Accounts And Their Fees With The Vanguard Group
A Roth IRA is a specialized account that is meant for retirement, and it is funded with a post-tax income. When you contribute to your Roth-IRA you will not have any up-front tax deductions like you do with traditional IRAs. And, since the distributions of your Roth IRA are tax-free when you do it correctly, you get every penny that you invest at any time that you want it, and it is tax and penalty-free. (Read more about the ROTH IRA rules on this page.)
Vanguard is a personal investment company that offers simple IRAs, 403(b) plans, Individual 401(k), Vanguard 529 plans, and Roth 401(4) plans, non retirement accounts, Roth IRAs, Roth SEP-IRAs, UGMAs, UTMAs, and educational savings accounts. There is a fee to open an account for each type of plan, and Vanguard wants to help you understand each account and the fees that come along with it so that you can decide which type of account is the right one for you.
Brokerage accounts:
Vanguard Group has a few different types of brokerage accounts that you can choose from and those are non retirement accounts, traditional Roth IRAs, and SEP-IRAs, UGMAs, UTMAs, and education savings accounts. Each one of the brokerage accounts cost $20 to open, and the Vanguard Brokerage Services will assess how much of a fee you owe if you have less than $10,000 in your accounts. There are ways to avoid the fees that you owe with these accounts. You can do this if you are the primary account holder and you sign up for the e-delivery service. This service allows you to get your statements, annual privacy notices, confirmations, fund reports, and brokerage accounts electronically.
Mutual fund-only accounts:
There are five different mutual fund-only accounts that Vanguard offers including the Simple IRAs, 403(b) plans, Individual 401(k) plans, Individual Roth 401(k) plans, and the Vanguard 529 plan. Each mutual fund-only account is $20 to open and the monthly fee is $20 if your account has $10,000 dollars or less within it. The Simple IRAs have a fee of $25 for each Vanguard mutual fund that is placed in each individual account. The fee for 403(b) plans is $5 per month or $60 per year in service fees for each person that is on the account. The service fees for the Individual 401(k) and Individual Roth 401(k) plans are $20 every month for every Vanguard mutual fund with each account that you have.
The Vanguard 529 Plan for college savings has a service fee that varies based on how much is in your account and how many people are on the account.
The fees for the mutual fund-only accounts can be waived if you are a Voyager, Voyager Select, Flagship, or Flagship Select client with Vanguard. They can also be waived it you have a trust account or an organizational account that is registered under an employee identification number
The exception for the waiving of these fees is if you have a 403(b) plan in which the fee is charged for everyone who is on the account. However, the fees on these accounts are a flat fee so it does not affect your account as your assets grow.
The Fees on your 401(k) plans may be waived if all of the people on the account are a Voyager, Voyager Select, Flagship, or Flagship Select client with The Vanguard Group.
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started this website to share his expertise in using his Self-Directed IRA. Most recently he's been advising individuals to diversify into precious metals ahead of a certain recession. He invested with Goldco.