Vanguard Review 2024: Pros, Cons and How It Compares

Where Vanguard shines

Large mutual fund selection: Vanguard has more than 3,600 no-transaction-fee mutual funds, and an expanded lineup of proprietary, low-cost mutual funds and ETFs.

Leader in low-cost funds: The company has a solid reputation for the well-below-average expense ratios on its index funds and exchange-traded funds. For long-term investors looking to pair a buy-and-hold strategy with the lowest-cost offerings, it's hard to beat the service and selection found with Vanguard.

Where Vanguard falls short

What type of investor should choose Vanguard?

Retirement investors: Vanguard's lineup of low-cost funds and trusted name is reassuring to any investors looking to park their retirement funds and forget about them.

High-net worth investors: Once you've built your nest egg, Vanguard can help you with a full-service financial advice offering. This includes financial planning, investment advisory, wealth and estate planning and more.

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Vanguard at a glance

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How to sign up for a Vanguard account

To open an account with Vanguard, you'll need to choose an account type to match your investment goal, whether that's retirement, general investing or saving for education. You'll have to initiate a bank transfer to your new account and wait three to seven days for the money to become available. Once your money has transferred you can start investing. To open an account, you'll need your bank account and routing numbers, your Social Security number and your employer's name and address.

We found that setting up an account can be a heavier lift on Vanguard than with some competing brokers. For instance, our attempts to fund an account with a transfer from our small credit union led to a dead end that could only be resolved by sending Vanguard a check — not ideal for new customers who want to start trading right away. That said, if you're investing on a years-long time horizon, a few days might not make that much of a difference.

What to know about Vanguard fees

Vanguard's account minimum is $0, but keep in mind many Vanguard mutual funds may require a minimum initial investment. Vanguard funds have minimums that start at $1,000.

Following on the heels of the rest of the stock brokerage industry, Vanguard has eliminated all stock trading commissions. Options trades are commission-free, but they still carry a contract charge, which is $1 — higher than many other brokerages. That said, account holders with $1 million to $5 million in Vanguard assets get 25 free option trades per year; customers with $5 million or more get 100 free trades per year.

» See our list of the best brokers for trading options

Vanguard charges no closing or inactivity fees, but the broker may charge a $100 fee for each account closure and full transfer of assets. There is a $25 annual account service fee for all brokerage accounts and IRAs that is easily waived for clients who sign up for statement e-delivery.

Vanguard trading platforms and apps

Vanguard is designed for long-term retirement investors, rather than active traders, as evidenced by Vanguard's no-frills trading platform. You'll have to look elsewhere for bells and whistles such as access to IPOs and over-the-counter stock trades.

Vanguard has apps available for iOS and Android, which allow users to trade mutual funds, ETFs and stocks, as well as monitor account activity and analyze performance.

Vanguard investment selection

Vanguard allows investors to trade stocks, mutual funds, ETFs and options. Bond investors have a solid selection on Vanguard, including Treasurys, U.S. government securities, municipal bonds, corporate bonds, CDs, preferred bonds and bond ETFs.

Vanguard pioneered low-cost funds — founder Jack Bogle actually invented the index fund — so if those are your game, you’re in excellent hands with this brokerage.

Vanguard offers more than 3,400 non-Vanguard funds and 260 Vanguard funds. Vanguard’s mutual funds and ETFs aren’t just low cost; they’re significantly less expensive than the industry average. Vanguard’s average expense ratio is 0.09%. According to a July 2024 report from investment research firm Morningstar, the average expense ratio across all mutual funds and ETFs was 0.36% in 2023^[0]

What do you do when you're already low? Go lower. Admiral Shares are a class of Vanguard mutual funds that boast super low expense ratios — as in 29% lower than the company's standard fund share class — and used to be the broker's way of passing along savings to larger account holders. But in 2018, Vanguard lowered the minimum investment threshold for many of those index funds to $3,000 from $100,000.

Overall, Vanguard has a good selection for retirement investors, but active traders may want more options such as forex, crypto and futures trading.

The platform also has a limited offering of fractional shares, which allow investors to start off on higher-priced equities with a low buy-in. Fractional shares are only available for Vanguard ETFs.

Other key Vanguard features

Customer support

Vanguard's customer service is available over phone and email support. Phone representatives are available Monday through Friday, 8:00 a.m. to 8:00 p.m. Eastern.

Execution quality

Vanguard's execution quality is among the best in the business at 99.3%, and the company is among the rare brokers that don't accept payment for order flow. This means Vanguard doesn't receive compensation from market makers, who sometimes pay brokers to route investors' orders through them. The company touts this as their "client-first philosophy."

IRA account

Vanguard offers traditional and Roth IRAs for no extra charge. Some Vanguard competitors offer more IRA options, like SEP or SIMPLE IRAs.

High interest rate on uninvested cash

The interest rate you'll get on uninvested cash in your account will vary based on your account settings, but the default settlement fund is Vanguard's federal money market fund, which pays one of the highest rates of any broker we review. Currently, the rate is over 4%.

Good to know about Vanguard

Lean research and data offering

Vanguard offers research from Argus, MarketGrader and Vanguard's own bespoke team of analysts. It's a decent free offering, but it falls short of the more robust research programs put forward by top-tier competitors.

Like other retirement-oriented brokers, Vanguard offers a wealth of retirement planning tools and resources on its website. Investors can learn about investment options and prioritizing their goals, predict when they'll be able to retire with high-quality calculators and tools, estimate their retirement expenses and weigh the benefits of converting a traditional IRA to a Roth.

Is Vanguard safe?

All investing comes with the risk of loss, but Vanguard is covered by insurance and is registered with all the appropriate governing bodies.

Is an investment at Vanguard FDIC insured?

Vanguard has FDIC insurance to protect cash deposits in checking and savings accounts for up to $250,000. Vanguard is also covered by SIPC insurance, which protects brokerage accounts up to $500,000. SIPC insurance doesn't apply to investment losses or price fluctuations. Vanguard is also regulated by the Securities and Exchange Commission to ensure compliance with securities regulations, and by FINRA, which regulates broker-dealers.

Is Vanguard right for you?

Ask yourself this question: Are you part of Vanguard’s target audience of retirement investors with a relatively high account balance? If so, you’ll likely find no better home. You really can’t beat the company’s robust array of low-cost funds.