Online Stock Brokers: Vanguard vs. TradeKing

By Jordan

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 TradeKing, make buying stocks, funds, and ETFs a snap.

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Below, we'll compare Vanguard and TradeKing on several key factors like commissions, international stocks, and account minimums to help you determine which broker better fits the needs of your portfolio.

Trading costs and commissions

Commissions seemingly get cheaper by the day, making the differences smaller (and arguably less important) than in the past. Here's how Vanguard and TradeKing stack up on trading costs.

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Data sources: Company websites.

As you can see, the differences in commission prices between the two companies are marginal at best, adding up to a little more than a couple dollars for each trade.

In addition, many investors qualify for discounts. Investors who keep at least $50,000 invested in Vanguard's funds qualify for discounted trades, for example. IRA investors can substantially reduce the cost of trading by tapping into numerous special offers for opening an IRA account.

Commission-free ETFs and NTF Funds

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 provides its clients thousands of ETFs and mutual funds that be can bought and sold fee-free.

Data sources: Company websites.

If funds are important to you, Vanguard's list of commission-free ETFs and NTF mutual funds might be a compelling advantage for it. While TradeKing doesn't have any commission-free ETFs or NTF mutual funds, note that its standard commission prices are lower than Vanguard's. Thus, depending on the funds you wish to invest in, either broker may have the better deal for you.

Account minimums

You can open an account at Vanguard or TradeKing 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 offers are always changing, but we keep an updated list of offers in the Broker Center. You might consider making a larger initial deposit if you can collect a big bonus or score some commission-free trades.

TradeKing and Vanguard are no-minimum online stock brokers, which can be a big advantage for investors who are just starting out. Image source: Getty Images.

Trading platform

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.

International stocks and ADRs

You can invest in foreign companies by buyingAmerican depositary receipts (ADRs) on U.S. markets as a client of either broker. However, if you want to go direct to the source to trade on an international market, there are some limitations. Only Vanguard will allow you to transact on an international exchange, but it charges a $50 fee in addition to a commission to make each trade.

Notably, investors can shop from thousands of ETFs and mutual funds that hold foreign stocks, so these limitations really only apply to buying or selling shares of individual companies.

Research quality and tools

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 reports and research from Standard and Poor's, Thomson Reuters, and First Call, just to name a few third-party research providers. TradeKing customers can read S&P stock reports, get news from the wires, and tap into proprietary content like the company's Breakfast Bell market report, which is sent out before the markets open. Depending on your personal needs, you could find either brokerage provides ample research to fit your investment style.

Mobile app

You can now trade anywhere you have internet access or cell signal. Here's how each brokers' users and clients rated their mobile capabilities on iOS and Android (as of Dec. 10, 2016).

Data sources: Relevant app stores.

Better online stock broker: Vanguard or TradeKing?

Truly, you could make the case for either brokerage being the "better" broker, because it's all dependent on your personal portfolio. TradeKing has lower published commissions across the board, but it doesn't offer access to international markets. Vanguard has higher standard commissions, but provides more opportunities to invest in foreign stocks, and offers a vast list of commission-free ETFs and no-transaction-fee mutual funds. Ultimately, it's about how a broker's services fit within the the puzzle of your personal portfolio.

While The Motley Fool does not endorse any particular broker, we can help you make a decision about which broker is best for you. Visit's Broker Center for a complete comparison of several leading discount brokerages. If you're looking for a broker for an IRA, we've compiled a list of great special offers for IRA accounts that currently include cash bonuses of up to $2,000 in addition to other incentives.

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