Vanguard Review (2026)
Vanguard suits buy-and-hold investors who mainly own Vanguard funds and ETFs and rarely trade. The one thing to know: idle cash goes to a money market settlement fund (VMFXX, 3.82% 7-day SEC yield on October 16, 2026), but closing or fully transferring an account costs $100, and each account pays $25 a year unless you choose e-delivery. Stocks and ETFs trade for $0 online, and options cost $1 a contract.
By Wealthy Pot Editorial · Facts checked October 19, 2026
Facts checked October 19, 2026 against Vanguard's own fee schedules, rate pages, disclosures and regulator records (11 sources, listed below). We re-check prices about once a month. We do not earn a commission from Vanguard.
Vanguard at a glance
| Stocks and ETFs | $0 online; $25 broker-assisted when Qualifying Assets are under $1 million [1] |
|---|---|
| Options | $0 + $1 per contract, online or broker-assisted, under $1 million in Qualifying Assets; exercise and assignment $0 [1] |
| Mutual funds | Vanguard funds $0 online; transaction-fee funds $20 online under $1 million; non-Vanguard funds sold within 60 days: $50 early redemption fee [1] |
| Account minimum | $0 to open an account [2] |
| Fractional shares | Dollar-based trades in Vanguard ETFs and mutual funds, from $1; not in individual stocks or other companies' ETFs [3] |
| Account types | Brokerage accounts and IRAs (the fee schedule covers both); we did not confirm the full list [1] |
| Cash (settlement fund) | Default: Vanguard Federal Money Market Fund (VMFXX); alternative: Vanguard Cash Deposit, FDIC eligible [5] |
| VMFXX yield | 3.82% 7-day SEC yield on October 16, 2026 [6] |
| Margin | 12.25% up to $19,999, 10.75% at $100,000 to $249,999; base rate 9.75%, changed September 18, 2026 [4] |
| Closing or transferring out | $100 per account closure or full transfer out; waived at $5 million in Qualifying Assets [1] |
| Annual fee | $25 per account a year, waived with e-delivery of statements and documents or $1 million in Qualifying Assets [1] |
| Foreign shares | $50 processing fee for foreign securities that are not DTC eligible (ADRs excluded) [1] |
| Payment for order flow | No; Vanguard Brokerage Services says it receives none (Q2 2026 Rule 606 report) [7] |
| Company | Vanguard Brokerage Services, a division of Vanguard Marketing Corporation (CRD 7452), Malvern, PA; parent The Vanguard Group, private [8] |
What a year at Vanguard costs
| Situation | Cost or interest | How we got it |
|---|---|---|
| Open and close a 10-contract options trade, twice a month for a year | $480 | $20 a round trip x 24. |
| $10,000 left uninvested for a year | $382 earned | Vanguard Federal Money Market Fund (VMFXX), the settlement fund at 3.82% 7-day yield, if the rate held all year. |
| Borrow $10,000 on margin for a year | About $1,225 | 12.25% a year on a $10,000 balance; 10.75% at $100,000. Interest accrues daily, so the exact figure varies a little. |
| Move the whole account to another broker | $100 | Full outgoing transfer (ACATS). |
Hypothetical examples, our arithmetic from Vanguard's published fees, cash rate (as of October 16, 2026) and margin rates (as of October 19, 2026), read on October 19, 2026. Broker commissions and the broker's own per-contract fees only: the small SEC, FINRA, OCC and exchange fees passed through on sales and option trades are left out. Cash and margin rates move with the Federal Reserve's rate.
How Vanguard works
Vanguard's brokerage account is built around its own funds. Vanguard mutual funds trade online for $0, and Vanguard ETFs and mutual funds can be bought by dollar amount from $1. Individual stocks and other companies' ETFs trade for $0 too, but only in whole shares. Fees depend on your Qualifying Assets at Vanguard: under $1 million you pay $1 per options contract and $20 per transaction-fee fund trade; from $1 million to $4.99 million the first 25 options trades a year are free, and at $5 million and up the first 100.
Uninvested cash goes to a settlement fund. Vanguard Federal Money Market Fund (VMFXX) is the default, and Vanguard Cash Deposit, an FDIC-eligible option, is the alternative. VMFXX had a 3.82% 7-day SEC yield on October 16, 2026. The cost block below shows what that means on $10,000 left uninvested for a year, along with margin, options and the transfer fee. Our money market fund comparison sets VMFXX against other funds, and ETF vs index fund explains the choice between Vanguard's two fund formats.
Two account fees are easy to miss because they are charged per account. Hypothetically, an investor with a taxable account, a traditional IRA and a Roth IRA who keeps paper statements pays 3 x $25 = $75 a year in account service fees; switching to e-delivery makes it $0. If that investor later moves all three accounts to another broker, the processing fee is 3 x $100 = $300. Fidelity lists $0 for the same transfers.
Margin follows the same asset tiers. Under $1 million in Qualifying Assets, borrowing up to $19,999 costs 12.25% and $100,000 to $249,999 costs 10.75%. At $1 million to $4.99 million the rate drops to 7.00% on balances up to $499,999, and at $5 million and up it is 6.00% up to $999,999.
Pros
- Default settlement fund is a money market fund (VMFXX)
- Reports no payment for order flow
- Dollar-based buys of Vanguard ETFs and funds from $1
- Fees fall at $1 million and $5 million in Qualifying Assets
- Vanguard mutual funds trade online for $0
Cons
- $100 per account to close or transfer out
- $25 a year per account without e-delivery
- $1 per options contract under $1 million in assets
- No fractional shares of individual stocks
- Margin from 12.25% under $20,000
Who Vanguard fits, and who should skip it
A good fit if
- You buy Vanguard ETFs or mutual funds and want to invest set dollar amounts from $1.
- You want uninvested cash in a money market fund without picking one.
- You want a broker that reports no payment for order flow.
- You have $1 million or more at Vanguard, where options trades, wire and annual fees start to be waived.
Limitations to know
- The $100 processing fee applies to each account closure and each full transfer to another firm, unless you have $5 million in Qualifying Assets or use Vanguard's advisory services. Fidelity lists $0 for a transfer of assets. [11]
- Holding a master limited partnership in an IRA can trigger IRS Form 990-T filings, for which Vanguard Fiduciary Trust Company charges $500 per account. [1]
- Vanguard keeps 20% of any class action settlement money it recovers for you. [1]
- Depositing physical stock certificates costs $100 per CUSIP, and outgoing wires cost $10 unless they come from a retirement account or you have $1 million in Qualifying Assets. [1]
- The standard margin schedule we read stops at $499,999; for other balances Vanguard lists a phone number for rate availability. [4]
- We could not confirm extended-hours trading, platform list or phone hours from Vanguard's pages, so they are not listed here. [2]
Vanguard compared with alternatives
| Broker | Options per contract | Default cash rate | Transfer out | Fractional shares |
|---|---|---|---|---|
| Vanguard | $1.00/contract | 3.82% | $100 | Yes |
| Fidelity | $0.65/contract | 3.48% 7-day yield if you pick SPAXX (no default named) | $0 | Yes |
| Charles Schwab | $0.65/contract | 0.01% | $50 | Yes |
| Robinhood | $0 stock/ETF options; index options $0.50 ($0.35 with Gold) | 0% | $100 | Yes |
- Pick Fidelity if you want $0 to transfer out or close an IRA and options at $0.65 a contract.
- Pick Charles Schwab if you want fractional shares of most US-listed stocks and ETFs, plus futures.
- Pick Robinhood if you trade stock and ETF options and want $0 per contract.
Security and privacy
- Vanguard says VMFXX held in a brokerage account is eligible for SIPC coverage up to $500,000. We did not find an excess-SIPC policy on the pages we read. [5]
- Vanguard Cash Deposit, the other settlement option, is eligible for FDIC insurance up to $1.25 million for individual accounts and $2.5 million for joint accounts. [5]
- In January 2025 the SEC announced that The Vanguard Group would pay $106.41 million, including a $13.5 million civil penalty, over misleading statements about capital gains distributions from its Target Retirement Funds. BrokerCheck records related state settlements totalling $166.7 million. [10]
- In September 2026 FINRA fined Vanguard Marketing Corporation $950,000 over inaccurate cost-basis information on statements, confirmations and 1099s from 2012 to 2023; the firm had already paid about $1.9 million to customers. In May 2023 FINRA fined it $800,000 for overstating estimated yield and annual income for money market positions on about 8.5 million statements. [9]
- We could not read Vanguard's security guarantee or two-factor sign-in options, so they are not listed here. [2]
Recent changes
| Date | What changed |
|---|---|
| Sep 29, 2026 | Margin rate schedules changed. [4] |
| Sep 18, 2026 | Margin base rate changed to 9.75%. [4] |
| Jul 10, 2026 | Current commission and fee schedule took effect, including the $100 closure and full-transfer fee and the $25 annual account service fee. [1] |
Vanguard FAQ
Is Vanguard safe?
Vanguard Brokerage Services is a division of Vanguard Marketing Corporation, a FINRA-registered broker-dealer (CRD 7452). Vanguard says VMFXX in a brokerage account is eligible for SIPC coverage up to $500,000, and Vanguard Cash Deposit for FDIC insurance up to $1.25 million per individual account. Vanguard has paid regulators, including $106.41 million in the SEC's January 2025 Target Retirement Fund case.
Does Vanguard charge for options?
Yes. Under $1 million in Qualifying Assets, options cost $0 plus $1 per contract, online or by phone. From $1 million to $4.99 million the first 25 trades a year are free, and at $5 million and up the first 100. Exercises and assignments are free.
What does Vanguard pay on cash?
Uninvested cash goes to the default settlement fund, Vanguard Federal Money Market Fund (VMFXX), which had a 3.82% 7-day SEC yield on October 16, 2026. You can switch to Vanguard Cash Deposit; we could not read its rate.
Is Vanguard good for beginners?
For a beginner who buys Vanguard index funds or ETFs and holds them, yes on the numbers: $0 to open, $0 to trade Vanguard funds online, dollar-based buys from $1 and cash in a money market fund. Turn on e-delivery to avoid the $25 yearly fee. Our guide to <a href="/micro-investing-on-small-budget/">investing with little money</a> covers the first steps.
Vanguard vs Fidelity?
Both have $0 stock and ETF trades and a money market fund for cash. <a href="/brokers/fidelity/">Fidelity</a> charges $0.65 an options contract against Vanguard's $1, $0 to transfer out against $100, and offers fractional shares of NYSE and Nasdaq-listed stocks. Vanguard reports no payment for order flow; Fidelity takes it.
How do I transfer out of Vanguard, and what does it cost?
You start the transfer at the receiving broker. Vanguard may charge a $100 processing fee for each account you close or fully transfer, unless you have $5 million in Qualifying Assets or an advisory account. Bank transfers of cash are not charged this fee.
How we researched this review
We did not get paid or receive a free account for this page. We read Vanguard's own pricing page, help center, security and privacy pages and app-store listing on October 19, 2026, quoted each fact from those pages, and link every one below. We did not run a long-term hands-on test, so we do not score the app; where a point rests on what the company says rather than something we can check, we attribute it to Vanguard. Cost figures are our own arithmetic. We re-check prices and plans about once a month and log changes in the table above.
Sources
- Vanguard, Transaction fees and commissions (schedule effective July 10, 2026), checked October 19, 2026.
- Vanguard, Brokerage accounts, checked October 19, 2026.
- Vanguard, What is dollar-based investing?, checked October 19, 2026.
- Vanguard, Margin rates, checked October 19, 2026.
- Vanguard, Your settlement fund, checked October 19, 2026.
- Vanguard, Federal Money Market Fund (VMFXX) price and yield data, checked October 19, 2026.
- Vanguard Brokerage Services, SEC Rule 606 report, second quarter 2026 (FINRA copy), checked October 19, 2026.
- FINRA BrokerCheck, Vanguard Marketing Corporation (CRD 7452), checked October 19, 2026.
- FINRA BrokerCheck, Vanguard Marketing Corporation detailed report (PDF), checked October 19, 2026.
- SEC, Vanguard to pay $106 million over Target Retirement Fund disclosures (press release 2025-21), checked October 19, 2026.
- Fidelity, Commissions, margin rates and fees, checked October 19, 2026.
Head-to-head comparisons
This review is for general information, not investment advice. Investing involves risk, including loss of principal; margin and options can lose more than you put in. Fees and rates change; check the broker's own pages before you open or move an account.