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Online trading platforms have transformed the way investors trade stocks, mutual funds and other resources . Vanguard vs E*TRADE are two popular platforms that cater to distinct types of investors . In order to make an informed decision you should consider factors like fees, features and investment options . Let’s delve into the details of each platform .
Fees: What You Need to Know
When comparing brokerage firms understanding the associated fees is essential . There are four main types of fees to consider:
Trading Fees: These are fixed charges that are collected for each trade and can be in the form of a flat fee or a spread based on the buying and selling price difference of an asset .
Inactivity Fees: Some brokers impose fees for not trading or maintaining a balance in a brokerage account .
Trading Commissions: Brokers charge a percentage based on the volume or value of each trade .
Non-Trading/Other Fees: These encompass various fees that are related to trading on the platform like deposits, withdrawals or additional services .
Both Vanguard and E*TRADE have adopted competitive fee structures and offer free trading for stocks, mutual funds and ETFs . However additional charges may apply for certain services .
Vanguard’s Fee Structure
Options contracts that are traded under $1,000,000 collect a $1 fee which increases on a sliding scale for higher amounts . Most secondary market bond trades are subject to a $1 fee per $1,000 while primary market bond purchases have no fee . Dealer minimums apply to fixed-income trades . Buying Vanguard mutual funds, ETFs and stocks are free for online transactions . There is a $25 fee for broker-assisted trades that are under $1,000,000 . Some Vanguard mutual funds may have special purchase or recovery fees which could range from 0 .25% to 1% of the transaction amount . Fees for trading American Depositary Receipts (ADRs) may vary depending on the handling bank or direct trust company .
E*TRADE’s Fee Structure
E*TRADE charges $0 .65 per options contract with reduced rates of $0 .50 per contract for investors making over 30 trades per quarter . Futures trading collects a fee of $1 .50 while cryptocurrency futures products have costs of $2 .50 per contract per side plus fees . Margin rates go from 11 .95% to 9 .95% based on the debit balance . Over-the-counter (OTC) trades carry a standard fee of $6 .95 and ADR trades made by phone are subject to a $25 fee .
Choosing the Right Platform
Vanguard is well known for its low-cost stocks and funds which makes it an outstanding choice for long-term investing and retirement savings . Its extensive range of low-cost mutual funds differs it from other platforms . On the other hand ETRADE differentiates itself with a strong and user-friendly app along with access to over 200 futures products . More experienced investors may appreciate the broader range of options ETRADE offers .
Final Thoughts
Both Vanguard and ETRADE present competitive fee structures and a comprehensive range of investment options . Vanguard’s focus on low-cost mutual funds and long-term investing makes it ideal for retirement savings while ETRADE’s user-friendly app and diverse offerings attract more sophisticated investors .
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