Robinhood vs Vanguard: Which is Best For You?

vanguard vs robinhood

Vanguard and Robinhood are familiar names in the brokerage industry. If you are looking for a comparison between the two, then you probably need to check your investment needs. 

That is because both the brokerages are on the extremes and follow a different investment logic. Vanguard is focused on the long-term and index-based passive investment approach. That is why you will find advisory services & legacy platforms with Vanguard.

Whereas, Robinhood is for self-directed investors requiring minimal support and fast platforms.  

If you want a detailed comparison, then this article offers a side by side comparison of both the brokers. 

Brief Comparison of Robinhood vs Vanguard

ParticularsVanguardRobinhood
BrokerFull serviceLimited offerings
Trading/ Investing AssetsStocks, ETFs, mutual funds,  bonds, options, CDs, mortgage-backed securities and UITsStocks, ETFs, options, cryptocurrencies and Fractional shares
Account TypesBoth taxable and traditional IRA and Roth IRA, trust and 529 investment accountTaxable Accounts
Fees/ Commission VanguardRobinhood
Brokerage Account Minimum$0$0
On Stock $0$0
On ETF$0$0
Option trades$0$0
Option contract fees$1 per contract$0
Transaction-fee (TF) mutual funds$20 per trade N.A
Phone TradesUp to $50 depending on the assets and account typeN.A
Margin AmountVanguard Margin RatesRobinhood Margin Rates
Up to $19,9999.00%5.00%
$20,000 to $49,9998.50%5.00%
$50,000 to $99,9998.00%5.00%
$100,000 to $249,9997.50%5.00%
$250,000 to $499,9997.00%5.00%
$500,000 to $999,9995.75%5.00%
$ 1 million or more5.25%5.00%
Account FeesVanguardRobinhood
International Wire fee$10$50
Domestic Wire fee$10$25
Trading PlatformsVanguard Web Platform 
Mobile Apps
Mobile trading
Web-based trading
Customer SupportPhone contact
Forms
e-mail

Check outCharles Schwab vs Vanguard

Robinhood Review

Robinhood Brokerage house

Unlike Vanguard, Robinhood has a full suite of cryptos to trade like Bitcoin, Ethereum and Litecoin.  The crypto is available to traders in 46 states and Washington DC.  

Trades on the Robinhood platform are commission-free trading across products.

However, there are trade restrictions on accounts valued less than $25,000. You are limited to 4 trades in 5 days in case you have a lower balance.  

Additionally, the crypto trades are collared up to 1% for buys, and 5% for sells. 

The USP of Robinhood is

  • Commission-free trading
  • Mobile trading 
  • Availability of Crypto products
  • Trading in fractional shares

Investment Support 

Robinhood offers a cash management service along with a brokerage account that yields 1.80% APY. 

Additionally, you get:

  • A Robinhood debit card by Sutton Bank
  • An ACH account number and routing number
  • Lost and stolen replacement cards

Trading platform

Robinhood mobile app

Robinhood started web trading lately. Their core trading platform is a mobile-based Robinhood app. The app is compatible with iOS and Android OS. 

Robinhood offers three account types:

Account TypesParticulars
Robinhood InstantInstant is the very first account that you get when you sign up.
Access to Instant deposit (up to $1000)
Extended trading hours 
Robinhood GoldJust like Instant account but with
More buying power Larger instant deposits
Research reports
Access to margins
Charged at $5 per month
Need to have $2000 account balance to use margins
Robinhood Cash Basic account when you can trade extended hours.
But do not have access to instant deposits or instant settlements

One can downgrade from Gold account to Robinhood Instant or Cash account anytime if they feel so. 

Minimum Investment 

The best part is that you can trade the full amount in your brokerage account. Robinhood does not require account minimums.   

Fee & Charges 

Investing with Robinhood is commission-free, the fee details are under:

ParticularsFees & Charges
Stock and Option Trades$0
Option contract fees$0
ETF$0
Crypto trades$0

Robinhood offers margin only on the Gold account. In order to use the margin, you need to have at least $2000 in your brokerage account. 

The margin and other details related to Gold account are under;

Margin AmountMargin fee/ rate
Price for 30 days Includes $1000 of margin$5 per month
Margin over $10005.00% interest rate

The $1000 margin comes at no additional cost for 30 days, you only need to pay $5 for the Gold account. In case, if you use margin above $1000, then the excess margin is charged at 5%. 

Robinhood does not disclose the upper margin amount available. 

What I Liked About Robinhood

  • Commission-free trading across available products
  • Lets you invest in Crypto & Fractional shares 
  • Cash management services
  • Fast digital account opening

What I Didn’t Like About Robinhood

  • No mutual funds and futures 
  • Only email support
  • $2000 balance for using margin
  • 4-day trades for account balance less than $25,000

Best For 

Robinhood is best for self-directed individuals who need minimal resources (like research, advisory & support) or managed services.  

Vanguard Review 

Vanguard Brokerage house

Vanguard is one of the largest investment companies managing $5.6 trillion global assets. The company is based out of Pennsylvania and caters to investment requirements of more than 30 million investors spread across 170 countries. 

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

However, one can find a full suite of investment products and services like a large selection of mutual funds, ETFs, Stocks, Options, CDs and bonds. The services are offered through Vanguard Brokerage Services. 

The host of advisory services at Vanguard includes investment advisory, retirement planning and investment plans for education and emergency funds. 

Vanguard USP is:

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

Investment Support 

Vanguard does not offer any banking services. You need to get your bank account linked to electronic bank transfers. 

The best part is that you can transfer your existing investments at other brokerages to Vanguard at the time of account opening. 

Trading Platforms

Vanguard Mobile trading app

For investing/ trading, one has access to the Vanguard app and web trading platform.

The App lets you buy, sell and exchange, analyze portfolio, view balances, transaction history, get the latest financial news and market details. 

However, the web platform is a bit outdated and difficult to navigate. For example, you have to leave the research page to trade, remember, or key in the ticker symbol and price details.

The quotes are delayed and do not stream and the options trading is limited to a single leg. you have to call a live broker to place more complex orders. The charts are basic with no tools for technical studies. 

However, Vanguard offers a stock screener and a separate ETF screener. 

Minimum Investment 

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: $1,000
Secondary market: $1,000
Municipal BondsSecondary market: $5,000; also subject to dealer minimums.

Account Types

Accounts at Vanguard are based on portfolio values. The higher portfolio value or the 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

Fee & Charges 

Investing in Vanguard is commission-free online. But, if you are investing through call service then the charges vary depending on the assets and the type of account you are holding.

Clients with very high account balances like premium accounts are treated to much lower commissions.

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

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%

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

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 Robinhood and Vanguard

Though both Vanguard and Robin hood are on the extremes in their investment philosophy, then do have commonalities when it comes to commission-free online trading.    

The other similarities between both the brokers are under: 

ParticularsVanguardRobinhood
Brokerage Account Minimum$0$0
Online Trading Fees
On Stock $0$0
On ETF$0$0
Option trades$0$0

Difference Between Robinhood and Vanguard

ParticularsVanguardRobinhood
BrokerFull serviceLimited offerings
Trading/ Investing AssetsStocks, ETFs, mutual funds,  bonds, options, CDs, mortgage-backed securities and UITsStocks, ETFs, options, cryptocurrencies and
Fractional shares
Based out of PennsylvaniaCalifornia
Account TypesBoth taxable and traditional IRA and Roth IRA, trust and 529 investment accountTaxable Accounts
Fees/ Commission VanguardRobinhood
Option contract fees$1 per contract$0
Transaction-fee (TF) mutual funds$20 per trade N.A
Phone TradesUp to $50 depending on the assets and account typeN.A
Margin AmountVanguard Margin RatesRobinhood Margin Rates
Up to $19,9999.00%5.00%
$20,000 to $49,9998.50%5.00%
$50,000 to $99,9998.00%5.00%
$100,000 to $249,9997.50%5.00%
$250,000 to $499,9997.00%5.00%
$500,000 to $999,9995.75%5.00%
$ 1 million or more5.25%5.00%
Account FeesVanguardRobinhood
International Wire fee$10$50
Domestic Wire fee$10$25
Trading PlatformsVanguard Web Platform 
Mobile Apps
Mobile trading
Web-based trading
Advisory servicesYes
Fee up to 0.30% depending on the portfolio value
N.A.
Research OfferingsIn house reports and expert analysis on a host of investment topics1700 Morningstar premium reports only with Gold Plan
Investor education Lots of articles on choosing, investing, managing portfolio and taxesFew resources
Customer SupportPhone contact
Forms
e-mail

Why You Might Prefer Robinhood

If your financial needs and trading style requires no advisory and minimal support then Robinhood is for you. Robinhood offers a $0 brokerage on all segments including option contract fees. 

You can trade conveniently on the smartphone and take advantage of zero commission fees for stocks, options, ETFs for a 5% margin interest rate.

For nextgen traders, Robinhood offers investment in cryptocurrencies which is missing at Vanguard.

Why You Might Prefer Vanguard

If you are looking for a long-term investment horizon, probably up to retirement planning then Vanguard is your broker. 

The full-service broker covers you for trading, investing, advisory and portfolio management in a traditional way through advisory.

Vanguard also helps you diversify your portfolio by offering mutual fund investments. 

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