★ 3/5 — Average

★★★★★ 2/5 — Subpar

★★★★★ 1/5 — Poor

We analyze top online trading platforms and rate them one to five stars based on factors that are most important to you. These factors include fees, securities available for trade, customer support, customer feedback, platform resources and overall reliability.

For a complete breakdown of how we score each category, read the full methodology of how we rate trading platforms.

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