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Charles Schwab Transaction Fees for Vanguard Funds

Did you know that Charles Schwab imposes a transaction fee for every purchase of a non-Schwab mutual fund?

Yes, it’s true. This isn’t a hidden fee, either. It’s very apparent from the Trade Ticket, but most people ignored it.

Continue reading below to learn all the details about Schwab’s transaction fees on Vanguard mutual funds.

What Does Schwab Charge for Vanguard Mutual Funds?

When you buy a Vanguard mutual fund on Charles Schwab, it comes with a transaction fee of $74.95.

This transaction fee is included with every trade execution (buy-side only) and does not apply to selling the mutual fund.

Schwab will waive this fee for dividend reinvestment into the same security.

To illustrate, let’s say you buy some shares of VTSAX on Monday and then purchase additional shares on Tuesday. These two transactions result in a total transaction fee of $149.90.

How to Avoid Schwab Mutual Fund Transaction Fee?

As you can see from the calculation above, buying Vanguard mutual funds on Schwab isn’t the best idea. Not only will you be charged a transaction fee, but this fee is also quite expensive.

Switching to Schwab’s equivalent funds is the simplest way to avoid paying the transaction fees.

You probably don’t know this, but Schwab also has their own line up of mutual funds that compete with Vanguard.

In most instances, Charles Schwab mutual funds are comparable, and there is no transaction fee for buying Schwab funds.

I’ve prepared a table below to help you quickly find Vanguard alternatives at Schwab.


Final note: the transaction fee discussed in this post pertains solely to non-Schwab mutual funds. Vanguard ETFs, on the other hand, are exempt and remain commission-free at Charles Schwab.

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3 thoughts on “Charles Schwab Transaction Fees for Vanguard Funds

  1. Does anyone use Vanguard website for investing? If so, how do you like it? I use Schwab right now and I like it but there is a $75 trading fee to buy into a lot of the Vanguard funds. I really like some of the Vanguard funds and would like to buy them.

    1. I have Schwab and Vanguard. I use Schwab for stocks and their ETF’s and I use Vanguard for their funds and ETF’s. Since neither charges commissions on their sites for their funds, I have both. But I won’t use Vanguard for picking stocks. I like Schwab for this as their site is more visually pleasing and easier to navigate.

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