(Replace 12/23/24: I simply went forward and transferred out some ETFs out of Vanguard and didn’t appear to get hit with any charges. Mine was not a full account switch – it was two ETFs that have been utterly transferred out and one which was partially transferred out. It may nonetheless be that for full account transfers they might hit us with $100 payment. A simple manner round this must be to only go away the account open with none funds – switch over all belongings and go away a number of {dollars} there, withdraw these few {dollars}, after which simply let the account languish; hopefully that’ll assist keep away from charges. I’d be thinking about listening to different folks’s experiences because the anybody else has expertise because the 7/1/24 change.)
Unique Submit 5/1/24:
Vanguard despatched out an e-mail with some updates coming to their payment schedule, efficient July 1, 2024. I’ll submit the total e-mail picture on the finish of this submit and you may see the up to date Vanguard payment schedule at this pdf.
Two issues that jumped out, as identified by readers:
- Vanguard added a $100 Account closure and switch payment: “A $100 processing payment could also be charged for account closure or switch of account belongings to a different agency.”
This may be very related for these of us who prefer to switch brokerage funds to get brokerage bonuses. I’m not sure if the $100 (which “could also be charged”) will apply when transferring out partial belongings or a portion of 1 holding. Regardless, it’s a brand new factor to be fearful about with Vanguard. Some people find Fidelity to be the most effective brokerage hub account.
2) Vanguard added a 1% payment on some international dividends: “Overseas securities and American Depositary Receipts (ADRs) dividends payment: A payment of 1% on the gross dividend quantity will probably be charged when a dividend is paid on a international or ADR asset held in U.S. {dollars}.”
I haven’t absolutely wrapped my head round this but, however this may considerably improve the general expense ratio for international holdings. For instance, I hold a bit of my investments in VXUS which has an expense ratio of .08%. Let’s say that the inventory provides round 3% in annual dividends yearly. The expense ratio would find yourself being .11% as an alternative of .08%. (For every $100 in VXUS holding, you’ll pay $.08 for the .08% expense ratio, plus you’ll pay $.03 for the 1% value on the $3 of dividends paid. Complete value finally ends up $.11 per $100 for a complete expense ratio of .11%.) Readers word that the 1% payment is just for shares that commerce on international exchanges, not funds like VXUS which commerce on US exchanges.
3) $25 for broker-assisted trades: “A $25 broker-assisted fee will probably be charged for every Vanguard mutual fund1 and Vanguard ETF® (exchange-traded fund) commerce positioned over the cellphone and for closing transactions positioned by Vanguard Brokerage Companies® to cowl a margin name or fulfill an impressive debt owed in your brokerage account.”
The modifications aren’t horrible total, however I’m weighing whether or not to modify from Vanguard to Constancy or one other brokerage. Be at liberty to share your evaluation or ideas in regards to the varied payment modifications within the feedback beneath.
