Fidelity, Schwab, or Vanguard? Choosing Your Rollover Home

Comparing the Big Three IRA Custodians

When rolling over your 401(k), the choice of IRA custodian affects your investment options, costs, and service experience for decades. Fidelity, Schwab, and Vanguard collectively manage trillions in retirement assets. Each has distinct strengths, and the right choice depends on your specific needs.

Fidelity Investments

Best for: Active traders, those wanting the broadest investment selection, and people who value in-person service.

Investment options: Fidelity offers the most comprehensive selection. You can buy stocks, ETFs, mutual funds (including competitors’ funds), options, and even cryptocurrency through a linked account. Zero-expense-ratio index funds (FZROX, FZILX) are exclusive to Fidelity.

Costs:

• Stock/ETF trades: $0
• Mutual fund trades: $0 for Fidelity funds, $0 for many third-party funds, up to $49.95 for others
• Zero-expense-ratio funds available
• No account minimums

Service: Over 200 investor centers nationwide for in-person meetings. 24/7 phone support. Robust mobile app and website. Generally considered the best customer service among the big three.

Drawbacks: The sheer number of options can be overwhelming for simple investors. Some third-party mutual funds carry transaction fees.

Charles Schwab

Best for: Those who want strong service with a traditional brokerage feel, bank integration, and comprehensive planning tools.

Investment options: Broad selection of stocks, ETFs, and mutual funds. Schwab proprietary funds have low expense ratios (SWTSX at 0.03%). Strong options and futures trading platform.

Costs:

• Stock/ETF trades: $0
• Mutual fund trades: $0 for Schwab funds and OneSource funds
• Low-cost index funds (not zero, but competitive)
• No account minimums

Service: Approximately 300 branch locations (expanded after TD Ameritrade merger). 24/7 phone support. Integrated Schwab Bank for checking accounts and cash management. Excellent research tools.

Drawbacks: Not quite as low-cost as Fidelity’s zero funds. Website can feel cluttered. TD Ameritrade integration created temporary complexity.

Vanguard

Best for: Long-term buy-and-hold investors focused on lowest possible costs and index investing.

Investment options: Vanguard invented the index fund. Their selection of low-cost index funds and ETFs is legendary. VTSAX (0.04% expense ratio) and VTI (0.03%) are industry standards. Limited options for active trading.

Costs:

• Stock/ETF trades: $0
• Mutual fund trades: $0 for Vanguard funds, up to $20 for others
• Industry-leading low expense ratios
• No account minimums for most funds

Service: No physical branch locations. Phone support available during business hours (limited 24/7 options). Website and app are functional but less polished than competitors. Service has improved significantly in recent years.

Drawbacks: Weakest customer service of the three. Website feels dated. Not ideal for active traders or those wanting in-person advice. Limited cryptocurrency options.

Head-to-Head Comparison

The Bottom Line

For most rollovers, any of these three custodians will serve you well. The cost differences on a percentage basis are marginal. Choose Fidelity if you want maximum flexibility and service. Choose Schwab if you value integrated banking and branch access. Choose Vanguard if you’re committed to passive index investing and want the company that pioneered low-cost investing.

What matters most: pick one, complete the direct rollover, invest in low-cost diversified funds, and stay the course. The choice between these three matters far less than simply getting your money out of a high-fee 401(k) and into a low-cost IRA.