Vanguard vs. Charles Schwab

Unequivocally two of the most reputable brokerage firms in business today, both Charles Schwab and Vanguard are household names.

Both platforms were pioneers in the investing world, Schwab with discount brokerage and Vanguard with index funds. Both continue to offer unique benefits today, although they cater to different investor groups and investing styles.

If you want the a wider breadth of services, tools, and technology, Schwab definitely offers a more advanced platform for more active traders. It also offers a network of 300+ local branches where clients can seek advice, make deposits, and place trades. 🎯

Vanguard has unique options too, but its tools and mobile options are less full-featured than Schwab’s as it caters more to buy-and-hold passive investors.

Schwab was also making big moves. In November 2019, the online broker announced it will acquire TD Ameritrade in 2020.

So how do the two old-school stalwarts Schwab and Vanguard compare to one another?

Fees

Commissions

$0

$0

Account minimum

$0

$0

Minimum initial deposit

$0

$0

General

Best for

Long-term, passive traders

All investor types and levels

Highlight

Vanguard Portfolio watch to assess your portfolio

Best online broker for stock trading

Promotion

None

None

Rating

6.0/10 Visit Vanguard on Vanguard's website

9.0/10 Visit Charles Schwab on Charles Schwab's website

Fees

Commissions

$0

$0

Account minimum

$0

$0

Minimum initial deposit

$0

$0

General

Best for

Long-term, passive traders

All investor types and levels

Highlight

Vanguard Portfolio watch to assess your portfolio

Best online broker for stock trading

Promotion

None

None

Rating

6.0/10 Visit Vanguard on Vanguard's website

9.0/10 Visit Charles Schwab on Charles Schwab's website

Trading Experience: Vanguard vs. Charles Schwab🤝

Vanguard deals mostly with higher wealth clients and corporate retirement plans. It focuses on providing long-term investments products matter more to this brokerage, so trading technology is a bit behind.

Active traders who rely on streaming quotes and customizable charts won’t find as much support with Vanguard. The firm does have a mobile app that most customers find to be adequate and offers the ability to trade on mutual funds at a reasonable rate (lower than Schwab).

In comparison, the benefits of Charles Schwab include a variety of tools and platforms to trade on. You can use their website to check in on your trades or place orders, or download the StreetSmart Edge platform, which delivers some of the best trading technology and streaming real-time data. You can customize charts to show you any kind of data set with Schwab’s toolkit.

The “All-in-One-Trade” tool on Schwab is another feature that makes it easy to build orders in many different asset classes. This is an innovative way to save time and ensure that your trades are executed all at once.

Schwab also monitors trade execution quality and provides a report on every trade to show price improvements. In addition, the broker announced it was creating an Intelligent Income Tool in 2020.

As Schwab constitutes one of the top online stock brokers on the market, a quick Vanguard vs. Schwab comparison shows the advantages of the latter:

With Vanguard:

•  ☑️ No active trader shortcuts or tools
•  ☑️ No complex options orders
•  ☑️ More limited streaming quotes or real-time data
•  ☑️ Very simple trading for retirement plan accounts and long-term investors
•  ☑️ More advantages for larger accounts and better pricing on mutual fund trades

With Schwab:

•  ☑️ Several platforms to trade stocks, ETFs, mutual funds, options, and more
•  ☑️ All-in-One-Trade Ticket platform allows you to build automated orders in any asset class
•  ☑️ Improve your price points with trade execution reports from Schwab
•  ☑️ Intuitive mobile app and customizable charts

Vanguard vs. Charles Schwab: Mobile Apps 📱

Vanguard offers some simple apps for Android, iOS, and Kindle Fire users. While it’s relatively easier to use, it’s not as feature-rich as other competing platforms and generally not made to do much more than check your balances, add funds, and place trade orders without any streaming data.

While the app does display quotes, these are delayed and need to be updated. If you have a question about anything, you’ll need to look online to find answers, as there is no customer service chat or other tip functionality.

Meanwhile, Charles Schwab offers syncing across platforms through its cloud mobile apps. It has lots of customizable features and elements, allowing users to customize their trades, watchlists, and charts.

Everything streams in real-time, and you can access education and webinars through the mobile as well. Trading tools such as options analysis are built into the StreetSmart mobile app. This rich feature-set is one of the reasons Schwab’s app is one of our favorites for buying and selling stocks.

For those who like to use mobile to trade every day, you might not be satisfied with Vanguard’s simple offering.

Vanguard mobile app includes:

• ☑️ Simple interface that allows you to check your portfolio and make long-term trade decisions
• ☑️ No streaming quotes or real-time data
• ☑️ Upload funds through mobile check deposit (although with a delay in deposit availability)

Charles Schwab’s mobile app includes:

• ☑️ Customization options that sync up across platforms
• ☑️ Streaming quotes and real-time data
• ☑️ Streaming video and education materials
• ☑️ Perform complex analysis and use other tools with the StreetSmart app

Vanguard vs. Charles Schwab: Education & Research 👨‍🏫

There are a few stock screeners available with Vanguard. These allow you to review stocks and see a page of information, and there is a separate ETF screener. However, these do not use streaming data, so these pages may not be accurate.

You also can only look at options chains when performing research, and it’s less informative than what investors find on other brokerage websites. You can use retirement calculators and planning tools to ensure that you get the right mutual funds and manage some risk with your long-term portfolio.

Charles Schwab goes a bit overboard with the amount of tools they offer, but is that really a bad thing? If you’re like me, you like having options. And with Schwab, there are all kinds of options for research including Suisse, MarketEdge, Reuters, CFRA, Morningstar, and many others.

For real-time trends and news, you can check out articles from Globe Newswire, Associated Press, Business Wire, MT Newswires, and more.

Schwab rates each tool and generates grades for each associated company. There are over 3,000 partner companies to choose from. You can use the Idea Hub on the StreetSmart platform to generate options trading ideas, and investors can initiate a deeper analysis to ensure that the trade is good before placing an order.

In addition, charts use streaming real-time data through the StreetSmart platform, and you can click on any stock to place a trade at that price.

In essence, Vanguard offers some retirement tools including:

•  ☑️ Screener tools for stocks, ETFs, and mutual funds
•  ☑️ Retirement calculators and planning tools for long-term investors
•  ☑️ Basic charting and some analytical data that you have to manually refresh

Charles Schwab offers the following tools for retirements and IRAs:

•  ☑️ Tons of research tools and screeners for all assets
•  ☑️ Use the Idea Hub to generate trading strategies and new options trading ideas
•  ☑️ StreetSmart platform offers customizable charts with streaming data

In comparison to Vanguard, Charles Schwab really goes above and beyond to ensure that their investors have the tools to succeed whether they are beginners or intermediate traders. It has streaming videos, resources, webinars, and tutorials. The brokerage giant also started Schwab Live Daily, which offers 4 to 7 hours of videos each and every trading day.

Schwab recently started the Choiceology podcast, which includes information about behavioral economics and how investors can make better strategic decisions. Schwab also publishes “On Investing” four times a year to help its investors with tips and trends.

The Schwab Learning Center offers pretty comprehensive learning sources for all skill levels as well. Trading Paths offers smaller lessons that combine videos, articles, and workbooks to help clients get a better understanding of complex trading strategies and topics.

Beginner investors and large retirement account holders will get the most out of Vanguard’s education, which includes:

•  ☑️ Basic education and tutorials for long-term, retirement investing
•  ☑️ Occasional webinars and older videos for mutual funds and retirement

Charles Schwab offers more education tools and an entire learning center that helps with:

•  ☑️ Beginner, intermediate, and advanced trading philosophies
•  ☑️ Schwab Live Daily provides up to 7 hours of video content per trading day
•  ☑️ Deep range of tutorials and courses with workbooks for more in-depth understanding

Vanguard vs. Charles Schwab: IRAs and Mutual Funds 📃

Vanguard offers a plethora of retirement calculators and over 16,000 mutual funds. Vanguard’s long-term strategy for financial freedom — which has the performance to back it up — makes it the best broker for a Roth IRA. So, how does Charles Schwab stack up?

Schwab has over 3,000 no-transaction-fee mutual funds, as well as its own proprietary indexes and ETFs. While it’s expense ratios are not as low as Fidelity or Vanguard, there are over 600 funds on Schwab’s platforms with a 0.50% or lower interest rate.

You can also use the Personalized Portfolio Builder tool to create a more diverse portfolio based on risk tolerance, time horizon, and financial goals.

Which is Safer? Vanguard or Charles Schwab 🛡

Both brokers are regulated by several top-tier financial authorities like Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Vanguard and Charles Schwab offer secure logins and security challenges when a login is not recognized. Both offer SIPC insurance on cash deposits of up to $1.3 million as well as additional insurance for large investor accounts. Both offer a security guarantee that covers 100% of any losses if unauthorized activity caused the issue, and neither has reported a material security breach.

Customer Support ☎

Vanguard offers the basic phone and email support options with hours set from Monday through Friday, 9:00 AM to 10:00 PM. There are no chat bots or live help offerings on the website or mobile app.

If you have an issue, you may spend time on the phone trying to reach someone during the day unless you have a large account. Vanguard uses tiered support to address issues, so if you have an account with less than $50,000, you may have a harder time getting help.

Charles Schwab offers free and managed account services, but one thing is true: Schwab has excellent customer service and offers 24/7 support to all customers. It also offers access to its 300+ local branches.

You can also get live help on the website or in the mobile app. If you want to talk to someone, you can quickly pick up the phone and get help in minutes. However, you will be charged extra for broker-assisted services as this is considered part of their full-service account options.

Vanguard vs. Charles Schwab: Fees 💰

Like many other brokers, Vanguard changed its commission schedule in late 2019. After pressure from new platforms like Robinhood, Betterment, or Acorns, the traditional discount brokers like TD Ameritrade and E*Trade reduced commission fees to $0. Charles Schwab and Vanguard eventually followed suit as well.

Today, you’ll pay $0 per equity trade and $0 plus $1 per options contract with Vanguard. However, Vanguard still charges considerably high interest on margin.

Schwab took away all commission fees for stock and ETFs, as well as per-leg fees for options. If you like penny stocks, you’ll be surprised to know that Schwab also eliminated commissions for OTCBB stocks.

Options are only $0.65 per contract. While margin rates are slightly higher than Interactive Brokers, they are lower than Vanguard, TD Ameritrade, and E*Trade.

Vanguard vs. Charles Schwab: Verdict 🏁

While both of these brokerages offer incentives for large accounts, the best option is likely Charles Schwab due to its vast library of resources, commission-free trades, and 24/7 customer support.

If you’re new to investing and looking for one of the best stock brokers to start trading, there is no question Charles Schwab has a more beginner-friendly platform. Yet it’s also suitable for the advanced, active trader — as Schwab makes our list of the top platforms for penny stock trading.

You can find answers to all of your questions, and they have built an intuitive education system that includes videos and worksheets to help investors learn basic and advanced trading methodologies.

Vanguard has a proven track record of supporting long-term individual investors. However, our view is Vanguard doesn’t prioritize individual accounts as much as Schwab. Rather, Vangaurd caters to large corporate clients offering retirement options to employees. It’s legacy creating the first S&P 500 Index Fund built helped establish its position with large, institutional accounts. Meanwhile, Charles Schwab has a similar legacy as more full-service discount broker, but its investments in technology suggest it prioritizes the self-directed individual investor more than Vanguard.

Ultimately, employees with a 401k or passive investors with retirement funds in Vanguard will be more than adequately served. However, more active investors who would benefit from additional tools and resources will likely find a better experience with Schwab than Vanguard.

Comparison Corner

Find out how Vanguard and Charles Schwab stack up against other competition.

• Vanguard vs. Fidelity
  Vanguard vs. TD Ameritrade
  Vanguard vs. E*Trade
  Vanguard vs. Robinhood
  Vanguard vs. Merrill Edge
  Vanguard vs. Betterment
  Vanguard vs. Wealthfront
• Charles Schwab vs. Robinhood
  Charles Schwab vs. Fidelity
  Charles Schwab vs. E*Trade
• 
  

About the author

Tim Fries

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Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.