Vanguard vs E*Trade: Broker Comparison
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There are many different inroads into the world of investing.
However, E*Trade has quickly become one the most popular online brokers to get started for beginner investors. When compared to Vanguard, a giant in the online brokerage industry, E*Trade offers more education resources and more fluid mobile apps that provide flexible trading options.
Both brokerages have separate options for for automated investing as well, in an effort to compete with robo-advisors like Betterment and Wealthfront. Vanguard Personal Advisor Services faces off against E*Trade’s Core Portfolios.
While each has its advantages, E*Trade offers solid education tools and more robust data to help investors make better investment choices.
Overview of Vanguard and E*Trade
- With plenty of retirement planning tools and guides, Vanguard makes it easy to set up your retirement accounts and tie them to actionable goals.
- Vanguard investors can pick from over 16,000 mutual funds, and all Vanguard mutual funds have no transaction fees. Other mutual funds cost from $20 to $35.
- With higher account balances, you can unlock more personalized options and robo-advisory tools such as Vanguard Personal Advisor.
- Commission fees are still pretty high including $7 per trade for stocks and ETFs.
- Vanguard offers a simple mobile app to view your portfolio, make simple trades, and deposit funds.
- There are three free platforms available with E*Trade for web, desktop, and mobile.
- Traders can access all types of asset classes except for forex and crypto.
- Mobile apps include ladder for futures traders, which is different than many other online brokers.
- Multiple research tools, charting analysis, and education courses make E*Trade better for beginners.
- More options for active traders with lower costs including zero commission fees for stocks, ETFs, and 4,400 mutual funds.
Trading Experience: Vanguard vs E*Trade
Vanguard offers a very basic trading experience with most of its technology-focused on retirement analysis, long-term investments, and mutual funds. While Vanguard offers more than 16,000 mutual funds to select from, you don’t have access to more complex options trading.
You’ll be limited to options chains. Without streaming quotes or real-time data on Vanguard’s website or mobile app, you have to do much of the research and risk analysis on your own.
E*Trade has a more robust trading experience with platforms that are fluid from website to desktop to mobile apps. There are tons of streaming quotes, customizable feeds, and analysis tools to help you make the right decisions. Inputting orders is effortless with E*Trade’s desktop and mobile apps.
You can trade in stocks, bonds, ETFs, derivatives, mutual funds, and futures with E*Trade. You can also access IPOs in E*trade, which is not available in E*Trade.
Forex trading is the one thing that you can find with Vanguard that you won’t with E*Trade. However, all retirement accounts are available with both.
Vanguard shows a slightly better performance in ROI after taxes than E*Trade. However, there are more options to trade and better trade executions with E*Trade than Vanguard.
E*Trade is also expanding with new automated reporting functionality coming to Equity Edge Online.
Overall, Vanguard offers the following:
- Access to over 16,000 mutual funds with no transaction fees for some, and $20 to $35 transaction fees for other mutual funds.
- Higher cost for stocks and ETF trading with $7 per trade, less complex options orders available at $7 plus $1 per contract.
- Trading technology is a bit outdated in comparison to the robust, responsive E*Trade platform.
E*Trade offers more financial services for lower account balances and can be used for active and passive investing. Some of the things we like about this platform include:
- Intuitive and robust online broker with web-based, desktop, and mobile apps.
- Several packages for low and high account balances
- $0 commission fees for stocks, ETFs, and options pls $0.65 per contract
- DIY investors have an easier time accessing different tools and advanced charting
- Access to real-time streaming data and multiple order types
Mobile Platform and New Technology
Both brokers offer some of the best mobile apps for investors, but E*Trade has updated their app multiple times throughout the years to add more tools and streaming real-time data. You can do so much more with E*Trade as well because it offers two platforms. The first is called Power E*Trade, which is modeled after its desktop platform.
You can set up watchlists, market indexes, level II quotes, and option chains contracts. You can also trade in futures contracts on mobile, which is missing from Vanguard’s mobile app altogether.
In the second E*Trade mobile app, you can access customizable charts that display horizontally, making it easy to see Bloomberg’s business news streaming quotes. You can set up your charts to display automatically on E*Trade’s mobile app.
Vanguard’s mobile app mostly revolves around checking on your portfolio and making simple trades without streaming quotes or real-time data. You can’t set up watchlists, but it does allow for a mobile check deposit. You won’t find any educational resources, but you can download account statements as PDFs.
Vanguard’s mobile apps are pretty basic, offering:
- Check your account balances and scan checks into your account through mobile check deposit
- Simple market orders for stocks and mutual funds
E*Trade offers two mobile apps that give you:
- Access to Power E*Trade, which allows you to place complex market orders on-the-go
- Set watch lists, market indexes, option chains, future contracts, and Level II quotes
- Set up customizable charts with popular news feeds or other technical analysis data
- Access education and research tools, as well as customer support within the app
Education, Research, News, and Stock Trends
You can access more retirement planning and long-term investing tools with Vanguard. Through Vanguard Personal Advisor Services, investors receive access to more goal planning resources including how-to articles, calculators, retirement cost planning, and long-term forecasts.
In comparison, E*Trade offers a robo-advisory service but it’s not as robust for retirement planning as Vanguard. You can’t separate out your portfolio for different goals, for example. E*Trade Core Portfolios allows you to assess risk with different tools, which offers more insights than Vanguard’s calculators.
Beyond retirement planning, E*Trade offers more education resources including streaming news, fundamental analysis and ratios, technical analysis tools, charting, reporting, and complex options strategies.
You can test out these strategies through the Power E*Trade desktop platform. These tools are easier to use and include updated real-time information, which is not available in Vanguard.
Some screeners are available on Vanguard for stocks and ETFs, but the options ideas is limited to just options chains. These tools also do not use real-time data, and so some of the information may be outdated in comparison to other online brokers.
In addition, E*Trade has made a name for itself by offering more education courses to help out beginners and intermediate traders. You can learn different methodologies and get into active trading through their courses, which is not something that Vanguard tries to offer on its website at this time.
Vanguard’s education and research tools are pretty basic, including:
- Some screener tools for stocks and ETFs
- Retirement calculators and planning
- Robo-advisory and broker-assisted trades for higher tier customers with larger accounts
- No streaming data, customizable charts, or updated news feeds
E*Trade’s platform has way more education offerings and tools for research including:
- Screener tools, calculators, trade simulators, and retirement planning guides
- Take courses to learn more about different trade methodologies and market order types
- More technical analysis charting tools with customization options
- Offers TipRanks recommendations
Mutual Funds and Retirement
Since Vanguard is known as the king of retirement planning with access to over 16,000 mutual funds, E*Trade may not be able to compare.
E*Trade offers 4,400 no-transaction-fee mutual funds. Any fund not on the no-fee list costs $19.99 per transaction.
E*Trade also provides highlighted mutual funds on their All-Star Funds Report, which is updated regularly. However, E*Trade’s retirement tools are not as robust.
E*Trade offers the latest in security coverage for its online, desktop, and mobile apps. Unauthorized attempts are blocked by a security challenge and two-factor authentication. Additional third party coverage is available to cover any costs due to unauthorized use of the account.
The Complete Protection Guarantee from E*Trade covers all fraudulent use of a client’s account, and you can add more security software with higher account levels.
Vanguard offers some insurance as well as a security challenge, but it mostly feels outdated compared to E*Trade’s secure login.
If you have a higher level account with Vanguard, you’ll receive more attention and support with a dedicated account manager in some cases. However, regular phone support is only offered Monday through Friday, from 9:00 AM to 5:00 PM during trading hours.
In contrast, E*Trade has improved its customer support and online service options in the past year. Customers with larger accounts still receive more help and priority service, as well as dedicated asset management.
FAQs About Vanguard and E*Trade
How Many Trading Platforms are Available Under E*Trade?
You have access to E*Trade Web, Power E*Trade, and E*Trade Pro. All of these are free and require no minimum balance or trade activity. E*Trade Web provides free real-time, streaming market data and quotes with live market commentary and research stock screener tools.
E*Trade Pro is the desktop platform, which lets you create and test different trading strategies in addition to back-testing and strategy scanner tools. For active traders who want to dive into options, the Power E*Trade platform and app is the best way to go.
Is E*Trade or Vanguard Best for Retirement Investments?
E(Trade offers a number of investment types, but it lacks the ability to set up specific goals and invest in them as Vanguard does. While you can access all IRAs and 401k planning with E*Trade, Vanguard has more mutual funds and fewer fees than E*Trade.
Ultimately, you can set up retirement accounts on both, and while E*Trade has more tools, education, and research for DIY investors, Vanguard’s entire platform is based around retirement planning and long-term investing. One thing that E*Trade does do differently is the All-Star Funds Report that shows the best no-load funds and ETFs available.
Which Brokerage Costs More: Vanguard or E*Trade?
With no account minimum balance, zero commission fees on stocks and ETFs, and over 4,400 no-transaction-fee mutual funds, E*Trade is a discount, low-cost broker that thrives on DIY investor accounts. For options traders, you’ll pay no base commission plus a $0.65 per contract. This is reduced for higher-volume traders.
The only fees assessed by E*Trade include a full transfer out fee of $75 or a $25 fee for a partial transfer. You can trade in stocks, bonds, mutual funds, ETFs, options, and futures.
All of their tools are free to use, and there is no tiered support. You can always check E*Trade’s website for current promotions that may include cash credits with a qualifying deposit.
Vanguard is still pretty old school when it comes to fee schedules and costs. This is mainly because the brokerage is concerned with long-term investments and retirement accounts. Traders must pay $7 for stock and ETF trades.
Options include a base of $7 plus $1 per contract. These costs go up for account balances under $50,000. However, if you have a higher account balance of over $500,000, investors do not pay as much, lowering their fees down to $2 per trade.
Vanguard and E*Trade are tricky to compare since they have a completely different approach to investing.
As far as retirement planning and long-term investing, you get solid investment tools and retirement goal-setting with Vanguard.
However, just about everything else falls short. There is a lack of educational resources, tools, and risk analysis within Vanguard’s platform, and E*Trade has made a name for itself by offering more free tools and educational courses to its investors.
Ultimately, if you are a DIY investor or beginner investor who wants to take a more active approach to stock and ETFs, then E*Trade will better serve you.
The lack of streaming quotes and real-time data with Vanguard is truly dissatisfying and would frustrate most investors. In addition, E*Trade is more cost-effective and allows you to set up trades easily online or on mobile.
Have you used both Vanguard and E*Trade to manage your portfolio? Please share your thoughts in the comments below.