Fidelity Investments and Vanguard are two of the largest asset managers in the world, offering a variety of low-cost funds to meet investors’ needs. Both companies also operate online brokerages and are highly rated in Bankrate’s annual review of the best brokers.
Fidelity was recognized as Bankrate’s best broker for beginner investors in the 2024 Bankrate Awards. Fidelity is known for its low costs, wide range of account types, and excellent customer service. On the other hand, Vanguard offers thousands of no-transaction-fee mutual funds and commission-free online trading of stocks and ETFs.
Deciding between Fidelity and Vanguard depends on your specific needs and preferences as an investor. Here is a comparison of some key features:
| BROKER CATEGORY | FIDELITY | VANGUARD |
|---|---|---|
| Stock and ETF commissions | $0 | $0 ($25 for phone orders) |
| Options commissions | $0.65 per contract | $1 per contract for accounts below $1 million |
| Account minimum | $0 | $0 |
| Tradable securities | Stocks, ETFs, bonds, mutual funds, options, cryptocurrency | Stocks, ETFs, bonds, mutual funds, options |
| Account fees | No annual, activity or transfer-out fee | $25 fee for certain accounts (waivable with $5,000,000 in Vanguard assets or e-delivery of statements) |
| No-transaction-fee mutual funds | ~3,400 | ~3,200 |
| Account types | Various including IRAs, 529, HSA, managed portfolio, charitable and trust | IRAs, 529, managed portfolio |
| Mobile app | Fidelity Mobile app on App Store and Google Play | Vanguard mobile app on App Store and Google Play |
| Fractional shares | Available for purchases and dividend reinvestment | Available on mutual funds purchases, dividend reinvestment on stocks/ETFs |
| Customer support | 24/7 phone, chat, email, 200+ branches | Phone M-F 8 a.m. – 8 p.m. ET, email |
Fidelity vs. Vanguard: Costs
Both Fidelity and Vanguard keep costs low, but Fidelity has a slight edge. While both offer zero commission for stock and ETF trades, Fidelity charges $0.65 per contract for options trades compared to Vanguard’s $1 per contract for accounts under $1 million. Both brokers provide over 3,000 no-transaction-fee mutual funds.
Fidelity has no account fees, making it more attractive for new investors with limited savings compared to Vanguard’s $25 fee for certain accounts.
Fidelity vs. Vanguard: Account minimum
Both Fidelity and Vanguard have no account minimum, making them accessible to new investors.
Fidelity vs. Vanguard: Tradable securities
Both brokers offer a range of tradable securities including stocks, ETFs, bonds, mutual funds, and options. Fidelity also provides cryptocurrency trading options.
Fidelity vs. Vanguard: Account types
Fidelity offers a wider range of account types compared to Vanguard, including health savings accounts (HSAs), trusts, and charitable accounts.
Fidelity vs. Vanguard: Fractional shares
Fidelity offers fractional shares for stocks, ETFs, and dividend reinvestments, while Vanguard offers fractional shares only for mutual funds and dividend reinvestments.
Fidelity vs. Vanguard: Customer support
Fidelity has better customer support with 24/7 availability via phone, chat, email, and branch locations. Vanguard offers phone support during weekdays and email assistance.
Bottom line
Fidelity is recommended for its cost-effectiveness, account variety, and fractional shares. Vanguard is a close competitor, especially for investors with significant assets. Consider your priorities when choosing between the two or open accounts with both to access their unique features.
Editorial Disclaimer: It is recommended to conduct independent research before making investment decisions, as past performance does not guarantee future results.