Vanguard vs. Fidelity: Which Is Best?

By Mike Obel | AUG 30, 2023

When it comes to online brokerages, it’s hard to think of two bigger names than Vanguard and Fidelity. Both are giants in the financial field - Fidelity based in Boston and Vanguard based in Malvern, Pennsylvania. Fidelity and Vanguard both offer a variety of services, including brokerage accounts, retirement accounts and many other financial tools for both businesses and individuals. This guide will break down how these two companies stack up against one another when it comes to individual brokerage accounts so you can decide which one might work best for you. If you want the help of a financial advisor to plan your financial future, consider finding one with SmartAsset’s free financial advisor matching tool.

Vanguard vs. Fidelity: The Basics

As noted above, both Vanguard and Fidelity are among the largest and most recognizable names in financial services. Fidelity was founded in 1946 by Edward Johnson, while Vanguard has been around since John Bogle created it in 1975.

While both offer a variety of products, Fidelity offers a more full-service experience for brokerage clients, with easy access to stocks, bonds, options, mutual funds, exchange-traded funds (ETFs) and more. Vanguard does offer access to individual stocks and bonds, but the focus is on buying into the firm’s in-house suite of mutual funds and ETFs. Vanguard is one of the innovators of index funds, which track a market index rather than having a fund manager make investing decisions. These have much lower costs and are generally low-risk, making it a frequent choice for less experienced investors who want simple and reliable returns.

Vanguard vs. Fidelity: Fees

For investors looking to make the most of their money, keeping fees low is extremely important. You could make the best investing decisions in the world and still end up with less money than you aimed for if a ton of your gains are being eaten up by fees. Here’s a breakdown of the fee schedules at Fidelity and Vanguard:

Vanguard and Fidelity Fees
Fee Type	Vanguard	Fidelity
Investment Fees	Stocks & ETFs: $0 Mutual funds: $0 ($25 for transaction fee mutual funds) Options: $0 commission and $1 contract fee Secondary market bonds: $25 broker-assisted fee CDs/U.S. Treasury securities: $0 Mortgage-backed securities: $35	Stocks & ETFs: $0 Mutual funds: $0 ($49.95 for online transaction fee mutual funds) Options: $0 commission and $0.65 contract fee New issue bonds: $0 Secondary market bonds: $1 and $19.95 broker-assisted fee CDs/U.S. Treasury securities: $0
Account Fees	Account fee: $20 a year (waivable) Wire transfer fee: $10 Foreign securities transactions: $50	Account fee: $0 Domestic wire transfer fee: $0 Foreign exchange wire transfer fee: $0 Foreign securities transactions: $0-$50

Investment fees are generally low at both firms. Neither charges brokerage fees for buying stocks or ETFs, and most mutual funds are also free of charge to invest in. Keep in mind each mutual fund you buy shares in will still have an expense ratio, but that is determined by the fund itself, and not directly related to the brokerage account.

For options traders, Fidelity charges $0.65 for contracts, while Vanguard charges $1. Neither charges an options commission fee.

Vanguard has a $20 annual account fee, though it is waivable if you hold at least $10,000 in Vanguard funds, hold at least $50,000 in qualifying Vanguard assets, elect to get e-statements or have a trust or organization account with a registered EIN.

Vanguard vs. Fidelity: Features and Services

Low-cost mutual funds and ETFs are available at both firms. Vanguard has around 3,000 no-transaction-fee mutual funds and 1,800 ETFs without commissions, while Fidelity has a total of more than 3,000 no-transaction-fee mutual funds.

Vanguard, though, is able to offer the lowest expense ratio not just of these two firms, but of any firm on the market. This is partially because Vanguard is basically owned by its funds, which are in turn owned by the investors who hold the funds. That said, other firms like Fidelity compete with Vanguard’s low fees. In turn, you may find some Fidelity mutual funds with lower fees than similar options at Vanguard. On the whole, though, expense ratios are still lower at Vanguard.

Robo-advisors are also available at both firms. Vanguard has two hybrid robo-advisors known as Vanguard Personal Advisor Services and Vanguard Digital Advisor. These each use algorithms to help build portfolios for clients according to a personally built asset allocation. Human advisors are also available. Personal Advisor Services has a $500,000 account minimum and a 0.30% annual management fee, along with on-staff human advisors. Digital Advisor is simpler and cheaper, with a $3,000 minimum and 0.20% annual management fee.

Fidelity’s robo-advisor is called Fidelity Go, and is probably better for investors who can direct their own investments to some degree. That said, if you’re near a Fidelity brick-and-mortar center, users of Fidelity Go are able to go in and get advice there. There is also a call center for person-to-person advice. Fees depend on how much money you have in your account.

Vanguard vs. Fidelity: Mobile App and Online Experience

Both of these firms have a strong presence in the online and mobile spaces. Each has an app you can use to make trades and manage your account. Both companies’ apps also score well on the Apple App Store, though Vanguard’s rating is quite far below Fidelity on the Google Play Store.

Vanguard’s platforms are fairly low-frill and basic, which makes sense given the way the company is set up. That said, you can use it to make all the transactions you’ll need. But if you’re a more savvy investor looking for more tools, Vanguard might not have everything you want.

Fidelity, on the other hand, has a more complex set of tools on its platforms and apps. Investors with some experience who want to do more complicated analysis of their strategies may find this useful, but it could be a bit complex for beginners.

Vanguard vs. Fidelity: Who Should Use Them?

Honestly, you can’t go wrong with either Vanguard or Fidelity. Both are respected, established firms with well-developed platforms offering a variety of investment options. Their fees are fairly similar, and neither is going to break the bank with too many charges.

That said, Vanguard is likely a better option for beginners. The platforms are very simple, and Vanguard’s suite of low-cost index funds are great for investors who want simple, safe investments.

Fidelity, on the other hand, is a good choice if you have a bit more experience. There are a few more bells and whistles that investors with some know-how can take advantage of. Investment analysis is a major strength of Fidelity’s offerings.

Investing Tips

If you want even more help with investing, consider working with a professional. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors in your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
The basis of any financial plan is knowing how much you should be investing in different products. Use SmartAsset’s asset allocation calculator to get a rough idea of what your portfolio should look like.

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