Automatic Investment Plan at Vanguard: Important Notes
• Vanguard investors can enroll mutual funds in the firm’s AIP (Automatic Investment Plan).
• Only Vanguard-branded mutual funds are eligible for recurring purchases and sales. Non-Vanguard funds and other securities, like stocks, cannot be enrolled.
• Vanguard’s AIP is a form of dollar-cost averaging, which can be used to grow an investment over time.
Traders at Vanguard who frequently enter purchase or sell orders for Vanguard mutual funds can save themselves some time and headache by turning these transactions on autopilot. Here’s how to get started:
Synopsis of Systematic Purchases at Vanguard
Vanguard permits recurring purchases and sales of mutual funds that carry the Vanguard brand. All other securities are ineligible for the Automatic Investment Plan.
To find a list of Vanguard mutual funds, log into the website and click on the Products & Services tab in the top menu. In the drop-down list of choices, select the link for mutual funds.
On the next page, you’ll see a blue link for Vanguard funds. Click on this and you’ll get a list of 383 results. It can be sorted and filtered by all sorts of criteria. A fund must be held in an account before it can be enrolled in Vanguard’s AIP, so it’s important to buy one of these funds first.
Signing Up for Vanguard’s AIP
Although Vanguard doesn’t always have the best digital tools in the brokerage world, enlisting for its Automatic Investment Plan is pretty straightforward thanks to its web-based AIP form. To find this sign-up point, click on the Transact tab in the top menu on the website and select the link for automatic investments.
On the next page, you’ll have the AIP form. Select the Investments tab on the form to set up a recurring-purchase schedule or the Withdrawals tab for recurring sales. Next, click on the button to add a new automatic transaction.
On the purchase side, the AIP form has four frequencies:
- Every month
- Every week
- Every 2 weeks
- Twice each month
The form includes two choices for the funding source: an external bank account or the account’s settlement fund. Start and stop dates need to be added along with the investment amount. Because the online form automatically includes the funding source, there’s no need to separately establish recurring deposits into the account to pay for future purchases.
A single purchase with a single debit from the funding source can be split among two or more funds. Percentages can be listed on the AIP form for the various funds; there’s also a choice to split the amount equally among all enrolled funds.
On the sell side, there are four frequencies:
- Every month
- Every quarter
- Every six months
- Every year
Proceeds from sales can be moved into an external checking or savings account or a Vanguard brokerage account (including a Vanguard IRA as a contribution).
Vanguard Comparison
Cost of Vanguard’s AIP
Vanguard does not impose any surcharges or fees for its Automatic Investment Plan. Most Vanguard funds have no transaction fees, either, although a few do, and these will be subject to transaction fees on AIP transactions.
Vanguard Dollar-Cost Averaging
Because a whole-dollar amount is used to make purchases in Vanguard’s AIP, it is a form of dollar-cost averaging. This is a philosophy in the financial world that attempts to remove market timing from investing. Because a fixed amount is used on a recurring basis, there is no need to time the market. A whole-dollar amount is used to make recurring investments regardless of what the market is doing. Thus, everything is on autopilot, and volatility really is a non-issue because the investment schedule doesn’t change.
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Updated on 4/10/2025.
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