Charles Schwab vs Vanguard: Choose The Best For You

Schwab vs vanguard

Charles Schwab and Vanguard, both are full-service brokerages offering discount brokerages and a wide range of similar investment products. 

For example, Schwan and Vanguard both have a long list of their own and external mutual funds. You get in-house research and several advisory services.  

However, Charles Schwab is also a bank and when you look closer you will find that there is a significant difference in investment approach. 

Vanguard is geared towards long-term strategies & plans suited for passive investment style. Whereas, Schwab multiple trading platforms, full banking capabilities and plenty of tools seem supporting active, self-directed and advisory based investment style.

If you find yourself stuck in picking one of them then the article will help you compare both the brokerages side by side. 

In case if you are in a hurry, the below is the brief side by side comparison of Vanguard vs Charles Schwab

Brief Comparison Schwab vs Vanguard

ParticularsVanguardSchwab
BrokerFull serviceFull Service
Trading/ Investing AssetsStocks, ETFs, mutual funds,  bonds, options, CDs, mortgage-backed securities, and UITsStocks & Mutual funds, ETFs, Options, Futures, Bonds, CDs, Money market fund, and Global Investing
Baking FacilityN.A.Charles Schwab Bank
Account TypesBoth taxable and traditional IRA and Roth IRA, trust and 529 investment accountBoth taxable and traditional Broking, IRAs, global trading, trust, estate, educational, organization accounts
Fees/ Commission VanguardSchwab
Brokerage Account Minimum$0$0
On Stock $0$0
On ETF$0$0
Option trades$0$0
Own mutual fund$0$0
Option contract fees$1 per contract$0.65 per contract
Transaction-fee (TF) mutual funds/ other mutual funds$20 per trade Up to $49.95 per purchase
Futures N.A.$1.50 per contract, per side
Phone Trades/ Broker assisted tradesUp to $50 depending on the assets and account type$25
Margin AmountVanguard Margin RatesSchwab Margin Rates
Up to $19,9999.00%9.325%
$20,000 to $49,9998.50%9.325% up to $24,999.99 and 
8.825% from $25,000 to $49,999.99
$50,000 to $99,9998.00%7.875%
$100,000 to $249,9997.50%7.825%
$250,000 to $499,9997.00%7.575%
$500,000 to $999,9995.75%Contact Schwab for the rates
$ 1 million or more5.25%Contact Schwab for the rates
Account FeesVanguardSchwab
Wire Transfer fee$10$25
Trading PlatformsVanguard Web Platform 
Mobile Apps
StreetSmart Edge desktop software trading 
Mobile trading
Web-based trading
Advisory servicesYes
Fee up to 0.30% depending on the portfolio value
Yes, Minimums required $5,000
Fee- Schwab Intelligent Portfolios Premium – One-time fee of $300 and $30/ month.
Other managed account – up to 1%
Customer SupportPhone contact
Forms
Phone calls
Chat
Visit 300 local branches

If you still need more information to make up your mind then you can deep dive into the full review and detailed side-by-side comparison. 

Charles Schwab Review 

Schwab Brokerage Review

Charles Schwab is a Fortune Top 50 world’s most admired company with $4.05 trillion global clients assets under management. 

The brokerage is based in San Francisco, California and is trusted by 12.4 million active traders. 

The assets that one can trade at Schwab include:

  • Stocks & Mutual funds
  • ETFs
  • Options
  • Futures
  • Bonds, CDs and other fixed-income instruments
  • Money market fund
  • Global Investing

If you are a self-directed trader looking for cost savings then Schwab is a better option with discount online banking and no commission online trading. 

Additionally, one has the option to open a no-fee Robo-advisor Schwab Intelligent Portfolio account.

Charles Schwab Investment Support 

At Schwab, you have access to a low cost investing and banking world. 

Schwab offers an excellent checking and savings account worth consideration. For example, if you travel internationally, then Schwab refunds your ATM fees. 

You get a checking account linked to your brokerage account. The other banking solution that makes your life simple is:

  • Free online & mobile bill pay
  • Unlimited ATM fee rebates worldwide
  • Mortgage rates discounts
  • No application or set up fee for pledged asset lines

Charles Schwab Trading Platforms

Using Schwab’s platforms you can trade in over 30 international markets through Schwab’s Global Services Desk.

Schwab’s desktop trading platforms

Schwab offers convenient trading options to choose from, namely Web trading, Trading software (desktop-based) and Mobile trading. 

The trading software StreetSmart Edge requires 15+ Mbps internet speed and can be downloaded to your desktop, or you can run it from the cloud if you like. 

StreetSmart Edge streams real-time data and news and comes with stock & ETF screeners to find potential trade opportunities.  

Schwab mobile trading app

Schwab mobile trading app is compatible with iOS and Android OS. The app lets you securely access accounts, transfer funds, and manage portfolios.

You can place orders, trade stocks, ETFs, mutual funds and options with the help of interactive charts and real-time market prices. 

The brokerage and trading account can be opened online. You will require your:

  • Social security number
  • Driving license
  • Employers’ name and address
  • Statement of information for any assets or cash that you would like to transfer.

Schwab offers the following types of account:

  • Brokerage & Trading
  • Retirement and IRAs
  • Global Trading
  • Trust, Estate and Charitable
  • Education and Custodial
  • Organizational Account
  • Personal Choice Retirement Account

You might also like to readBarclays savings account review

Charles Schwab Minimum Investment Requirement

Charles Schwab has no-minimum account requirements.

However, there are minimums required at automated investing that comes with a cash sweep facility and advisory services (Robo & from finance professional)

Account TypeMinimums
Schwab Intelligent Portfolios$5,000
Schwab Intelligent Portfolios Premium$25,000
Dedicated Financial Advice$500,000
Schwab Managed Portfolios$25,000
Schwab Managed Account – Equity$100,000
Schwab Managed Account – Fixed Income$250,000

Charles Schwab Fee & Charges 

There are no fees to open or maintain your account. However, if you are going to use margin then you need to fund your account with $2,000 cash deposit or equivalent securities.

The fees and commissions at Schwab are under:

Asset TypeFee for Online TradesFee for Broker Assisted Trades
Stocks$0$25
ETFs$0$25
Schwab mutual funds$0$25
Other mutual fundsUp to $49.95 per purchaseUp to $49.95 per purchase +$25
Options Trade$0$25
Option contract fees$0.65 per contract$0.65 per contract
Futures $1.50 per contract, per side$1.50 per contract, per side
Futures Options$1.50 per contract, per side$1.50 per contract, per side
CDsSelling concession is included in the offering priceSelling concession is included in the offering price
Treasury Securities Auction & Secondary Trades$0$25
Other secondary trades for CDs, corporate, municipal and zero-coupon bonds$1 per bond,
Minimum – $10
Maximum – $250 
$1 per bond, + $25
Minimum – $10
Maximum – $250 

Charles Schwab Margin Details

The margin amount offered and the interest rate details are as under

Margin AmountMargin fee/ rate
$0 to $24,999.999.325%
$25,000 to $49,999.998.825%
$50,000 to $99,999.997.875%
$100,000 to $249,999.997.825%
$250,000 to $499,999.997.575%
$500K and above Contact Schwab for the rates

Charles Schwab Advisory Charges 

Advisory is provided through Schwab Intelligent Portfolio Premium Service which includes Robo advice and professional guidance by a Certified Financial Planner.

Account TypeCost & Fees
Schwab Intelligent PortfoliosNo advisory fees
Schwab Intelligent Portfolios PremiumOne-time planning fee of $300,and $30 per month advisory fee 
Dedicated Financial AdviceAnnual fees start at 0.80% (Fee rates decrease at higher asset levels)
Schwab Managed PortfoliosAnnual fees start at 0.90% (Fee rates decrease at higher asset levels)
Schwab Managed Account – EquityAnnual fees start at 1.00%  (Fee rates decrease at higher asset levels)
Schwab Managed Account – Fixed IncomeAnnual fees start at 0.65% (Fee rates decrease at higher asset levels)

What I Liked About Charles Schwab

  • No international ATM fee, free online & mobile bill pay
  • Web, software (StreetSmart Edge) & mobile trading
  • $0 online trading fees, commission-free ETFs & mutual funds
  • 24/7 customer support, 300 local branches

What I Didn’t Like About Charles Schwab

  • Prior approval needed to trade options
  • $5,000 minimums for Robo-advisory 
  • Stock borrow  fees for short selling
  • High 9.325% rate for $24,999.99 margin amount 

Charles Schwab Best For 

Schwab is best for beginners to advanced investors looking for banking and investing solutions at a single location. 

Check outDifference between savings account vs Checking account

Vanguard Review

Vanguard Brokerage Review

Founded in 1975, Vanguard offers services & advisory for investment, retirement planning and plans for education and emergency funds. 

You get to trade a large selection of mutual funds, ETFs, Stocks, Options, CDs, and bonds. The brokerage manages $5.6 trillion global client assets spanning across 170 countries for more than 30 million investors. 

Vanguard pioneered index fund investments and is still geared towards passive investment style ideal for long-term investors.

Vanguard USP is:

  • Full range of long-term investment services
  • $0 commission for online trades
  • Approx 1800 commission-free ETFs 
  • Advisory & research services

Vanguard Investment Support 

Vanguard does not offer any banking services, a differentiator from Schwab. You need to get your bank account linked to do electronic bank transfers. 

Vanguard Trading Platforms

Vanguard Mobile trading app

Vanguard’s online presence is bare-basics. 

The brokerage offers two trading platforms, namely the Vanguard app and a Web trading platform. The tools are limited to perform full technical studies and the quotes are delayed. 

Vanguard offers a stock screener and a separate ETF screener but you cannot trade complex options strategies on Vanguard.

Vanguard Minimum Investment Requirement

Account minimum for brokerage account $0. 

However, there are minimum investment requirements as under:

ParticularsMinimum investment
Target Retirement Funds and STAR Fund$1,000
Most index mutual funds$3,000 for Admiral Shares
(Investor Shares not available)
Most actively managed mutual funds$50,000 for Admiral Shares
$3,000 for Investor Shares
Most sector-specific index mutual funds$100,000 for Admiral Shares
(Investor Shares not available.)
CDs & corporate bondsNew Issues: $10,000
Secondary market: $1,000
US Treasury securitiesNew Issues: $10,000
Secondary market: $1,000
Municipal BondsSecondary market: $5,000; also subject to dealer minimums.

Vanguard Account Types

Accounts at Vanguard are based on portfolio values. The higher portfolio/ premium accounts have lower fees and commissions. 

Account TypesPortfolio value
StandardLess than $50,000
Voyager Services$50,000 to $500,000
Voyager Select Services$500,000 to $1 million
Flagship Services$1 million to $5 million
Flagship Select Services$5 million or more

Vanguard Fee & Charges 

Investing in Vanguard is costly over the phone but commission-free online. 

The fee details are under:

ParticularsFees & Charges
Vanguard ETFsOnline – $0
By phone – $0
ETFs from other companies Online – $0
By phone – up to $25 per trade depending on your account
Vanguard Mutual Funds Online – $0
By phone – $0
No-transaction-fee (NTF) mutual fundsOnline – $0
By phone – up to $25 per trade depending on your account
Transaction-fee (TF) mutual fundsOnline – up to $20 per trade
By phone – up to $50 per trade
Fees will depend on your account type
StocksOnline – $0
By phone – up to $25 per trade depending on your account
Option Trades$0
Option contract fees$1 per contract
CDs & corporate bondsNew Issues: $0
Secondary market: $1 per $1,000 face value ($250 maximum)
US Treasury SecuritiesNew Issues: $0
Secondary market: $0
Municipal bondsNew Issues: N.A.
Secondary market: $1 per $1,000 face value ($250 maximum)
Mortgage-backed securitiesNew Issues: $35 per trade
Secondary market: $35 per trade
Unit Investment Trusts (UITs)New Issues: N.A.
Secondary market: $35 per trade
Account service fees$20 annually
Foreign security transaction$50
Wire transfer$10

Account fee of $20 per year is relaxed for:

  • Voyager, Voyager Select, Flagship, and Flagship Select accounts
  • An account that has at least $10,000 in Vanguard ETFs and mutual funds.
  • Investors opted for e-delivery of statements

Vanguard Margin Details

The margin amount offered and the interest rate details are as under;

Margin AmountMargin fee/ rate
Up to $19,9999.00%
$20,000 to $49,9998.50%
$50,000 to $99,9998.00%
$100,000 to $249,9997.50%
$250,000 to $499,9997.00%
$500,000 to $999,9995.75%
$ 1 million or more5.25%

Vanguard Advisory fee

The advisory fees depend on the portfolio value and charged annually, the details are below:

Portfolio ValueAdvisory Fee
below $5 million0.30%
$5 million to below $10 million0.20%
$10 million to below $25 million0.10%
$25 million and above0.05%

What I Liked About Vanguard

  • Wide range of investing options & advisory services
  • Approx 1800 commission-free ETFs 
  • $0 commission fees for online trades
  • Mobile check deposit
  • A host of resources for long term planning

What I Didn’t Like About Vanguard

  • Outdated web platform with no streaming quotes
  • Margin investing needs prior approval
  • Need to maintain a certain amount of equity at all times
  • Higher trading fee for accounts valued less than $50,000

Vanguard Best For 

Vanguard services are best for passive investing style and long-term investors looking for mutual funds & ETFs will benefit the most.

Common Feature Between Schwab and Vanguard

ParticularsVanguardSchwab
Brokerage Account Minimum$0$0
Online Trading Fees
On Stock $0$0
On ETF$0$0
Option trades$0$0
Own mutual fund$0$0

Difference Between Schwab Vs Vanguard

ParticularsVanguardSchwab
BrokerFull serviceFull Service
Trading/ Investing AssetsStocks, ETFs, mutual funds,  bonds, options, CDs, mortgage-backed securities, and UITsStocks & Mutual funds, ETFs, Options, Futures, Bonds, CDs, Money market fund, Global Investing
Based out of PennsylvaniaSan Francisco, California
Baking FacilityN.A.Charles Schwab Bank
Account TypesBoth taxable and traditional IRA and Roth IRA, trust and 529 investment accountBoth taxable and traditional Broking, IRAs, global trading, trust, estate, educational, organization accounts
Fees/ Commission VanguardSchwab
Option contract fees$1 per contract$0.65 per contract
Transaction-fee (TF) mutual funds/ other mutual funds$20 per trade Up to $49.95 per purchase
Futures N.A.$1.50 per contract, per side
Futures OptionsN.A.$1.50 per contract, per side
Phone Trades/ Broker assisted tradesUp to $50 depending on the assets and account type$25
Margin AmountVanguard Margin RatesSchwab Margin Rates
Up to $19,9999.00%9.325%
$20,000 to $49,9998.50%9.325% up to $24,999.99 and 
8.825% from $25,000 to $49,999.99
$50,000 to $99,9998.00%7.875%
$100,000 to $249,9997.50%7.825%
$250,000 to $499,9997.00%7.575%
$500,000 to $999,9995.75%Contact Schwab for the rates
$ 1 million or more5.25%Contact Schwab for the rates
Account FeesVanguardSchwab
Wire Transfer fee$10$25
Trading PlatformsVanguard Web Platform
Mobile Apps
StreetSmart Edge desktop software trading 
Mobile trading
Web-based trading
Advisory servicesYes
Fee up to 0.30% depending on the portfolio value
Yes, Minimums required $5,000
Fee- Schwab Intelligent Portfolios Premium – One-time fee of $300 and $30/ month.

Other managed account – up to 1%
Research OfferingsIn house reports and expert analysis on a host of investment topicsIn house reports and expert analysis on a host of investment topics
Customer SupportPhone contact
Forms
Phone calls
Chat
Visit 300 local branches

Why You Might Prefer Charles Schwab

Charles Schwab combines the benefits of both brokerage and banking services. You can have debit cards with international free transaction charges.

Charles Schwab scores better when it comes to online trading platforms, banking facilities, customer reach, and support. 

Schwab is more suited for a self-directed, holistic investment destination for active investors. Their brokerages are better for option trades and advisory services.

Why You Might Prefer Vanguard

Whereas, Vanguard works on a passive, long term investment ideology based on advisory services. 

Self-directed traders may find their trading platforms a bit outdated. However, you can benefit from lower TF (Transaction-fee) mutual fund commission and margin rates help you save on costs. 

You can pick Vanguard if you do a little trading and are more interested in building portfolios on mutual funds and ETFs. 

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