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Minimum Age to Open a Vanguard Account in 2022

What is a minimum age to open an investment or IRA account at Vanguard brokerage in 2022?

Minimum Age to Open a Vanguard Account

The minimum age to legally open and own a brokerage account at Vanguard is 18 years. If you or your child have not reached 18 years, then your best option is custodial accounts.

You can open a custodial account at Vanguard. But a better option is one of the largest brokerage houses in the United States—TD Ameritrade— that offers custodial accounts (also called UTMA accounts) and much more.

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Overview of Vanguard ETFs

Vanguard ETFs Rating

In the past, Vanguard managed exchange-traded funds with the industry’s lowest expense ratios. But several investment companies in recent years have challenged Vanguard on this issue, and some of them are now actually lower than Vanguard. For example, Fidelity’s Consumer Staples ETF (FSTA) charges 0.084%, while VDC, Vanguard’s equivalent fund, charges a slightly higher 0.10%.

All of Vanguard’s ETF’s are free to trade on Currently, there are 71 Vanguard ETF’s available for purchase. Amazingly, the broker doesn’t have a short-term redemption fee for them, although the broker does not permit trading the same ETF more than 25 times per year.

Vanguard Investments Review

The ETF screener on Vanguard’s site has both basic and advanced modes. Criteria that can be selected include fund size, minimum investment, number of holdings, and active or passive management. A fund’s profile page offers limited information, such as volume and bid-ask spread. There is also a basic chart available.

Mutual Funds

Vanguard Mutual Funds Rating

Vanguard also has a large selection of mutual funds, both from the company itself and other fund families. There are currently 311 Vanguard mutual funds available for purchase. In total, the broker offers 6,518 investments that are open to new investors. Of this amount, 3,337 funds have no transaction fee. The option to search for no-load funds did not work in our testing, nor did the sorting feature for load status in the screener’s results.

A mutual fund’s profile page at Vanguard comes with some important data, such as portfolio composition, number of holdings, short-term redemption fee, minimum investment, and historical performance.

Vanguard Investing Review

A mutual fund can be added to a watchlist or compared against other funds. The comparison tool looks at issues such as expense ratio and SEC yield side-by-side.

All Vanguard mutual funds have no load and no transaction fee when traded on the Vanguard website, and most of them have a $3,000 minimum. Mutual funds that do have a transaction fee cost $20 for accounts below $500,000 ($8 above this level). Customers with less than $1 million in assets pay $30 or $32, depending on account balance, for trades placed over the phone. Vanguard also charges a $50 short-term redemption fee for mutual fund sales that occur less than two months after purchase.


Vanguard IRA Rating

Besides taxable accounts, Vanguard also provides a large selection of IRA’s. These include Roth, Traditional, SEP, and SIMPLE varieties. The broker-dealer also offers an individual 401(k) plan. The SIMPLE IRA and solo 401(k) must be opened through snail mail, while the other accounts can be opened on-line.

Vanguard does not charge a fee to close a retirement account, which is more generous than some of its rivals. Fidelity, by comparison, charges a $50 IRA closeout fee. However, some Vanguard non-taxable accounts do have fees when they hold Vanguard funds. For example, a SEP IRA is charged $20 for each Vanguard fund with a balance under $10,000. This fee is assessed once per year. The fee can be avoided by reaching Flagship status, which requires an account value of $1 million or more. Signing up for electronic statements will also waive the charge.

Vanguard charges $20 annually for each Vanguard fund held in a self-employed 401(k), regardless of the fund’s balance. The fee is waived if at least one plan participant has $1 million or more in Vanguard assets.

The SIMPLE IRA is charged $25 for each Vanguard fund, although having at least $50,000 deposited with the broker will avoid it.

Financial Advice and Managed Accounts

Vanguard Managed Accounts Rating

More brokers today are offering managed account services, and Vanguard hasn’t failed to deliver here. However, the broker doesn’t have a robo-advisory service, which many of its competitors do offer today. The major player in this area, M1 Finance, provides robo-advisory investing completely free.

Vanguard charges 0.30% for its traditional portfolio management. It does require a very steep $50,000 to start. Besides the high minimum, another disadvantage of financial advice through Vanguard is the fact that the broker-dealer doesn’t have a large network of branch locations, like a Raymond James or Edward Jones. This means that investors don’t get to sit down with a financial advisor personally. Clients work with a Vanguard advisor over the phone, through the web, a videoconferencing platform, and via snail mail.

On the positive side, Vanguard’s low fee includes a personalized financial plan, which a lot of services either don’t offer or charge more for.