If you’re on the hunt for a new brokerage account, the two biggest names in the field — Vanguard and Fidelity — might come to mind first.
You might be curious, as we were, about how these two stack up side by side. We’ve put Vanguard and Fidelity in a head-to-head battle to help you decide who should win your money.
There’s one thing to get clear right upfront. Both Vanguard and Fidelity are retirement powerhouses — their proprietary mutual funds line many 401(k)s, and Fidelity is a leading 401(k) record-keeper. (View our list of the best IRA accounts.)
But Fidelity also caters to active traders, with robust trading platforms and tools. Vanguard, not so much: The company doesn’t offer a trading platform. So some people may be able to quit this comparison right here: Are you an active stock or options trader? Fidelity is your answer.
The tension between these two starts for those investors who are looking to compare mutual funds, fees, account minimums and investment offerings. For that, read below.
Side note: Both Vanguard and Fidelity offer robo-advisor services, but we're focusing on their self-directed brokerage accounts here. To learn more about the robo-advisors, read our reviews of Fidelity Go and Vanguard Digital Advisor.
Fidelity is best for:
Fidelity at a glance
| |
| |
| |
Account fees (annual, transfer, closing, inactivity) | |
Interest rate on uninvested cash | |
Number of no-transaction-fee mutual funds | More than 3,300 no-transaction-fee mutual funds. |
| • Stocks. • Corporate, municipal and government bonds. • Mutual funds. • ETFs. • Fractional shares. • Options. • FOREX. • Precious metals. • Bitcoin and Ethereum. |
| Fidelity.com and Active Trader Pro. Both free for all customers. |
| Available for iOS and Android; advanced features. |
| |
Customer support options (includes how easy it is to find key details on the website) | Phone, email and live chat 24/7; more than 200 local branches. |
Vanguard is best for:
Long-term or retirement investors.
Those who prefer low-cost investments.
Index fund and ETF investors.
Vanguard at a glance
| $0; however some fund minimums start at $1,000. |
| |
| |
Interest rate on uninvested cash | |
Account fees (annual, transfer, closing, inactivity) | No closing, inactivity or transfer fees.$20 annual account service fee for all brokerage accounts and IRAs. Waived for clients who sign up for statement e-delivery. |
Number of no-transaction-fee mutual funds | More than 3,400 funds from outside providers and 191 Vanguard funds charge no transaction fees. |
| • Stocks. • Bonds. • Mutual funds. • ETFs. • Options. |
| |
| Trade mutual funds, ETFs and stocks; monitor account activity and analyze performance; follow market news and research investments. |
| Average quality but free. |
Customer support options (includes how easy it is to find key details on the website) | Phone support Monday-Friday, 8 a.m.-8 p.m. Eastern; email support. |
Advertisem*nt
| | |
|---|
| | |
Fees $0 per online equity trade | | |
| | |
Promotion None no promotion available at this time | Promotion None no promotion available at this time | Promotion Get up to $700 when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money. |
| | |
FAQs
While both institutions offer robo-advisors, Vanguard's Personal Advisor Services, which is available to clients who can meet a $50,000 account minimum, offers a little more hands-on investment guidance and assistance with portfolio construction. Vanguard also has slightly lower expense ratios on its index funds.
What is the Fidelity bonus for 2024? ›
To earn the $300 bonus and Fitbit® Luxe, open any Fidelity Bank personal checking account before April 30th, 2024, and within 60 days of account opening you must: have direct deposits into your new account that total at least $1,000; enroll and use online or mobile banking (log-in to check balance, make transfer, etc. ...
What is the downside to Fidelity? ›
In most situations, you will find what you need at Fidelity. There are a few downsides. Fidelity does not offer cryptocurrency investing. The company is also missing some features found on other investment platforms, like futures trading and paper trading, where you can practice trading.
Should I choose Vanguard or Fidelity? ›
While Fidelity wins out overall, Vanguard is the best option for retirement savers. Its platform offers tools and education focused specifically on retirement planning.
Should I switch from Fidelity to Vanguard? ›
Overall, Vanguard and Fidelity are both great choices. They offer a wide range of investment options, low costs, and hands-off or active management depending on your preference. When it comes to index funds, Vanguard is hard to beat, with hundreds of low-cost options.
What are the predictions of the stock market 2024? ›
Big Money participants forecast a 12% jump in earnings per share for the S&P 500 in 2024, slightly ahead of consensus forecasts for an 11% increase.
Are index funds good for 5 years? ›
Long-run performance: It's important to track the long-term performance of the index fund (ideally at least five to ten years of performance) to see what your potential future returns might be. Each fund may track a different index or do better than another fund, and some indexes do better than others over time.
Are index funds the best for long term growth? ›
The goal is to match the index's performance as closely as possible—so by design, index funds can't outperform the market. However, it's worth noting that, historically, index funds consistently outperform actively managed mutual funds in the short term and over the long run.
What is Fidelity 5 year rule? ›
Key takeaways
Contributions can always be taken tax- and penalty-free. But Roth IRAs must meet the 5-year aging rule before withdrawals from earnings can be taken tax- and penalty-free. Failing to meet the 5-year rule can result in taxes and penalties.
Should I use Fidelity or Charles Schwab? ›
Overall Appeal. Fidelity and Schwab are both excellent choices. These investment firms offer thousands of funds. There are some nuances, such as Fidelity being better for crypto traders and Schwab being more optimal for futures traders.
The financial services firm handles more than 45 million retirement accounts total. The average 401(k) balance ended 2023 up 14% from a year earlier to $118,600, Fidelity found. The average individual retirement account balance also gained 12% year over year to $116,600 in the fourth quarter of 2023.
What is the Fidelity controversy? ›
Big Four title firm Fidelity National Financial and its subsidiary mortgage subservicer Loancare are facing a class action lawsuit alleging that they were negligent with customer data and that they breached their contract, after the firm was the victim of a cyber security attack in late-November.
What happens to my investments if Fidelity goes bust? ›
Key Takeaways
If a brokerage fails, another financial firm may agree to buy the firm's assets and accounts will be transferred to the new custodian with little interruption. The government also provides insurance, known as SIPC coverage, on up to $500,000 of securities or $250,000 of cash held at a brokerage firm.
Is it safe to have all my money at Fidelity? ›
Protecting your assets
With our Customer Protection Guarantee, we reimburse you for losses from unauthorized activity in your accounts. We also participate in asset protection programs such as FDIC and SIPC to help provide the best service possible. See our protection guarantee and account coverage.
Why do people choose Vanguard? ›
With Vanguard
Vanguard is owned by its funds, which in turn, are owned by their shareholders. With no other parties to answer to and therefore no conflicting loyalties, Vanguard makes decisions, including the decision to keep investing costs as low as possible, with clients' interests in mind.
Why do people love Vanguard? ›
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.
What is so good about Vanguard? ›
Low-cost, no frills investing. The website is fine and supports those who want a simple buy and hold approach. Their LifeStrategy funds offer ready-made investment solutions and with over 30 million mostly happy customers globally, this feels like a safe option for most.
