Vanguard or Etrade?

Question

Hi,

I'm thinking about buying a Vanguard mutual fund and my current broker is E-Trade. The same fund is also offered @ E-Trade. Should I buy the fund directly with my broker or open a new account with Vanguard? I guess I'm trying to find out if I can save or have any advantage if I open the account with Vanguard since they are managing their own fund?

The same thing goes to whether I should open my IRA with E Trade or Vanguard since I heard a lot of people saying good things about Vanguard. Appreciate any feedback.

Thanks,

Stanley

Answer 1

Vanguard charges a straight $20 per fund that you hold if your balance in that fund is less than $10,000. If you agree to receive all communications via email instead of through the mail, they waive that fee.



They do not charge for trades.



If you plan to invest in mutual funds, I would definitely open a Vanguard account.



I would open an IRA with Vanguard if you plan to invest in index funds; but if you plan to trade in and out of individual stocks, then you should go with eTrade or other online broker. Vanguard charges a high fee for individual stock trades, which they conduct through a third party.



I would never advise anyone to buy individual stocks for an IRA; given the timeframe for this type of investment, index funds like Vanguards Total Stock Market will always outperform a portfolio of individual stocks.

Answer 2

Usually you maybe better off buying the Fund from Vanguard directly instead of going thorugh a broker like ETrade. This saves you money as ETrade may charge you (approx $35-50) to buy a mutual fund. But there is a simplicity factor as well about having all your investments in 1 place.

For me, it doesnt matter. I usually prefer to buy direct as this saves money and you can monitor any/all funds thorugh sites like Yahoo Finance anyway.

Regarding IRA, if you are going to buy all the funds/stocks for your IRA from Vanguard then it makes sense to open an IRA with them. Keep in mind that Vanguard charges money to buy Non-vanguard funds (Vanguard funds are free except for the expense charges), so you end up doing the same as ETrade.

Vanguard has a very good website and don't hesitate to open an account with them if you go thorugh that route.

Good luck!

Answer 3

There is some difference. Take Vanguard Total Stock Market Index fund. There are VTSAX and VTSMX. They are the same portfolio but with different expense ratio. VTSAX is admiral class with higher initial required amount but with lower expense ratio. Etrade only has VTSMX. You need to buy VTSAX at Vanguard. So, you have high amount to invest, go to Vanguard.

Answer 4

Cut out the middle man -- Go directly to Vanguard.. Also I would look at TR Price and American Century as they also have very low fees (no front end or back end loads) and some really good funds for both regular and IRA accounts... I would also consider opening a ROTH IRA (a ROTH is purchased using AFTER tax dollars) versus the traditional one (before tax dollars) as you will save a lot of future taxes.

Answer 5

If you want to invest in Vanguard mutual funds, open an account with Vanguard to avoid the fee you pay to E-Trade.



Open an IRA with Vanguard. The mutual funds are dirt cheap.

Answer 6

vanguard etrade

Answer 7

Etrade Ira Fees

Answer 8

As long as you buy it yourself on line there is no fee through e-trade so I would do that just to keep all your cash in the same place for ease of accounting and gains tracking. I have enclosed the link to e-trade so you can view the fees and commission structure.

Answer 9

Maybe, but I'm not 100%

Answer 10

Sound arguments here.