Vanguard vs. Fidelity: what’s the difference?

Summary 

Vanguard vs Fidelity: what’s the difference? 

Known around the world, Vanguard and the Fidelity Research and Management Company are two of the most popular and well-rounded brokerage firms. Given the popularity of these firms, it’s not surprising that individuals who are interested in investing or who are looking for a new firm wonder who comes out tops when it’s Vanguard vs Fidelity. 

Both firms offer an extensive range of products and services, selling investment and financial management as flagship products. They also offer web- and app-based online trading platforms, data and research, and customer support services.  

Despite the similarities that you’ll find when you look at Fidelity vs Vanguard, the two firms’ offerings are not identical. In fact, some of the differences between them are significant enough to be the deciding factor when it comes to which one you think is the best investment firm for your needs. Dive in and find out what these firms have to offer. 

What fees can I expect from Vanguard and Fidelity? 

While fees are an inescapable aspect of investing and trading, it’s good to remember that fees can and do vary from firm to firm. Most firms charge the same types of fees, including: 

When looking for the best investment firms, it’s important not only to consider their fees but also to evaluate them. Don’t limit yourself to thinking about fees in terms of affordability. You also should ensure that they offer value for money.  

Even though the above fees are common to most brokerage firms, things are different when it comes to Fidelity vs Vanguard fees. Neither of these firms charges a commission for trading stocks, options, ETFs, and most mutual funds.  

Vanguard charges a $1 contract fee for options, while Fidelity charges a $0.65 contract fee. Vanguard also charges $49.95 for costs incurred by some transaction fee mutual funds, while Fidelity charges $20 for the same. 

As for bonds, does Vanguard or Fidelity come out tops? Vanguard doesn’t charge fees for new issue bonds. However, the firm’s secondary market bonds have a $1 per $1,000 fee as well as a $25 broker-assisted fee if you purchase those bonds over the phone. In contrast, Fidelity charges a $1 fee for bonds as well as a $19.95 broker-assisted fee if you initiate the transaction. 

When it comes to account fees, Vanguard charges a $20 annual fee for IRA and brokerage accounts. However, the firm will waive the fee if you hold at least $10,000 in Vanguard ETFs and mutual funds, at least $50,000 in qualifying Vanguard assets, have an organization or trust account with a registered EIN or elect e-Statements. Fidelity does not charge annual brokerage and IRA account fees. There aren’t non-trading or inactivity fees at Fidelity or Vanguard, and neither firm requires a minimum account opening balance. 

Is Fidelity or Vanguard better? 

After exploring the fees at two of the best investment firms, let’s take a look at whether Fidelity or Vanguard is better in terms of their other offerings, starting with their pros and cons. 

Vanguard:

Fidelity:

Fidelity or Vanguard: which should I choose? 

As both firms have much to offer investors, you might still be left wondering whether you should choose Fidelity or Vanguard. Depending on your circumstances, one of these firms might suit your needs better than the other, so it’s important to consider them from every perspective. Let’s explore a few more facets of Vanguard vs Fidelity. 

Which platform is better suited for novice investors? 

Both Vanguard and Fidelity are beginner-friendly, but Fidelity's extensive educational resources and customer support may make it a preferred choice for those new to investing. 

Which platform provides better customer service and support? 

Fidelity is typically known for its comprehensive customer service and educational resources, making it a top choice for investors seeking guidance and assistance. The data, research, planning tools, and calculators available via the firm’s online and mobile platforms are supplied by several third parties. 

Fidelity is also well-known for robust customer support that is readily available and easy to access. You can find support via channels such as live chat, email, and telephone. 

Vanguard also offers a variety of planning tools and calculators, although you will find less data and research at this firm than you would at Fidelity. Vanguard also offers support via live chat, email, and telephone. 

Can I access my Vanguard or Fidelity accounts through their websites and mobile apps? 

Yes, Vanguard and Fidelity offer online and mobile access. You can manage your investments, monitor balances, and execute trades on your devices. 

Need more information? 

Given that both firms are similar and yet have such distinctive selling points, the winner in Vanguard vs Fidelity depends on what you, as an individual with unique needs and goals, are looking for. Both have no-fee, zero-commission, or low-fee offerings, as well as very different pricing structures for where they charge fees.  

The pros of both firms will have particular appeal to specific types of investors. The cons of one firm will be less off-putting to some investors than to others. Think carefully about whether you should choose Vanguard or Fidelity, as this, like many of your investing decisions, is important.  

To learn more about the biggest investment firms and how they compare, let us match you with an SEC-regulated advisor who can offer you expert financial advice.