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Vanguard Review & Rating USA 2024

Name: Vanguard
Brand: Vanguard

Is Vanguard USA Scam Or Legit?

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User Reviews

Vanguard is an online investment company with more than 45 years’ worth of experience and a total of over $6.2 trillion in assets under management according to its parent company, The Vanguard Group.

Our Vanguard review found that many services are offered to those with a Vanguard open account. A range of financial and investment services, such as brokerage services, variable and fixed annuities, asset management and financial planning. Vanguard USA is legitimate and professional, being the world’s largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs).

In this Vanguard review, we cover the broker’s pros and cons, the different accounts available and finally our Vanguard opinions to help you determine whether it is the right company for you.

Vanguard Pro and Con

Vanguard offers an industry-leading low-cost trading model
There is a large selection of mutual funds available
Customer support is efficient, professional and helpful
Options, ETF and stock trading is commission-free

The trading platform is more basic than some other brokers

License
Accepts Customers from: USA
Website: investor.vanguard.com

Overall Rating

Rating follows

New Customer Offers

3.7/5
Usability

4.0/5
Available Account Types

4.1/5
Trading Platforms

3.9/5
Payments

3.9/5
Customer Service

3.9/5
Regulation & Deposit Insurance

3.8/5

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User Rating

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Usability
Available Account Types
Trading Platforms
Payments
Customer Service
Regulation
Bonds
ETF
Funds
Conclusion
User Reviews

Jenna Arnold

Last Updated on 20/09/2024

Usability, Look & Feel

When constructing our Vanguard USA review, we found the website to be as easy and straightforward to navigate as any trader platform. Important sections, such as fees, legalities, accounts, advice and news, and information on all aspects of investing can be located and accessed with minimal effort on your part as everything you need is accessible through the menu bar.

Information about all of the investing options and accounts available (which we’ll discuss later in our Vanguard review USA) is available under the ‘My Account’ tab, and the drop-down menu makes it easy to set up new accounts, invest, or to find out more about what Vanguard has to offer. You can choose which account or investment you are interested in using this drop-down menu under the ‘Investing’ category.

When testing the website for our Vanguard review, we found that those who are less experienced investors would be able to find their way around the site just as easily as those who are veteran traders. If you are not sure which account or investment you would like to begin, you are able to choose an ‘Investment Goal’ (such as saving for college or an emergency fund) under the ‘Advice & Retirement’ section, where Vanguard will provide you with all the help you need.

The Vanguard USA website is designed professionally and displays a consistent red, white and grey colour scheme throughout. It could benefit from some modernisation, but it’s certainly not an unpleasant experience. The website performs immaculately, loading quickly and working well across all devices for those with a Vanguard open account.

Vanguard Open Account

As part of our Vanguard review USA, we took a look at how easy it was to open an account with the broker.

Opening an account with Vanguard USA is relatively straightforward for most people. You start by tapping the ‘Open an Account’ button, which is found alongside the ‘Forms’ and ‘Contact Us’ tabs on the top right of the homepage. You then choose whether you want to open a new account (such as an IRA, general investing, or saving for education account) or transfer assets to Vanguard USA from a different platform.

The accounts available include:

Retirement (IRA)
General savings (individual, joint, trust)
Education (529, UGMA/UTMA)
Small business (i401(k), SIMPLE, SEP)

With a Vanguard open account, you are able to invest in the following:

Mutual funds
ETFs
Stocks
CDs
Bonds

Our Vanguard review discovered that there are plenty of options to choose from, as you can see, so it’s important that you do your research to determine which is best suited to you.

Once you have chosen your Vanguard open account, you are required to complete the application form online, which takes around five to ten minutes. Your account will be confirmed via email within one or two days, following which you will be able to choose investments as well as individual stocks, bonds and ETFs.

There is also the option to become a VIP account holder through its Flagship Services scheme. Here, investors with $1 million to $5 million will receive exclusive resources, including meetings with Vanguard USA professionals who can help you with your investing and wealth management.

Our Vanguard review found that there is advice available to help both beginners and experienced investors choose which account would best suit them (including the ‘Investing Goals’), but it’s always important that you read the terms and conditions of the policy before signing on the dotted line.

Trading Platforms at Vanguard

When using Vanguard USA, it becomes clear that its trading platform does lack the high-quality analytical tools that are typically offered by its competitors, as found in our Wealthfront review and Wealthsimple review.

Although our Vanguard review evaluates it as low-cost in comparison to many brokers, it is evidently less advanced in terms of its trading platform as it is relatively basic. For this reason, Vanguard may not suit those who wish to actively trade stocks (active traders), but it does provide an adequate platform for placing orders as it has traditionally focused on buy-and-hold investors.

Mobile App

Vanguard’s mobile app allows you to invest and analyse your Vanguard accounts with ease, similarly to how you would when using the website on your desktop.

Using the app, our Vanguard review USA found that you are able to trade mutual funds, ETFs and stocks, monitor your account, analyse performance and view insights, follow the latest market news, and research new investment opportunities.

Payments: Costs and Fees at Vanguard

New customers are able to fund their Vanguard USA accounts using three main methods:

Electronic bank transfer or another Vanguard account
Rollover from an employer plan (401(k) plan, for example)
Transfer funds or investments from another financial firm or broker

Investment Costs

According to our Vanguard review, you pay $0 commission when trading stocks, ETFs and over 3,100 of the no-transaction-fee mutual funds when doing so through your Vanguard Brokerage Account.

The average Vanguard USA mutual fund and ETF expense ratio is 82% less than the industry average, meaning that you are getting more for your money than you would when using many other brokers.

The broker promises that you will never pay a commission when you buy and sell Vanguard mutual funds and ETFs in your Vanguard account, which is reassuring and useful for all investors.

The few mutual funds that charge fees do so in order to help cover the high transaction costs and to discourage short-term trading, which is advised against.

There is a $0 account minimum, but funds begin at $1,000, which is around the industry average, and other products may also include minimum investing requirements.

The majority of Vanguard mutual funds require a minimum investment of $3,000, but it’s possible to invest in any Vanguard Target Retirement Fund or Vanguard STAR Fund with just $1,000 – so there are options for those with varying amounts of funds.

The minimum investment for all ETFs (whether Vanguard or non-Vanguard) is the price of one share, which is a simple system to understand for investors of all levels of experience.

Account and Advice Fees

A $20 annual fee is applicable to all brokerage and mutual-fund-only accounts, but these are interestingly avoidable if you sign up to the e-delivery service. The e-delivery service is a way of receiving statements, annual privacy notices, confirmations and fund reports for mutual funds and brokerage accounts electronically.

Vanguard also promises to waive the fee if you are one of the VIP clients (a Voyager, Voyager Select, Flagship or Flagship Select client) or if you have a trust or organization account registered under an employee identification number (known as a EIN). As generous as this is, there are a number of broking newcomers to the trading market offering a trading cash back. Head over to our SogoTrade review to see how the fees and offers compare.

Customer Service

Customer service support is available both online via email and via telephone on Monday to Friday from 8am until 9pm. The support is offered directly from the provider and is available in English, as expected from an American-based company, and most customers have a positive experience with Vanguard’s customer service.

A link to the ‘Contact Us’ page is on-hand at the top right of the Vanguard website, making it easily accessible and showing that Vanguard is happy to help its customers. The support is efficient and timely, ensuring that you are not left in the dark if you’re ever unsure about anything relating to your investments.

Our positive Vanguard opinions are reinforced by the fact that there is also an extensive support or FAQs page, where Vanguard experts answer trending questions and provide useful tutorials to help you make the most of your investments.

For those with at least $50,000 invested through Vanguard, you are able to sign up to Vanguard Personal Advisor Services, which provides clients with tailored goals-based financial plans. There is a fee of 0.30% annually (well below the 1.08% industry average) if you have up to $5 million in managed assets, with it reducing to as low as 0.05% for those with over $25 million invested.

Regulation & Deposit Protection

Vanguard USA is regulated by the Securities and Exchange Commission (SEC) and Financial Industry Regulation Authority (FINRA), so your money and investments are in safe hands. It is considered a safe trading broker with many years of experience, having been founded way back in 1975 and helped millions of clients make smarter choices with their assets.

All Vanguard customers are covered by the investor protection scheme in the US known as Securities Investor Protection Corporation (SIPC). This scheme protects against the loss of cash and securities if the broker collapses, up to a maximum of $500,000 (including a $250,000 limit for cash). Our Vanguard opinions are that it is one of the best investor protection schemes available and provides a level of protection significantly better than most other schemes.

SIPC generally covers stocks, bonds, mutual funds, company shares and other registered securities. It does not, however, cover investments like unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold or any other commodity futures contracts or commodity options.

Vanguard USA has won several prestigious awards and titles during its 45+ years, including Morningstar’s first Exemplary Stewardship Award, Lipper Fund Awards, and was named as one of America’s best employers by Forbes in 2018.

Additional Vanguard USA Offers

Our Vanguard review came across various resources available on Vanguard and the support is on offer if you require it. Vanguard members have access to tutorials, videos and advice through its online portal.

Financial advice is on offer through both a digital and personal advisor service, depending on your preferences, available for a small fee of 0.15% variable (Vanguard Digital Advisor) and 0.30% annually (Vanguard Personal Advisor Services).

Vanguard USA offers free advice relating to your investment goals and retirement planning, and also provides ‘Investor Education’ services to help you understand exactly what you’re putting your money into. There are also tools and calculators available, which allow clients to analyze their investments and set up a plan for retirement or paying for education.

With Vanguard USA, your benefits as a client improve as your investment portfolio grows. Those with $1 million to $5 million are able to access the aforementioned Flagship Services, which provide investors with personalized assistance in dealing with larger portfolios.

Vanguard Bonds

Vanguard CDs & Bonds

With a Vanguard open account, you get access to an extensive online selection of fixed income investment options which can help you find certificates of deposits (CDs) or bonds that are suitable for your personal situation and objectives.

Are CDs for You?

CDs – certificates of deposits – are interest-bearing certificates that are often used by savings and loan providers, banks, and credit unions to raise money for their business. You deposit some money to the issuer (with the amount depending on the type of CDs you get and your preferences), and they promise to repay you with a specified percentage of interest added.

There are many circumstances under which you may want to consider investing in the CDs on offer at Vanguard, including if you’re saving for a short-term objective (such as buying a home within the next two years), if you’re looking for a place to store some cash that you don’t need to use immediately, or if you are attracted by the safety of knowing that your investment being insured by the government.

According to our Vanguard opinions, this type of investment option is also useful for those seeking a better yield than that offered by bank accounts or money market funds, so it’s a useful alternative product to have at your expense with a Vanguard open account.

Should You Consider Bonds?

Bonds are slightly different investments, but they are also related to the government and offer a high degree of security. When you purchase bonds, you are essentially loaning cash to a government, government agency or corporation to fund projects and various other business needs.

The bond issuer is required to repay you within an agreed timescale, with the addition of a pre-agreed interest rate, depending on which bond you opt for. Vanguard clients may want to invest in bonds if they would like to focus on a specific maturity or credit quality, or if they are looking for a way to supplement the mutual funds within their portfolio.

Cash Options

There are also some short-term investment options with a Vanguard open account, including products such as CDs and money market mutual funds. Cash investments are short-term investment reserves that have the purpose of preserving your savings, rather than seeking a dramatic increase in value (which also comes with equal risks).

Our Vanguard review has shown how diverse and broad the options available at Vanguard are, with cash investments being amongst the safest in terms of its risk. You are unlikely to make any significant returns, but cash investments are a good option to have if you are still unsure of how you would like to invest your money or if you aren’t able to invest long-term.

Vanguard ETF

Vanguard ETFs

With Vanguard USA, you can enjoy the benefits of ETFs (exchange-traded funds), which offer the diverse nature of mutual funds alongside lower minimum investments and real-time pricing.

An ETF is essentially an investment fund that is traded on stock exchanges, similarly to stocks. They hold assets such as stocks, bonds or commodities and typically operate in a way that is designed to keep them trading near its net asset value (but remember that deviations can sometimes occur).

83% of Vanguard’s ETFs offered better returns than that of their peer-group averages over the past 10 years. Over 1,800 of the ETFs available with a Vanguard open account (from Vanguard and other 100 companies) offer commission-free trading, which minimises the fees and charges that you are required to pay as an investor.

ETFs are traded like individual stocks and bonds, meaning that you are required to set up a brokerage account before you can purchase any yourself, but that can be done easily and the process is explained simply online.

Vanguard even has its own Vanguard Select ETFs, which is basically a shortlist of highly diversified and low-cost ETFs to suit those who are beginning their investment journey or are looking to set up a balanced portfolio.

If you would prefer a larger list of ETFs to choose from, you can also look at the full list. Here, you can review the ETFs’ past performance, including its standardised and after-tax returns, and can compare each fund side-by-side to determine which one is the best option for you.

If you feel comfortable to do so, you can leave the selection of stocks and bonds to a professional fund manager to save yourself both time and effort, but be sure to familiarise yourself with the details of your ETF beforehand – don’t invest blindly.

Leave the selection of stocks and bonds to a professional fund manager and save yourself the time and effort.

ETF Costs & Fees

Our Vanguard review found that clients were able to buy and sell ETFs online without paying any commission. If you would like one of Vanguard’s professional advisors to make a Vanguard ETF trade for you, the broker promises that there will be no fee.

The annual account service fee is applicable and ranges between $15 and $25 (depending on which account you own), but this is easily avoidable by signing up to the electronic delivery of your account documents.

Luckily, you do not need thousands of pounds to open an ETF with Vanguard USA, as there is no minimum spend as such. All you need to get started is enough cash to cover the price of one share, which starts from as little as around $50. There is also no minimum account balance, as you only need enough money in your settlement fund to pay for the ETFs you want to purchase.

Bid-ask spreads refer to the difference between the bid price (the highest amount a buyer is willing to purchase a specific ETF for) and the ask price (the lowest amount a seller is willing to accept for a specific ETF) at a certain time.

These vary considerably depending on the ETFs popularity or ‘supply and demand’, as Vanguard puts it. Spreads typically range from $0.01 to $0.25 for Vanguard ETFs, but the cost can change if markets become volatile.

There is an expense ratio for every ETF as standard, but Vanguard boasts an impressive expense ratio at 76% less than the industry average (0.06% in comparison to the average of 0.25%), which could save you over $31,000 over 10 years if you invest $100,000.

Vanguard ETFs Summary

Vanguard’s ETFs are affordable and cost-efficient, allowing you to invest with confidence and little worry. There are dozens of ETFs to choose from at Vanguard USA, covering all aspects of the US and international stock and bond markets.

They are highly diversified, which means that you reduce the overall risk level of your investments, and are easily manageable through your portfolio.

Vanguard Funds

Vanguard Mutual Funds

Vanguard’s mutual funds are useful in that they reduce the amount of work that you are required to do as an investor, offering less risk through more diversification, lower fees, professional management and convenience.

By investing in mutual funds through your Vanguard open account, you get additional benefits that would not be offered if you simply invested in individual stocks and bonds alone. When you purchase a mutual fund, you are essentially investing in hundreds (sometimes thousands) of securities at once, including stocks and bonds. This means that, if one security is not performing as well as it should be, the others are able to offset it and balance out your portfolio to reduce the risk of you losing money overall.

There are no-load mutual funds available at Vanguard, where you only pay one expense ratio instead of constantly having to pay commissions when buying and selling individual securities yourself. Vanguard’s mutual fund expense ratio is 84% less than the industry average, only strengthening our Vanguard opinions.

The $20 annual fee is charged annually for each fund with a balance below $10,000, as mentioned, but these are easily avoidable through signing up to electronic delivery or becoming one of the VIP client options.

Unfortunately, there are some Vanguard funds that will charge a fee (between 0.25% and 1.00%) when you buy and sell shares. These are, however, relatively rare and are in place in order to deter investors from short-term or speculative trading.

Vanguard funds don’t charge front or back-end loads or any other sales commissions, and the website is transparent about its fees. Clients have access to thousands of commission-free ETFs and over 160 no-transaction-fee mutual funds from both Vanguard and third-party companies.

There are some minimum investment requirements to consider when thinking about getting a Vanguard mutual fund, varying from just $1,000 to $100,000, so be sure to check this in your fund’s terms and conditions beforehand. These are common, so don’t be too disappointed or concerned if you find that your ideal fund has a minimum investment amount.

Other Mutual Funds

Your Vanguard brokerage account gives you access to a wide range of investment options, including mutual funds from hundreds of other companies. Many of these funds are offered without commission fees.

There are tools available on Vanguard to search through the funds available, providing you with greater flexibility and investment possibilities.

Vanguard Review Overall Conclusion

Despite not offering a vast range of cryptocurrency or forex investment options, Vanguard are good at what they specialise in and that is offering ETFs and mutual funds at affordable rates, without any significant fees.

Our Vanguard opinions are that its platform isn’t a market leader, but the array of low-cost funds are perfect for those looking to invest their money long-term and you will struggle to find a broker with lower fees.

As our Vanguard review mentioned, there are plenty of resources, advice and tools available for members, including useful retirement planners.

Members have a useful support team at their disposal, and there are premium advisor services available to those looking for personalised advice.

Our Vanguard review USA recommends a Vanguard open account to anyone looking to build a low-cost portfolio consisting of easily manageable ETFs or mutual funds. If you’re looking at alternatives check out our Robinhood review, a broker offering an accessible platform for the trading newcomer.

For more reviews, take a look at our latest and ZacksTrade review.