Charles Schwab and Vanguard, both are full-service brokers 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’s multiple trading platforms, full banking capabilities and plenty of tools seem to support 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
| Particulars | Vanguard | Schwab |
| Broker | Full service | Full Service |
| Trading/ Investing Assets | Stocks, ETFs, mutual funds, bonds, options, CDs, mortgage-backed securities, and UITs | Stocks & Mutual funds, ETFs, Options, Futures, Bonds, CDs, Money market fund, and Global Investing |
| Baking Facility | N.A. | Charles Schwab Bank |
| Account Types | Both taxable and traditional IRA and Roth IRA, trust and 529 investment account | Both taxable and traditional Broking, IRAs, global trading, trust, estate, educational, organization accounts |
| Fees/ Commission | Vanguard | Schwab |
| 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 trades | Up to $50 depending on the assets and account type | $25 |
| Margin Amount | Vanguard Margin Rates | Schwab Margin Rates |
| Up to $19,000 | 8.50% | 8.325% |
| $20,000 to $49,999 | 8.00% | 8.325% up to $24,999.99 and 7.825% from $25,000 to $49,999.99 |
| $50,000 to $99,999 | 7.50% | 6.875% |
| $100,000 to $249,999 | 7.00% | 6.825% |
| $250,000 to $499,999 | 6.50% | 6.575% |
| $500,000 to $999,999 | 5.25% | Contact Schwab for the rates |
| $ 1 million or more | 4.75% | Contact Schwab for the rates |
| Account Fees | Vanguard | Schwab |
| Wire Transfer fee | $10 | $0 |
| Trading Platforms | Vanguard Web Platform Mobile Apps | StreetSmart Edge desktop software trading Mobile trading Web-based trading |
| Advisory services | Yes 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 Support | Phone 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.
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Charles Schwab Review
Charles Schwab is a Fortune Top 50 world’s most admired company with $6.69 trillion global clients assets under management.
The brokerage is based in San Francisco, California and is trusted by 29.6 million clients.
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 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 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
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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 Type | Minimums |
| Schwab Intelligent Portfolios | $5,000 |
| Schwab Intelligent Portfolios Premium | $25,000 |
| Schwab Managed Portfolios | $25,000 |
| Schwab Managed Account – Equity | $100,000 |
| Schwab Managed Account – Fixed Income | $250,000 |
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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 Type | Fee for Online Trades | Fee for Broker Assisted Trades |
| Stocks | $0 | $25 |
| ETFs | $0 | $25 |
| Schwab mutual funds | $0 | $25 |
| Other mutual funds | Up to $49.95 per purchase | Up 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 |
| CDs | Selling concession is included in the offering price | Selling 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 Amount | Margin fee/ rate |
| $0 to $24,999.99 | 8.325% |
| $25,000 to $49,999.99 | 7.825% |
| $50,000 to $99,999.99 | 6.875% |
| $100,000 to $249,999.99 | 6.825% |
| $250,000 to $499,999.99 | 6.575% |
| $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 Type | Cost & Fees |
| Schwab Intelligent Portfolios | No advisory fees |
| Schwab Intelligent Portfolios Premium | One-time planning fee of $300,and $30 per month advisory fee |
| Dedicated Financial Advice | Annual fees start at 0.80% (Fee rates decrease at higher asset levels) |
| Schwab Managed Portfolios | Annual fees start at 0.90% (Fee rates decrease at higher asset levels) |
| Schwab Managed Account – Equity | Annual fees start at 1.00% (Fee rates decrease at higher asset levels) |
| Schwab Managed Account – Fixed Income | Annual 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 8.325% 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.
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Vanguard 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 $6.2 trillion global client assets spanning across 170 countries for more than 30 million investors.
Vanguard excelled in 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’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:
| Particulars | Minimum 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 bonds | New Issues: $10,000 Secondary market: $1,000 |
| US Treasury securities | New Issues: $10,000 Secondary market: $1,000 |
| Municipal Bonds | Secondary 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 Types | Portfolio value |
| Standard | Less 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:
| Particulars | Fees & Charges |
| Vanguard ETFs | Online – $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 funds | Online – $0 By phone – up to $25 per trade depending on your account |
| Transaction-fee (TF) mutual funds | Online – up to $20 per trade By phone – up to $50 per trade Fees will depend on your account type |
| Stocks | Online – $0 By phone – up to $25 per trade depending on your account |
| Option Trades | $0 |
| Option contract fees | $1 per contract |
| CDs & corporate bonds | New Issues: $0 Secondary market: $1 per $1,000 face value ($250 maximum) |
| US Treasury Securities | New Issues: $0 Secondary market: $0 |
| Municipal bonds | New Issues: N.A. Secondary market: $1 per $1,000 face value ($250 maximum) |
| Mortgage-backed securities | New 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 Amount | Margin fee/ rate |
| Up to $19,000 | 8.50% |
| $20,000 to $49,999 | 8.00% |
| $50,000 to $99,999 | 7.50% |
| $100,000 to $249,999 | 7.00% |
| $250,000 to $499,999 | 6.50% |
| $500,000 to $999,999 | 5.25% |
| $ 1 million or more | 4.75% |
Vanguard Advisory fee
The advisory fees depend on the portfolio value and charged annually, the details are below:
| Portfolio Value | Advisory Fee |
| below $5 million | 0.30% |
| $5 million to below $10 million | 0.20% |
| $10 million to below $25 million | 0.10% |
| $25 million and above | 0.05% |
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
| Particulars | Vanguard | Schwab |
| 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
| Particulars | Vanguard | Schwab |
| Broker | Full service | Full Service |
| Trading/ Investing Assets | Stocks, ETFs, mutual funds, bonds, options, CDs, mortgage-backed securities, and UITs | Stocks & Mutual funds, ETFs, Options, Futures, Bonds, CDs, Money market fund, Global Investing |
| Based out of | Pennsylvania | San Francisco, California |
| Baking Facility | N.A. | Charles Schwab Bank |
| Account Types | Both taxable and traditional IRA and Roth IRA, trust and 529 investment account | Both taxable and traditional Broking, IRAs, global trading, trust, estate, educational, organization accounts |
| Fees/ Commission | Vanguard | Schwab |
| 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 Options | N.A. | $1.50 per contract, per side |
| Phone Trades/ Broker assisted trades | Up to $50 depending on the assets and account type | $25 |
| Margin Amount | Vanguard Margin Rates | Schwab Margin Rates |
| Up to $19,000 | 8.50% | 8.325% |
| $20,000 to $49,999 | 8.00% | 8.325% up to $24,999.99 and 7.825% from $25,000 to $49,999.99 |
| $50,000 to $99,999 | 7.50% | 6.875% |
| $100,000 to $249,999 | 7.00% | 6.825% |
| $250,000 to $499,999 | 6.50% | 6.575% |
| $500,000 to $999,999 | 5.25% | Contact Schwab for the rates |
| $ 1 million or more | 4.75% | Contact Schwab for the rates |
| Account Fees | Vanguard | Schwab |
| Wire Transfer fee | $10 | $0 |
| Trading Platforms | Vanguard Web Platform Mobile Apps | StreetSmart Edge desktop software trading Mobile trading Web-based trading |
| Advisory services | Yes 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 Offerings | In house reports and expert analysis on a host of investment topics | In house reports and expert analysis on a host of investment topics |
| Customer Support | Phone contact Forms | Phone calls Chat Visit 300 local branches |
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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.
