E*Trade versus Vanguard: compare IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better?

Overview of Vanguard and E*Trade

Vanguard and E*Trade both give discounts to people with big accounts and to frequent traders. Other than that, they are quite different. Before you choose between them, make sure you know these differences:

Comparison Table

Range of Financial Instruments

With Vanguard, you can trade bonds, stocks, options, CDs, ETFs, and mutual funds. These can be used in several account types, such as IRAs, individual 401(k)s, 529 education accounts, and UGMA/UTMA accounts.

E*Trade customers can trade ETFs, bonds, stocks, options, mutual funds, and futures. Futures trading gives E*Trade an advantage here. E*Trade also gives access to IPOs, which Vanguard does not.

For account types, E*Trade has IRAs, Coverdell savings accounts, custodial accounts, and self-employed 401(k) plans. It does not offer 529 plans or UGMA/UTMA accounts.

Managed Portfolios

If you want professional help managing your investments, both Vanguard and E*Trade have options. You can pay a small fee to let the firm handle your investments.

E*Trade has several choices. The first is a robo-advisor that uses software to buy and sell ETFs. It costs 0.30% (free for the first year) with a $5,000 minimum. If you want a human advisor, you pay a higher fee, but you get more help. Human advisors can use bonds, stocks, and mutual funds, and you’ll get a personal plan for your taxes. Fees range from 0.65% to 1.25%, and the minimum is $25,000.

Vanguard has just one option: a human advisor for a 0.30% fee, the same as E*Trade’s robo program. However, Vanguard doesn’t have physical locations, so there’s no in-person meeting. E*Trade has 30 offices, so you can meet face-to-face if needed. Vanguard’s minimum is $50,000.

Mutual and Exchange-traded Funds

Both firms have good selections of mutual funds and ETFs. On E*Trade’s website, we found 8,445 mutual funds open to new investors, with over 4,200 having no load or transaction fee. Vanguard gives access to about 7,100 mutual funds, and fewer than 3,000 have no load and no transaction fee.

We like E*Trade’s mutual fund resources better. Its screener is easier to use, and it has a special list called All-Star Funds—149 funds picked by E*Trade’s analysts as good picks. This list is free for E*Trade customers.

Both firms now offer all ETFs commission-free.

Banking Features

If you plan to keep cash in your brokerage account, you’ll want to know how each firm handles this. Vanguard has a brokerage-deposit account called VanguardAdvantage. It lets you write checks and use a debit card, but there’s a $30 yearly fee. ATM withdrawals at PNC bank are free, but you need $500,000 in assets to open this account.

E*Trade offers two checking accounts and one savings account. The savings account pays 2.1% APY, and the checking accounts come with checks and a debit card. The Max-Rate Checking account gives unlimited ATM fee rebates, but has a $15 monthly fee (waived with a $5,000 balance). You need $100 to open a checking account.

Trading Software

If you want to manage your own trades, good trading tools matter. E*Trade has a modern website, though it doesn’t have a trade bar. Its charting tools are very advanced.

You can trade using simple web pages with many order types and real-time data. E*Trade’s Power platform, which works in your browser, has features like multi-leg options strategies, Bloomberg news, an economic calendar, and portfolio analysis.





E*Trade also has desktop software for active traders. It provides Level II quotes, time & sales, direct market access, market movers, and advanced options analysis. You can use several charts at once.

Vanguard does not have a browser platform or desktop system. Trades are done on its website, which is harder to use than E*Trade’s.

Mobile Trading

Both brokers offer mobile trading. E*Trade has two apps. Power E*Trade is similar to its desktop platform and includes multiple watchlists, market indexes, Level II quotes, option chains (including multi-leg trades), and futures trading. While its charting isn’t the best, the regular E*Trade app has better charting, lets you turn your phone sideways for charts, and streams Bloomberg News in HD for free.





Vanguard has only one app and no video news. You can’t trade options on it, but it does let you deposit checks and transfer money. A nice feature is that you can download your statements as pdf files.

Customer Service

Customer service is important. E*Trade has phone support 24/7. It also has human chat support and several branch locations for in-person help.

Vanguard does not have 24/7 support or weekend hours. The website has no chat, and there are no physical branches.

Recommendation

For mutual fund investors, we suggest E*Trade.

Traders who want the best tools should pick E*Trade.

If you care about customer service, E*Trade is better.

Retirement savers will do fine with either firm.

Bargain seekers should consider the $0-commission Firstrade.

Vanguard vs E*Trade Summary

Vanguard and E*Trade both offer a lot of services, but their features and prices differ. With this information, you should be able to choose the right one for you.

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