Both are giants with $0 stock and ETF commissions. Vanguard is the low-cost index-fund home — average expense ratios around 0.08%, investor-owned — built for buy-and-hold simplicity; Fidelity matches the low costs but adds best-in-class research, full fractional shares, and a more modern platform. Pick Vanguard for a simple low-cost index portfolio, Fidelity for broader features and research. Educational comparison, not investment advice.
Fidelity Investments
Best all-around brokerage — no PFOF, $0 minimums, best-in-class research.
Pros
Vanguard
The index fund home — lowest-cost ETFs and mutual funds, owned by its investors.
Pros
Pick Fidelity Investments if: Investors of all experience levels who want commission-free trading with best-execution routing and a full suite of account types.
Pick Vanguard if: Long-term, buy-and-hold investors building a simple index portfolio who prioritize the lowest fund expense ratios.
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Both charge $0 commissions on U.S. stock and ETF trades and offer very low-cost index funds — Vanguard's average fund expense ratio sits around 0.08%, and Fidelity matches or undercuts it on comparable index funds (it even offers several zero-expense-ratio index mutual funds). For a simple buy-and-hold index portfolio, ongoing cost is effectively a wash; the decision comes down to platform and features. (Educational comparison, not investment advice.)
Fidelity is generally regarded as having the more modern platform, deeper research and screening tools, full fractional-share trading on stocks and ETFs, and a stronger mobile app. Vanguard's platform is more basic and built around long-term, buy-and-hold index investing rather than active trading or research. If you want broad features and research, Fidelity; if you want a no-frills low-cost index home, Vanguard. (Educational comparison, not investment advice.)
Many beginners find Fidelity easier to start with because of full fractional shares (you can buy a slice of any stock or ETF for a few dollars), a more intuitive app, and strong educational content. Vanguard suits someone who simply wants to buy a target-date or total-market index fund and hold it for decades. Both are reputable, low-cost, and well-capitalized — the gap is experience and features, not safety. (Educational comparison, not investment advice.)
Fidelity offers full fractional-share trading on U.S. stocks and ETFs — you can buy any position for as little as $1. Vanguard offers fractional shares for Vanguard-branded mutual funds and, as of recent updates, select ETFs, but the fractional ETF coverage is narrower than Fidelity's. For investors who want to build a diversified portfolio from a small starting amount (say, under $500), Fidelity's broader fractional access is meaningfully more convenient. SEC's investor.gov explains fractional share risks and mechanics. (Educational comparison, not investment advice.)
Both offer Traditional, Roth, and Rollover IRAs with no account fees and a full fund lineup. Fidelity's ZERO-expense-ratio index funds (FZROX, FZILX) carry $0 expense ratios within an IRA — though they are proprietary and can't be transferred in-kind to another broker. Vanguard's Target Retirement funds are widely used as set-it-and-forget-it IRA holdings with average expense ratios around 0.08%. Either works well; Fidelity has the edge if you want the broadest fund selection and lowest possible fund cost; Vanguard is the simpler choice for long-term, passive, one-fund IRA holders. IRS rules on IRA contributions at irs.gov. (Educational comparison, not investment advice.)
Uninvested cash in a Fidelity brokerage account sweeps into the Fidelity Government Money Market Fund (SPAXX) or FDIC-insured bank sweep, depending on your account settings — some options currently yield 4%+. Vanguard sweeps cash into the Vanguard Federal Money Market Fund (VMFXX) by default, also currently yielding competitively. Neither guarantees a rate; both core money market positions are SEC-registered funds, not FDIC-insured bank accounts. SIPC covers brokerage accounts for up to $500,000 in securities and $250,000 in cash if the broker fails — not for investment losses. Verify current sweep rates at fidelity.com and vanguard.com. (Educational comparison, not investment advice.)
Fidelity offers an HSA with no account fees, no minimum balance to invest, and access to Fidelity's full fund lineup including Fidelity Zero expense-ratio index funds. You can invest HSA dollars from the first dollar contributed. Vanguard does not offer a standalone HSA product. For investors looking to maximize their HSA as a triple-tax-advantaged account (pre-tax contributions, tax-free growth, tax-free withdrawals for medical expenses), Fidelity is the stronger choice among these two brokers. Source: Fidelity.com HSA; Vanguard.com (no HSA offered).
Both Fidelity and Vanguard support custodial accounts (UGMA/UTMA) for investing on behalf of minors. Fidelity offers a dedicated custodial brokerage account with full access to its fund and stock lineup; Vanguard offers UGMA/UTMA accounts with access to Vanguard funds and ETFs. Fidelity typically has a smoother online-only opening process; Vanguard's UGMA account setup may require paper forms for more complex configurations. Both also support trust accounts. Source: Fidelity.com; Vanguard.com custodial accounts.
Fidelity offers direct cryptocurrency trading (Bitcoin and Ethereum) through Fidelity Crypto for eligible retail investors, as well as access to the Fidelity Wise Origin Bitcoin Fund (FBTC) ETF in standard brokerage accounts. Vanguard does not offer direct cryptocurrency trading and does not allow purchase of spot Bitcoin ETFs — including FBTC and BlackRock's IBIT — through its brokerage, a notable restriction following the SEC's January 2024 approval of spot Bitcoin ETFs. Investors seeking crypto exposure within a major brokerage have more options at Fidelity than Vanguard. Source: Fidelity.com; Vanguard.com investment policy; SEC spot Bitcoin ETF approvals (January 2024). (Educational comparison, not investment advice.)
Both Fidelity and Vanguard are SIPC members, providing statutory protection up to $500,000 per account type (including up to $250,000 in cash) if the broker becomes insolvent. SIPC does not protect against investment losses — only against the broker's insolvency. Fidelity supplements SIPC with additional excess coverage through Lloyd's of London, offering coverage substantially above the statutory SIPC maximum for eligible account types. Vanguard relies on SIPC membership without disclosed excess coverage. The practical risk of either firm failing is extremely low — both are regulated by FINRA and the SEC with decades of operational history. Source: SIPC.org; Fidelity.com; Vanguard.com.
Independent editorial comparison. ClearValue Lending is not the issuer of any product compared here; affiliate links may pay a referral commission at no cost to you — selection is independent of compensation.