Online Stock Brokers: Vanguard vs. Capital One

You don't need a suit and tie or a ticket to Wall Street to start making investments. In fact, online brokers such as Vanguard and Capital One make it possible to open a brokerage account and bring Wall Street to your living room. Selecting a broker is an important step, so let's compare how Capital One and Vanguard stack up on criteria that are important for do-it-yourself investors.

Trading costs and commissions

Vanguard and Capital One both offer low-cost commissions on everything from stocks to options and ETFs. Here's how their standard published commissions compare.

Data source: company websites.

There's one thing you should know about commissions: You might pay much less than the standard rate. Vanguard cuts commissions for investors who have at least $50,000 in its ETFs and mutual funds. Capital One's Sharebuilder program allows you to make trades that are not time sensitive for just $3.95, while its PortfolioBuilder option can be used to buy a whole portfolio of stocks, ETFs, and mutual funds for a flat rate of just $18.95.

Signing up for a new account can have its perks. Commission-free trades and cash bonuses are plentiful for investors who want to open an IRA account, for example.

Commission-free ETFs and NTF funds

If funds are more your style, you'll be pleased to find that Vanguard and Capital One offer funds that you can buy and sell without paying a commission.

Data source: company websites.

Depending on your needs, you can make a case for either broker. Vanguard has a bigger collection of commission-free ETFs and no-transaction-fee (NTF) mutual funds. But if a particular fund isn't on its "good" list, then you'll pay a higher commission to buy and sell than you would at Capital One.

Account minimums

We'll cut to the chase: Vanguard and Capital One have no minimum account requirements. If you can scrape together some pocket change, you have enough money to open up a brokerage account with Vanguard or Capital One (or both!).

Truthfully, practical minimums are a little bit higher than a single dollar. You'll want to deposit enough money to buy at least one share of a stock, ETF, or mutual fund to make an investment.

You can get started with just pocket change at Vanguard and Capital One. Image source: Getty Images.

Trading platform

We at The Motley Fool believe that investors do best when they think and invest for the long haul. Therefore, we don't do much trading and don't really have an opinion on the bells and whistles that are part of many trading platforms.

If long-term investing is your style, you'll find that Vanguard and Capital One make it simple enough to log in to make the infrequent trade. As the "quality" of a trading platform tends to be more of a subjective opinion than an objective comparison, we'll leave this up to you.

International stocks and ADRs

Want to go global? You're in luck. Investors who want to invest in foreign companies can invest in American depositary receipts (ADRs) through Vanguard or Capital One.

However, if you want to trade directly on foreign stock exchanges, Vanguard has the advantage. Its clients can trade on international markets through Vanguard's block-trading desk, but it comes at a higher cost -- you'll pay a $50 fee on top of a commission. Capital One doesn't allow for trading directly on international stock exchanges.

Research quality and tools

Access to research and investment ideas is a great perk of having a brokerage account. Vanguard and Capital One both deliver here with screening and portfolio analysis tools.

Vanguard offers access to Standard and Poor's, Thomson Reuters, and First Call news and research. Capital One provides investors with ample third-party research, and uses data from Morningstar to keep you informed about your investments. Depending on your personal needs, either broker could be a great fit for its research capabilities.

Mobile app ratings

Mobile apps enable you to trade from anywhere as a Vanguard or Capital One customer. Here's how each brokers' users and clients rated their mobile capabilities on iOS and Android (as of Dec. 6, 2016).

Data source: relevant app stores.

Vanguard vs. Capital One: Picking a favorite

Long-term investors will find plenty to like as customers of either broker. Vanguard offers international stock trading, and more commission-free funds, but its standard commissions are higher than Capital One. Capital One's Sharebuilder and PortfolioBuilder options might be advantageous for some investors, but fund investors might want a bigger selection of fee-free funds.

Ultimately, the decision comes down to what's important to your investment process. To be clear, The Motley Fool doesn't endorse any particular broker. But we can make picking a broker a little easier. See our Broker Center, which compiles important features and limitations of some of the most popular brokers. If you'd like to invest in an IRA, see current special offers for IRA accounts, many of which include cash bonuses and commission-free trades as an incentive to sign up.