Vanguard eliminating/changing low-balance fees

alchemize beat me to it. Time to sign up for electronic statements, thanks OP! I (heart) Vanguard. What they have done to bring down fees for the average investor is nothing short of phenomenal.

Now if they would only match Fidelity's $100 bonus/AA/UAL miles!

Hmm...I may contact them and see if they will...

This is friggin' sweet. Most of my investments are based on indices anyway, and Vanguard would be the obvious choice for those mutual funds, simply due to their historically low expense rations. But buying the funds through other brokers incurred transaction fees, and Vanguard's various fees would have cost me more than I'd save in expenses.

Paperless statements? NO PROBLEM!

... however, Now I'm beginning to lean towards ETFs for long-term boring index investments anyway, and those can be bought anywhere.

I would have loved this several years ago. However, in the age of the ETF and multiple places offering limited $0 trades I don't see much need for index funds, even for buy and hold investors who aren't looking for the timing of an ETF.

djspray said: Awesome! I was straining to reach 5k in my Roth before they charged me a $10 custodial fee. Good thing I elected not to pay it with my last buy about a week ago.

If you did they would have probably refunded it. I had a low balance fee but put enough in by the first year to get above it and the fee was refunded.

Signed up today, makes good sense. Now Vanguard is an ultra low management fee broker - among if not the best.

Can always sign-up for e-delivery and when balance on all funds gets above $10k or total over $100k, switch back to paper (if option is still available then).

But hey for lower yearly fees, I'll switch too. thanks OP.

Thanks for the info. I will definitely change to the e-delivery.

Vanguard just gets better & better. Thanks OP!

verruckterBaum said: I would have loved this several years ago. However, in the age of the ETF and multiple places offering limited $0 trades I don't see much need for index funds, even for buy and hold investors who aren't looking for the timing of an ETF.

I agree. I was about to open an account with Vanguard, but since now we can get $0 trades on ETF's which could have even lower expense ratios compared to vanguard funds, why bother?

Woot! Timing couldn't be better, as just last month I was having a conversation with myself...

"you really need to get a Roth to complement your 401k"
"no doubt, but i'm a huge cheapass who doesn't like to pay any fees and the contribution limits forbid me from reaching 10k"
"don't be a wanker, the S&P index fund would very likely make up the $10 over the time you invested in it"
"let's compromise. I'll open the account next April and contribute '07 and '08, if things go well I'll only pay the fee once, maybe twice before it surpasses 10k"


But now I don't even have to wait. Paperless statements? I have a healthy tree-hugger streak so I would have done that anyway. I'm there dude.

Under the statements option (I have at least):

1. E-delivery
2. E-delivery and mail year end statement
3. U.S. Mail

I couldn't find clarification on whether you had to select choice #1 to be fully exempt from the fees, or if #2 applies as well.

Anyone know? I'll try to contact Vanguard and see if they offer any info/clarification as well.

Ok, I'm confused. The webpage you linked states:

The fee does not apply to the following accounts:

Money market sweep accounts held through Vanguard Brokerage Services®.
Accounts held in employer-sponsored retirement plans.
Accounts held in 529 plans.

But if you lookup the Vanguard 529 plans page (Link) it states:

The minimum initial investment for the Vanguard 529 Plan is $3,000. Once established, there is a $20 annual maintenance fee on balances less than $3,000 per 529 account.

Did they forget to update the 529 page? Which is accurate?

Vanguard is great with low expense ratios.

This is not a good thing for me... I like paper statements and I might have to re allocate now to avoid the $20 fee, because of less the 10k in the income fund.

boo.

jmz668 said: Of course, if you had between $5K and $10K in a non index fund, or a target fund, OR had multiple funds between 5-10K and had over 50K in total you weren't charged these fees either.$50,000 formerly got you out of the IRA low-balance fee, but I don't think it got you out of the index fund under-$10,000 fee; I'm not sure about the under-$2500 fee. Having Voyager or Flagship status might, but those required much higher asset levels.

Markfaafp said: Vanguard is great with low expense ratios.

Absolutely. Also great for low returns. I got tired of their low returns and switched to few other funds which have beat the crap out of my Vanguard Index funds.

Too bad...its effective Apr 26th....

i just started my Roth IRA for 2006 with them and had to pay the fees for me and my DW.


i suspect the timing of the announcement.

soupcxan said: Bad idea, there is increasing evidence that ETFs do not offer that much of a cost advantage over standard index funds, especially the low-turnover funds from vanguard. I'd stick with the standard funds and work your way up to the Admiral shares. If you are on a long-term investment plan, why pay constant commissions to buy ETFs when you can get mutual funds for free?
That's a good point for people who are dollar-cost-averaging. And my 401k plan is all mutual funds, becuase that's what makes sense when you're contributing every two weeks.

However, my personal investments are invested "chunkier". Big IRA purchase at the beginning of the year, maybe only one or two other buys over the course of the year.

So, if Vanguard's SP 500 index has an expense ration of 0.18% (0.09% with Admiral, $50,000 or $100,000). Their large-cap index ETF (VV, based on the MSCI 750, closest equivalent), has an expense ration of 0.07%.

A theoretical $4,000 investment would yild an expense savings of 4.5 bucks per year. Okay, not exciting, but it would pay for the commission after a few years.