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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.
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 |
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.
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 |
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.
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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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.
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.
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.
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.
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%.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
Fidelity disclosure
Fractional share quantities can be entered out to 3 decimal places (.001) as long as the value of the order is at least $1.00. Dollar-based trades can be entered out to 2 decimal places (e.g. $250.00)
Robinhood disclosure
All investments involve risk and loss of principal is possible.
Securities are offered through Robinhood Financial LLC, member FINRA/SIPC. Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (NMLS ID 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Trades of stocks, ETFs and options are commission-free at Robinhood Financial LLC. Other fees may apply. Please see Robinhood Financial’s Fee Schedule to learn more.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is an account offering premium services available for a $5 monthly fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used. Bigger Instant Deposits are only available if your Instant Deposits status is in good standing.
E*TRADE services are available just to U.S. residents.
Vanguard disclosures
Visit vanguard.com to obtain a prospectus or, if available, a summary prospectus, for Vanguard and non-Vanguard funds offered through Vanguard Brokerage Services. The prospectus contains investment objectives, risks, charges, expenses, and other information; read and consider carefully before investing.
Options are a leveraged investment and are not suitable for every investor. Options involve risk, including the possibility that you could lose more money than you invest. Before buying or selling options, you must receive a copy of Characteristics and Risks of Standardized Options issued by OCC. A copy of this booklet is available at theocc.com. It may also be obtained from your broker, any exchange on which options are traded, or by contacting OCC at 125 S. Franklin Street, Suite 1200, Chicago, IL 60606 (888-678-4667 or 888-OPTIONS). The booklet contains information on options issued by OCC. It is intended for educational purposes. No statement in the booklet should be construed as a recommendation to buy or sell a security or to provide investment advice. For further assistance, please call The Options Industry Council (OIC) helpline at 888-OPTIONS or visit optionseducation.org for more information. The OIC can provide you with balanced options education and tools to assist you with your options questions and trading.
Commission-free trading of Vanguard ETFs applies to trades placed both online and by phone. All ETFs are subject to management fees and expenses; refer to each ETF's prospectus for more information. Account service fees may also apply. All ETF sales are subject to a securities transaction fee. See the HYPERLINK "https://investor.vanguard.com/investing/transaction-fees-commissions/etfs" Vanguard Brokerage Services commission and fee schedules for full details.
Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and are not protected by SIPC. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC.
Vanguard Marketing Corporation, Distributor of the Vanguard Funds