Vanguardand E*TRADE are both well-respected online brokerages that offer a variety of investment products and services. While they share some similarities, there are also key differences that can make one a better fit for your specific needs.
E*TRADE overview
E*TRADE is a great option for active traders seeking a wider range of investment products and advanced trading tools. They offer commission-free ETFs and competitive commissions on stocks and options, along with a user-friendly platform and 24/7 customer support. Explore E*TRADE broker review: product guide with regulations.
Pros
- E-trade offers stocks, options, ETFs, mutual funds, bonds, and futures.
- Power E*TRADE provides customizable charts, technical studies, and preset scans.
- 24/7 customer support: Live chat, phone, and email support available.
- There is no commission on U.S.-listed stocks, ETFs, and mutual funds.
- Offers over 6,000 no-transaction-fee mutual funds and strong mobile trading capabilities.
- Better for cash management if manually optimized.
Cons
- Options trading and certain account fees may be higher than Vanguard.
- E-trade less focus on long-term, index-based investments.
- Post-acquisition by Morgan Stanley, some users report changes in service consistency.
Vanguard overview
Vanguardis ideal for long-term investors focused on low-cost, index-based investments. They offer a vast selection of mutual funds and ETFs with low expense ratios, making them a cost-effective choice. Vanguard’s user-friendly interface and focus on retirement planning make it a great option for those seeking a hands-off approach to investing. Learn how to open a Vanguard account: step-by-step guide.
Pros
- Vanguard offers some of the lowest expense ratios in the industry.
- Wide selection of ETFs and mutual funds.
- An easy-to-use platform for both beginners and experienced investors.
- Ideal for those seeking a passive investment approach.
- Strong brand trust and leadership in index fund innovation.
Cons
- A limited range of investment products is not suitable for those seeking a wide variety of options, especially active traders.
- Not as suitable for those who require complex charting and analysis tools.
- Customer support limited to business hours: This may not be ideal for those needing immediate assistance outside of regular business hours.
- Slower response time on customer support compared to E*TRADE, as noted by users.
Comparison Vanguard vs. E*TRADE
E*TRADE and Vanguard are both reputable online brokerages offering a variety of investment products and services. While they share some similarities, there are key differences to consider.
| Feature | E*TRADE | Vanguard |
| Founded | 1982 | 1975 |
| Parent company | Morgan Stanley | Privately owned by its funds and shareholders |
| Commission-free trading | U.S.-listed stocks, ETFs, mutual funds | Vanguard mutual funds, ETFs, stocks, options |
| Investment options | Stocks, ETFs, bonds, options, mutual funds, CDs | Stocks, ETFs, bonds, options, mutual funds |
| Account types | Brokerage, IRA Traditional, Roth, Rollover, Core portfolios, Savings | Brokerage, IRA Traditional, Roth, Rollover, 529, 529 Education |
| Minimum investment | $500 for mutual funds, $2,500 for ETFs | $0 account minimum (some funds start at $1,000), 529 starts at $50 |
| Platform | Power E*TRADE web & app, mobile trading | User-friendly web interface & mobile app |
| Mutual fund options | Over 6,000 commission-free funds | 3,400 no-transaction-fee mutual funds |
| Expense ratios | Varies depends on the fund | Low-cost, typically below industry average |
| Options trading | $0.65 per contract reduced to $0.50 for 30+ trades/quarter | $0 base fee, $1 per contract |
| Futures trading | $1.50 per contract | Not offered |
| Bonds | Over 50,000 offerings, including US Treasury trades | Bonds available through mutual funds and individual bonds |
| Savings rate APY | 4.50% for Premium Savings Account | High interest on uninvested cash |
| Commission on ETFs | $0 | $0 |
| Customer support | 24/7 live chat, phone support, FAQs | Phone support, FAQs |
| Regulatory oversight | SEC, FINRA, SIPC, NFA, FDIC, FRS | SEC |
| SIPC insurance | Up to $500,000 | Up to $500,000 |
| Advisory fees | 0.30% for automated portfolios Core Portfolio | Digital advisor $15/year per $10,000; Personal advisor $30/year |
| Mobile app | Power E*TRADE app | Vanguard mobile app |
| Additional fees | Inactivity fee: $0; Returned check: $25 | $20 annual service fee waived with e-statements |
| Professional investment advice | Available through Morgan Stanley | Offers advice via Digital, Personal Advisor, and Wealth Management |
| ESG investment options | Yes | Yes |
| Research tools | Kiplinger-rated analysis, powerful web tools | Free research, market data |
| Notable awards | Best Trading Technology 2023 | Known for low-cost, long-term growth funds |
Target Audience
- E*TRADE is suitable for active traders seeking a wider range of investment products and advanced trading tools.
- Vanguard is ideal for investors who prioritize low-cost, index-based investments and long-term financial planning.
If you’re a buy-and-hold investor with a long-term horizon and minimal need for active tools, Vanguard fits perfectly. For hands-on investors, E*TRADE’s trading platform and real-time analytics offer greater flexibility and engagement.
Conclusion
Both E*TRADE and Vanguard are excellent choices for online investing. The best broker for you depends on your individual needs and preferences. Consider your investment goals, trading style, and desired level of customer support.
Pro Tip
Compare other brokers with our trusted forex brokers review. Check out insights into forex, CFDs, cryptocurrencies, and banking. We are eager to hear your opinions—drop your feedback in the commentaries below!
