Vanguard 2021 update Review: Pros, Cons, and More

Top Perks

Zero-commission trading

Vanguard was one of the last holdouts in the zero-commission revolution, but the company has scrapped its stock and ETF trading commissions for online trades.

Low cost ETFs and mutual funds

This is perhaps the biggest reason to use Vanguard as your broker. Vanguard’s proprietary mutual funds and ETFs have some of the lowest expense rations. In addition to being able to buy and sell Vanguard’s excellent family of mutual funds with no transaction fee, Vanguard offers thousands of other mutual funds on a no-transaction-fee (NTF) basis. Plus, its mutual fund commission of $20 for all other funds is on the lower end of the spectrum relative to peers. That’s reduced to $8 or less for investors with at least $500,000 invested in Vanguard’s mutual funds and ETFs.

No account minimums

Vanguard has no minimum deposit requirement to open a brokerage account. That said, the platform doesn’t allow you to trade fractional shares of stock, so you’ll need at least enough to cover one share of whatever stock or ETF you want. And if you plan on buying mutual funds, keep in mind that most have their own minimum initial investment requirements.

International market access

This is both a good and bad feature. Unlike many online brokers, Vanguard allows investors to buy stocks directly on foreign stock exchanges. However, doing so comes with a steep $50 commission.

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Research access

Vanguard provides third-party stock research reports from Standard & Poor’s, Thomson Reuters, and First Call. This can help beginners find good investment candidates and can also be a great tool to help learn the basics of stock analysis.

Lots of account types

Vanguard offers individual and joint brokerage accounts, traditional and Roth IRAs, SEP-IRAs, SIMPLE IRAs, solo 401(k)s, and 529 college savings plans.

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