There's more to picking an online stockbroker than just costs and commissions. Here's how Vanguard and Ally Invest compare on features that are important to long-term investors.
When you're ready to start making investments for the future, you'll need to open up a brokerage account to place your trades. Two well-known online discount brokers, Vanguard and Ally Invest, make buying stocks, funds, and ETFs a snap.
Below, we'll see how Vanguard and Ally Invest compare across several key factors like commissions, international stocks, and account minimums to help you determine which broker better fits the needs of your portfolio.
Vanguard vs. Ally Invest: At a glance
| Offer | Vanguard | Ally Invest |
|---|---|---|
| Rating | Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. |
| Commissions | $0 online; $25 broker-assisted fee for some phone trades of stocks and ETFs from other companies (Less than $1 million) | $0 stock and ETF trades |
| Account Minimum | $0 | $0 |
| Next Steps | Read Review | Read Review |
Trading costs and commissions
| Broker | Stocks and ETFs | Options | Mutual Funds |
|---|---|---|---|
| Vanguard | $0 per online trade | Up to $1 per contract | $0 for Vanguard and no-transaction fee mutual funds, up to $20 for other mutual funds |
| Ally Invest | $0 | $0.50 per contract | $0 for no load mutual funds; load mutual funds are subject charges by the fund |
Data source: Vanguard and Ally Invest.
As you can see, both brokers have joined in with most other online brokers in offering commission-free stock trading. Note that this only applies to online trades -- if you make a trade through the broker's automated phone system or with the assistance of a real, live broker, you should expect to pay some type of commission.
For options and mutual funds, neither broker is particularly expensive. And both offer a wide range of mutual funds without commissions.
Trading mutual funds
Mutual fund investors can further reduce their trading costs by investing in ETFs and mutual funds that are designated commission-free or no-transaction-fee (NTF). Vanguard and Ally Invest both provide clients with thousands of mutual funds that can be bought and sold fee-free.
| Broker | NTF Mutual Funds |
|---|---|
| Vanguard | More than 3,000 (including all Vanguard funds) |
| Ally Invest | About 5,500 |
Data source: Vanguard and Ally Invest.
If funds are important to you, Vanguard and Ally Invest both offer thousands of NTF mutual funds. Ally also offers hundreds of commission-free ETFs through partnerships with Vanguard and other investment managers. Even though Ally offers a larger number of funds, Vanguard might be a better choice for most mutual fund investors who don't want to do a lot of hands-on trading.
Account minimums
You can open an account at Vanguard or Ally Invest with just a few dollars. Both brokerages are no-minimum brokers, meaning that you won't have to meet large initial deposit requirements just to open an account.
Keep in mind that some brokers give you cash bonuses, commission-free trades, added research capabilities, and other perks for keeping a higher balance. These are always changing, so keep an eye on our updated list of offers from the best online stock brokers. You might consider making a larger initial deposit if you could collect a big bonus or score some commission-free trades.
It's also worth noting that many mutual funds have minimum initial investment requirements, so while you can open an account with any amount of money, be sure to check the minimums for any mutual funds you're interested in.
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Trading platform
We have a confession to make: We're long-term investors, not traders. Therefore, we tend to spend more of our time holding stocks rather than trading them, and we don't have a particularly strong opinion about trading platforms.
As with operating systems or soft drinks, we tend to think that the debates about which broker has the best platform mostly comes down to personal preference and opinion. If the bells and whistles of a trading platform are important to you, we'd suggest trying out a broker's demo account to see how it fits you. Because, ultimately, different trading or investing styles require different features.
Vanguard has a simple, user-friendly platform that is well suited to most long-term investors. Ally Invest has an award-winning trading platform that could be a better fit for active traders who want to buy individual stocks or make more complex investments.
One of the best parts of having a brokerage account is getting supplemental research to help you make good investment decisions. Vanguard customers have access to a wide range of research, market news, insights, and commentary so you can see Vanguard's latest guidance on where the markets might be heading and how to adapt your portfolio.
Ally Invest offers extensive research, analysis, charts, and other tools like the TipRanks Smart Score to help investors make decisions and find stocks that might have the best chance of outperforming the market. Depending on your personal needs, you could find either brokerage provides ample research to fit your investment style.
Better online stock broker: Vanguard or Ally Invest?
Truly, you could make the case for either brokerage being the "better" broker, because it's all dependent on your personal portfolio. Ally Invest has a robust trading platform, lower published commissions for options, and offers thousands of no-transaction-fee mutual funds. Vanguard has higher commissions on options and on any mutual funds that don't trade on an NTF basis, and offers a vast list of no-transaction-fee mutual funds. Ultimately, it's about how a broker's services fit within the puzzle of your personal portfolio.
The Ascent's best stock brokers
Uncover the names of the select brokers that landed a spot on The Ascent's shortlist for the best online stock brokers. Our top picks pack in valuable perks, including some that offer $0 commissions and big bonuses.
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Alternatives to Consider
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
| Account | Fees | Account Minimum | |
|---|---|---|---|
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, ETFs, and options | $0 | Open Account for Robinhood |
Rating image, 5.0 out of 5 stars. 5.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 commission for online U.S. stock and ETF trades; trade fractional shares for as little as $1 | $0 | Open Account for Fidelity |
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Commission-free; other fees apply | $0 | Open Account for E*TRADE |
FAQs
Vanguard is designed for low-cost investing. The average Vanguard fund (mutual funds and ETFs) has an expense ratio of only 0.09% -- 83% lower than the industry average, and each fund's costs are paid directly from the fund's returns. Vanguard is also owned by the people who own its funds, which helps you save money.
Ally Invest offers personal advice from a dedicated advisor. This service requires a minimum of $100,000 of assets with Ally, and an annual fee of 0.75%-0.85%. Vanguard offers Vanguard Personal Advisor®, a combination of automated investments with help from a real human advisor when you need it. This Vanguard service requires a minimum of $50,000 of assets, and an annual fee of about 0.30%.
