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Is Vanguard free?

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Jan 2024
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Is Vanguard free as of January 2024?

Vanguard is in fact a zero-commission broker when it comes to buying and selling stocks. Zero commission is especially useful if you trade relatively low volumes, like buying stocks for less than $500 per trade, because you won't be hit with any minimum fees the broker might charge.

We should note that the payment-for-order-flow model, which is used by some zero-commission brokers to generate income (rather than relying on commissions), could potentially create a conflict of interest between you and your broker. This could result in trade execution (like routing your orders to specific market makers) that might be unfavorable for you under certain market conditions, especially when using market orders (as opposed to limit orders, which seem to be less affected).

Keep in mind that at some brokers, you could incur non-trading charges like withdrawal or inactivity fees. Also, if you trade on margin, the margin rate charged by brokers can differ wildly. In the next chapter, we'll find out what these charges are at Vanguard and how they compare with fees charged by its closest competitors.

If you want to read our full review, including fees, deposit options and other platforms (like web and desktop) then skip to the Vanguard review.

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Overview of Vanguard fees and charges

It's safe to say that Vanguard's fees are low in general. They either don't charge a brokerage fee for things that other brokers do, or they only charge a small amount.

Here's a high-level overview of Vanguard's fees

Vanguard Fees snapshot
Assets Fee level Fee terms
US stock fee Low Commission-free
EURUSD fee - FX not available
US mutual fund fees Average $20 per trade if investment is less than $500k, but Vanguard funds and 3000 other funds are free
Inactivity fee Low No inactivity fee

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Vanguard fees explained

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely because online brokerages' businesses can be much better scaled: from a purely technical standpoint, it doesn't make that much of a difference for them if they have 100 or 5,000 clients.

This is not to say, however, that they don't charge any fees at all. They make money by charging you various rates for various actions or events. Usually you need to keep an eye on the following three types of fees:

  • Trading fees - these are brokerage fees that you pay when you actually carry out a trade, like buying an Apple share or an ETF. What you pay is either a commission, a spread or a financing rate. Some brokers apply all of these.
    • A commission is either fixed or based on the traded volume.
    • A spread is the difference between the buy price and the sell price.
    • A financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
  • Non-trading fees. These are usually related to some operations you carry out in your account, such as depositing money, withdrawing money, or not trading for an extended period.

We compare Vanguard fees with its closest competitors, J.P. Morgan Self-Directed Investing and Ally Invest.

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Vanguard trading fees

Vanguard's trading fees are low, which makes it suitable for you even if you trade often (i.e. several times a week).

Let's break down trading fees according to the different asset classes available at Vanguard.

Trading fees

Vanguard's trading fees are low.

Stock fees and ETF fees

Vanguard has low stock trading fees.

Stock fees of a $2,000 trade
US stock
$0.0
$0.0
$0.0
UK stock
-
-
-
German stock
-
-
-

Data updated on January 26, 2024

Fund fees

Vanguard fund fees are average.

Fees of a $2,000 fund purchase
Mutual fund
$20.0
$0.0
$0.0
EU mutual fund
-
-
-

Data updated on January 26, 2024

Bond fees

Vanguard has low bond fees.

Fees of a $10,000 bond trade
US Treasury bond
$0.0
$0.0
$10.0
EU/UK government bond
-
-
-

Data updated on January 26, 2024

Options fees

Vanguard's options fees are low.

Options fees for 10 contracts
US stock options
$10.0
$0.7
$5.0
US stock index options
$10.0
$6.5
$5.0
UK stock index options
-
-
-
German stock index options
-
-
-

Data updated on January 26, 2024

Margin rates

Vanguard margin rates are high.

Vanguard margin rates
USD margin rate
13.8%
10.1%
13.0%
EUR margin rate
-
-
-

Data updated on January 26, 2024

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Vanguard non-trading fees

When it comes to non-trading fees, Vanguard is a rather cheap broker.

Non-trading fees include various brokerage fees and charges at Vanguard that are not related to buying or selling assets. This can be a withdrawal fee, deposit fee, inactivity fee or account fee.

A high-level overview of how Vanguard stacks up in terms of non-trading fees
Withdrawal fee
$0
$0
$0
Deposit fee
$0
$0
$0
Inactivity fee
No
No
No
Account fee
No
No
No

Data updated on January 26, 2024

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BrokerChooser score
4.3 4.3 /5
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Vanguard deposit fee

Usually, brokers don't charge anything for deposits, and Vanguard is no different.

Vanguard deposit methods
Bank transfer
Yes Yes Yes
Credit/debit card
No No No
Electronic wallets
No No No
Deposit fee
$0
$0
$0

Data updated on January 26, 2024

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Vanguard withdrawal fee

Vanguard generally doesn't charge a withdrawal fee.

Vanguard withdrawal fees and options compared
Bank transfer
Yes Yes Yes
Credit/debit card
No No No
Electronic wallets
No No No
Withdrawal fee for bank transfer
$0
$0
$0

Data updated on January 26, 2024

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Vanguard inactivity fee

Vanguard does not apply an inactivity fee, which is great because your account won't be charged even if you do not trade for an extended period (like several months or years).

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Author of this article

Edith Balázs

Forex • Safety • Financial Journalism

I bring 20+ years of experience as a correspondent having worked for Bloomberg, Dow Jones and The Wall Street Journal covering macroeconomics, stock, currency and fixed-income markets. I hold a Master's degree in American Studies and Journalism.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

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