Vanguard review: A low-cost option for long-term investing

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Index investing, aka putting your money in index funds, got its start thanks to Vanguard.

“Jack” Bogle, founder of the brokerage, created the first index fund, which offers the ability to invest in a basket of stocks and/or bonds with low fees and minimal risk.

It may not come as a surprise then that Vanguard is known for its low-cost investing options. Account holders don’t pay commissions for trading stocks and ETFs, and they avoid paying transaction fees for over 3,000 mutual funds. Investors can get advice through the robo-advisor service Vanguard Digital Advisor®, which automatically manages your investment portfolio.

Below, Select reviews Vanguard’s offerings to give you the details on the investment options, features and fees so you can decide if it’s right for your needs.

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Vanguard review

Vanguard

Information about Vanguard has been collected independently by Select and has not been reviewed or provided by Vanguard prior to publication.

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum to open a Vanguard account, but minimum $1,000 deposit to invest in many retirement funds; robo-advisor Vanguard Digital Advisor® requires minimum $3,000 to enroll

  • Fees

    Fees may vary depending on the investment vehicle selected. Zero commission fees for stock and ETF trades; zero transaction fees for over 3,000 mutual funds; $20 annual service fee for IRAs and brokerage accounts unless you opt into paperless statements; robo-advisor Vanguard Digital Advisor® charges up to 0.20% in advisory fees (after 90 days)

  • Bonus

  • Investment vehicles

  • Investment options

    Stocks, bonds, mutual funds, CDs, ETFs and options

  • Educational resources

    Retirement planning tools

Pros

  • No commission fees for stock and ETF trades
  • No transaction fees for over 3,000 mutual funds
  • One of the largest ETF and mutual fund offerings around
  • Robo-advisor Vanguard Digital Advisor® available for 90-day free trial with no advisory fees
  • Vanguard 529 Plan helps you save for college early on
  • Excellent customer service
  • Offers retirement planning tools
  • Customers get access to GetHuman, a website dedicated to human-to-human customer service, with features that include talking to a Vanguard rep, notice of the current hold time, reminders to call when call center opens, as well as pro tips and talking points for customers
  • Vanguard Personal Advisor Services® available for personalized support

Cons

  • Many retirement funds require $1,000 to invest
  • $20 annual service fee for IRAs and brokerage accounts (investors can waive this fee by opting into paperless statements)
  • Robo-advisor Vanguard Digital Advisor® requires minimum $3,000 to enroll and charges up to 0.20% in advisory fees (after 90 days)
  • Basic trading platform only
  • No robust research and data tools

Investment options

Features

Vanguard is a solid choice for its commission-free stock and ETF trades, as well as for its thousands of mutual funds with no transaction fees.

Vanguard doesn’t have many tools for those who are more active traders or interested in short-term trading, therefore leaving it a stable option aimed at investors who want to buy and hold funds, stocks or bonds for the long term. A platform like Robinhood may be better for those looking to day trade or purchase options (which charges no fees for options trading).

User reviews make it seem that it’s easier to manage your Vanguard investments on the go if you’re an Apple user. The Vanguard app is available to download for free in both the App Store (for iOS), where it has 4.7/5 stars, and on Google Play (for Android), where it has a low 1.9/5 stars at the time this article was written.‎

Fees

Minimum deposit and balance requirements vary depending on the Vanguard account you select.

While there is no minimum to open a Vanguard account, investors must make a minimum $1,000 deposit to invest in many retirement funds. Zero-commission trades can be made with stocks and ETFs, and there are no transaction fees for over 3,000 mutual funds. Expense ratios for the ETFs and mutual funds are some of the lowest around, with an average of 0.10%, much lower than the industry average.

The robo-advisor service Vanguard Digital Advisor requires a minimum deposit of $3,000 to enroll. There’s also up to a 0.20% annual advisory fee (although their is a fee waiver for the first 90 days after account opening) to use the automated investing platform.

And, lastly, though there is a $20 annual service fee for Vanguard IRAs and brokerage accounts, this can be easily waived if you opt into paperless statements.

Bottom line

Vanguard stands out as a rather low-cost option for those looking for a brokerage account. It has a large selection of ETFs and mutual funds which appeals to long-term investors who want to see their money grow.

If you’re interested in the robo-advisor element of Vanguard, you may want to first check out alternatives such as SoFi Invest, whose automated investing platform has zero account management fees and no minimum requirements. It offers a broad range of low-cost ETFs and will automatically rebalance your portfolio on a quarterly basis. Read our full SoFi Invest review.

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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.