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 because 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 Schwab
Vanguard
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 Schwab
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 fee
0%
0%
Minimum deposit to open
$0
$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 and no charge on your first 25 options and transaction-fee mutual funds trades in a calendar year for assets over $1 million.
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
Charles Schwab and Vanguard both boast commission-free trades. But it’s not only 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
Your dividends are based on the percentage of the full share that you own.
Vanguard advisers are salaried employees and don’t work off of commissions. They don’t have financial incentives to recommend certain products.
You can get the monthly fee waived in one of four ways by:
Maintaining an account balance of $10,000 or more
Signing up for Vanguard’s e-delivery, which allows you to receive information electronically
Having at least $50,000 in qualifying Vanguard assets
Having an organization or trust account under an employee identification number
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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Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
Kimberly Ellis is a personal finance writer at Finder, specializing in banking and financial literacy. After teaching in public and private schools, Kimberly zeroed in on personal financial education to help families and kids develop lifelong money skills. She hails from New York City, graduating summa cum laude from Queens College with a BA in elementary education and mathematics, as well as a New York State teaching certificate. She’s also an aspiring polyglot, always in a book and forever on the hunt for the perfect classic red lipstick.
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