Vanguard vs Fidelity: Which is best for a Roth IRA?

#1

When choosing to open a Roth IRA…who would you recommend - Fidelity vs vanguard?

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How do I rollover my Roth IRA that I have with my advisor and change my mutual funds that I have to a target date index fund?
I want to invest in a Roth IRA, but the bank’s interest rates seem low. Is it possible to cut the middleman out and do it myself?
#2

Hi just chiming in to share my opinion. I think as long as you’re investing, both are good. I have my Roth IRA with Fidelity and my 403b with Vanguard (since I can only choose from some options). Both have low fees which I like. However, I really like Fidelity in terms of user interface and customer service. I know it may not seem important but since you can get pretty much the same index funds with both of these companies, I’d choose Fidelity. Congrats on opening your Roth IRA!

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#3

I 100% agree with @ashfrica! In terms of how much money they’ll make you, they’re virtually identical. Both offer low fee index funds that will guarantee you your fair share of market growth. Here’s some pros and cons:

  • Vanguard:
    • Pros: The creator and popularizer of the first index fund. We owe Jack Bogle and Vanguard a debt of gratitude for massively moving the financial services industry away from high fee, actively managed mutual funds. They also have an altruistic business model where the company is owned by the funds. That means there’s not an external pressure to raise fees and profit at the cost of the investor. They basically only offer “good” investment options.
    • Cons: To me their website still feels like it’s out of the 1990s. Some stuff can be frustratingly annoying to find or deal with on mobile, etc. Vanguard doesn’t have some cool products that Fidelity does, like HSAs and worldwide free ATMs.
  • Fidelity:
    • Pros: Much easier website to use in my opinion, and a great app. Really great phone support. I personally have to call Fidelity every few months for one reason or another, and it’s always smart, friendly US-based phone support who helps me with what I need. That feels pretty important when they have all my money. They also have nearly every type of account and product you want. I have my HSA with them, invested in index funds as well as my checking account. Since Fidelity doesn’t really have physical locations, they just let you use any ATM in the world and automatically reimburse the ATM fees.
    • Cons: In addition to low-fee index funds, Fidelity has a wide assortment of other, not so altruistic financial products. For example, they confusingly have two types of target date funds. Low fee target date INDEX funds (which I love) and nearly identically named higher fee target date funds which I don’t love. If you’re not careful, you can invest in the wrong stuff. Also, when you call them, they might push you toward the higher fee investments, since they’re a business trying to make a profit.

So, whenever someone tell me they’re going with Vanguard, I think “Great! You’ve chosen a wise path or whoever has recommended them to you has done so with your best interest at heart”. That said, I’ve had my money with Fidelity forever, and I plan to stick with them based on the Fidelity “Pros” above. :slight_smile:

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#4

This is great info. What about having the Roth IRA with Fidelity and the regular brokerage account with Vanguard? I have my employee 401K with Merrill Lynch already. I am not trying to complicate things by having multiple accounts with multiple companies, but also trying to not have all my eggs in one basket. Does that even make sense? lol. any suggestion would be really appreciated!