Vanguard vs Schwab: Fees, Funds and Cash Compared
Quick answer
Vanguard and Charles Schwab both charge $0 commission on online US stock and ETF trades with no account minimum. Vanguard treats idle cash better by default, sweeping it into the VMFXX money market fund, while Schwab offers broader fractional shares, the thinkorswim platform and no account service or transfer-out fees.
Vanguard vs Charles Schwab at a glance (figures verified July 2026)
| Fact | Vanguard | Charles Schwab |
|---|---|---|
| Online US stock and ETF commission | $0 | $0 |
| Options fee | $1 per contract (accounts under $1 million) | $0.65 per contract |
| Account minimum | $0 | $0 |
| Annual account service fee | $25, waived with e-delivery of documents or $5 million-plus in qualifying assets | None |
| Flagship S&P 500 index fund | VFIAX, 0.04% expense ratio, $3,000 minimum (or the VOO ETF at 0.03%, no minimum via fractional shares) | SWPPX, 0.02% expense ratio, no minimum |
| Fractional shares | From $1, but Vanguard ETFs only; other stocks and ETFs need a full share | From $1 on most US stocks and ETFs since June 2026 (previously S&P 500 stocks only, $5 minimum) |
| Default treatment of uninvested cash | Settlement fund is the VMFXX money market fund (about 3.5% 7-day yield as of 2 July 2026, per Morningstar data) | Bank sweep paying 0.05% or less per 2026 reporting; money market funds like SWVXX (about 3.5% in early July 2026) must be bought manually |
| Full account transfer-out or closure fee | $100 unless you hold $5 million-plus in qualifying Vanguard assets (introduced July 2024) | None |
| HSA for individuals | No | No retail HSA |
| Robo-adviser | Vanguard Digital Advisor | Schwab Intelligent Portfolios |
| Flagship trading platform | Deliberately minimal website and app | thinkorswim (inherited from TD Ameritrade) |
| Company scale | About $11.6 trillion managed globally (30 September 2025) | About $11.8 trillion in client assets (2026 reporting) |
Vanguard vs Schwab pits the company that invented retail index investing against the company that invented the discount brokerage, and on price the fight ended in a draw years ago: $0 online US stock and ETF trades, no account minimums, and in-house index funds charging 0.04% or less at both. Every figure on this page was verified against provider fee schedules and dated 2026 sources in July 2026, and the numbers that move daily (cash yields, asset totals) are date-stamped snapshots.
The sharpest single difference is cash. Vanguard's brokerage settlement fund is VMFXX, a money market fund yielding about 3.5% as of 2 July 2026, so uninvested dollars earn a market rate by default. Schwab's default bank sweep paid 0.05% or less per 2026 reporting; the roughly 3.5% available in Schwab money market funds such as SWVXX requires buying them yourself. In the other direction, Schwab charges none of Vanguard's housekeeping fees: no $25 annual account fee, no $100 full transfer-out or closure fee, and since June 2026 it sells fractional shares of most US stocks and ETFs from $1, where Vanguard's dollar-based investing covers Vanguard ETFs only.
On funds, the irony is that you do not need Vanguard the broker to own Vanguard the funds. VOO and VTI trade free at Schwab (and fractionally since June 2026), while Vanguard mutual funds such as VFIAX cost $74.95 per online purchase there, on 2026 fee schedules, and carry a $3,000 minimum at Vanguard itself. Schwab's own SWPPX charges 0.02% with no minimum at all. The whole S&P 500 fund field is lined up in our S&P 500 index fund guide, and the mutual fund versus ETF question in index funds vs mutual funds vs ETFs.
Searches for Vanguard vs Fidelity vs Schwab usually end in the same place: all three are excellent low-cost brokers, and for most long-term index investors any of the three works. Vanguard suits set-and-forget investors happy with a spartan interface; Schwab suits people who want stronger tools, thinkorswim included, and no account fees; Fidelity, covered in Fidelity vs Vanguard and Fidelity vs Schwab, blends most of both and adds the only retail HSA. If the real question is what to buy once the account is open, start with our best index funds for beginners, and find the rest of our US reference pages at the US guides hub. This page is general information, not personal investment advice: the value of anything you invest through either broker can fall as well as rise.
Frequently asked questions
Is Vanguard better than Charles Schwab?
Neither is better outright; the headline costs are identical at $0 per online stock or ETF trade with no account minimums. Vanguard defaults idle cash into a money market fund yielding about 3.5% in early July 2026, which Schwab does not. Schwab counters with wider fractional shares, no account service or transfer-out fees, and the thinkorswim platform. For most long-term index investors, either works.
Which is best: Vanguard, Fidelity or Schwab?
All three charge $0 for online US stock and ETF trades and run index funds costing 0.04% a year or less, so there is no wrong answer on cost. The edges: Fidelity has the cash sweep, zero-fee funds and the only retail HSA; Schwab has thinkorswim and the fewest account fees; Vanguard has the definitive ETF range and a strong default settlement fund. Our Fidelity vs Schwab and Fidelity vs Vanguard guides cover the other two pairings.
What is the downside of Vanguard compared with Schwab?
Friction. Vanguard fractional shares cover only Vanguard ETFs, VFIAX and most Vanguard index mutual funds need $3,000 to start, there is a $25 annual account fee unless you take e-delivery, and a $100 fee applies to close or transfer out a whole account unless you hold $5 million-plus. Schwab has none of those charges, and its platform is far stronger for anyone who trades more than occasionally.
What is the downside of Schwab compared with Vanguard?
Cash. Schwab default bank sweep paid 0.05% or less per 2026 reporting, so uninvested dollars earn close to nothing unless you manually move them into a money market fund such as SWVXX, which yielded about 3.5% in early July 2026. Vanguard does this automatically through its VMFXX settlement fund. A fully invested indexer barely notices; anyone who parks cash between purchases will.
Can I buy Vanguard ETFs at Schwab?
Yes. Vanguard ETFs such as VOO and VTI trade commission-free at Schwab like any other ETF, and since June 2026 they can be bought fractionally from $1. Vanguard mutual funds are the exception: Schwab charged $74.95 per online purchase on 2026 fee schedules, so most people at Schwab simply buy the equivalent ETF share class or Schwab own index funds such as SWPPX instead.
Is Vanguard or Schwab better for a Roth IRA?
The wrapper terms match: no minimum to open, $0 online trades, identical IRS contribution limits. The practical differences are the same as for any account here, which are Vanguard fund minimums and account fees versus Schwab near-zero default cash rate. Both offer a robo option, Vanguard Digital Advisor and Schwab Intelligent Portfolios, if you would rather not pick funds. This is general information, not personal advice.
Sources
- Vanguard - brokerage commission and fee schedules ($0 online trades, $25 account service fee, options pricing)
- Vanguard - dollar-based investing (fractional shares of Vanguard ETFs)
- Charles Schwab - pricing
- Charles Schwab press release, 2 June 2026 - fractional trading expanded to most US stocks and ETFs at a $1 minimum
- Brokerage-Review - Charles Schwab cash sweep rates (checked 2 June 2026)
- Morningstar - VMFXX, Vanguard Federal Money Market Fund (yield checked 2 July 2026)
General information, not financial advice. Tax rules and figures can change; check the current position on irs.gov or ssa.gov before acting.