Author Topic: Does it make a difference where I hold my Vanguard shares?  (Read 1098 times)

DB43

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Hello all,

Just a newbie question here. Does it matter where I hold my Vanguard VTSAX shares? Is there a reason to have them in a Vanguard account over something like TD Ameritrade, Tastyworks or one of the other brokerages that offer free stock trades?

Lucky Penny Acres

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #1 on: May 12, 2020, 02:52:42 PM »
Practically, not a real difference. Theoretically, it could make a difference.

A place like TD Ameritrade could change their policy in the future at any time and get rid of the free trades and you might be stuck at that point or need to pay a fee to get your money out.

In addition, by going through an intermediary to get to Vanguard, you are adding some small additional risk of critical failure or bankruptcy of the intermediary. For example, the TD Ameritrade technology infrastructure could go down which is an extra risk someone investing directly with Vanguard wouldn't need to worry about.

Rob_bob

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #2 on: May 12, 2020, 06:32:28 PM »
VTSAX is a mutual fund right?  If so I don't believe it trades commission free at TDA, I have an account there but only buy ETFs and individual stocks, I think they still charge for mutual funds.

Tyler durden

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #3 on: May 12, 2020, 06:43:14 PM »
Some firms used to charge transaction fees to buy and sell shares of funds that weren't there own. That is less common. Not sure about vanguard but it might help once you hit certain asset levels like 100k or more you get a break on the expense ratio. Some companies offer premium or institutional share class levels

ETF2

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #4 on: May 12, 2020, 07:00:16 PM »
VTSAX is a mutual fund right?  If so I don't believe it trades commission free at TDA, I have an account there but only buy ETFs and individual stocks, I think they still charge for mutual funds.

Not sure about TD, but I trade VTSAX for free with Chase You Invest.  Though I am "Private Client" so not sure if that is why.

terran

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #5 on: May 12, 2020, 08:33:09 PM »
Anywhere is fine. I wouldn't want to pay commissions though. Etrade doesn't charge commissions for a number of vanguard mutual funds. Most of the large brokerages don't charge commissions for the ETF versions of vanguard mutual funds (like VTI which is the equivalent of VTSAX). Most of the large brokerages also offer other mutual funds (and ETFs) that are also good and on which they don't charge commissions. Long story short: there are plenty of good options available at Vanguard, Fidelity, Schwab, Etrade, and TD Ameritrade (among others, I'm sure), so just pick the one you want and people can probably tell you what some good investment options there would be.

MustacheAndaHalf

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #6 on: May 13, 2020, 02:34:07 AM »
Hello all,

Just a newbie question here. Does it matter where I hold my Vanguard VTSAX shares? Is there a reason to have them in a Vanguard account over something like TD Ameritrade, Tastyworks or one of the other brokerages that offer free stock trades?
I wouldn't go outside Vanguard with Vanguard mutual funds.  For example at TD Ameritrade, it costs you $25 to sell any or all shares of VTSAX (or other "no load" funds):
https://www.tdameritrade.com/retail-en_us/resources/pdf/SDPS1009.pdf

That means in retirement, if you need to sell for a quarter or year's worth of living expenses, you will pay $25 per time, per fund.  Or whatever rate they decide to charge in the future - I'd avoid that situation.

An alternative is ETFs, which I favor.  Instead of owing VTSAX, you would own VTI, which is the ETF version that costs the same and has the exact same assets.  Vanguard charges $0/trade for any ETF, so you could also buy ITOT (iShares Total Stock Market) instead for the same expense ratio.  I recently moved some ETFs from Vanguard to Interactive Brokers, and they cost $0/trade at both places.  Fidelity and Schwab both charge $0/trade for ETFs, as well.
https://www.schwab.com/pricing
https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/Brokerage_Commissions_Fee_Schedule.pdf

DB43

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #7 on: May 13, 2020, 04:58:35 PM »
Thank you everyone for all the info! Looks like I will be opening an account with Vanguard to keep my life simple.

Dicey

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #8 on: May 14, 2020, 06:55:10 AM »
VTSAX is a mutual fund right?  If so I don't believe it trades commission free at TDA, I have an account there but only buy ETFs and individual stocks, I think they still charge for mutual funds.

Not sure about TD, but I trade VTSAX for free with Chase You Invest.  Though I am ["b]Private Client" [/b]so not sure if that is why.
Curious as to why you went this route. Isn't it crazy expensive?

ETF2

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #9 on: May 15, 2020, 08:38:16 AM »
VTSAX is a mutual fund right?  If so I don't believe it trades commission free at TDA, I have an account there but only buy ETFs and individual stocks, I think they still charge for mutual funds.

Not sure about TD, but I trade VTSAX for free with Chase You Invest.  Though I am ["b]Private Client" [/b]so not sure if that is why.
Curious as to why you went this route. Isn't it crazy expensive?

Is what crazy expensive?  Private Client?  That's free, and in fact, saves you money if anything.  You just have to have I think $250k in banking/business banking/investments with Chase.

Their You Invest platform, also 100% free, no trading fees, no load, etc.  It's built right in to the online banking.  So it's all in one spot. And the stock/ETF trades are all unlimited and free, too, for anyone. I don't have to transfer to Vanguard, wait a few days for it to show up, etc.  I don't pay a penny in fees for anything with Chase.  I do have a Vanguard account also for my SIMPLE IRA.  But otherwise, I just find it easier to keep everything with Chase.  For anyone that is just putting money in index funds like typical Mustachians, the YouInvest platform is pretty damn good, especially if you are already banking with Chase. 
« Last Edit: May 15, 2020, 08:41:42 AM by ETF2 »

K-ice

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #10 on: May 24, 2020, 01:15:38 AM »
I thought this question might be about "asset location".  I am really only familiar with the Canadian perspective and even that is somewhat debatable but I hold:

Bond Funds (VAB) and US$ funds (VTI) in my retirement account RRSP ~= 401K
Foreign funds (VXC) in my tax free account TFSA ~= Roth
Canadian dividend fund (VDY) in my taxable account = taxable account

My accounts are not "perfect", and there is some cross over because asset allocation is more important than "location". But it is my understanding that there are tax advantages to holding certain funds in certain accounts in the USA too.

Maybe someone with more US asset location knowledge can add.

MustacheAndaHalf

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Re: Does it make a difference where I hold my Vanguard shares?
« Reply #11 on: May 24, 2020, 01:57:51 AM »
I thought this question might be about "asset location".  I am really only familiar with the Canadian perspective ...
No, that's not the topic.  As the OP asked in the first post:

Is there a reason to have them in a Vanguard account over something like TD Ameritrade, Tastyworks or one of the other brokerages that offer free stock trades?

You'll find more topics about Canada's RRSP and investing over in:
https://forum.mrmoneymustache.com/canada-tax-discussion/