VTI is an ETF that gets talked about often. Being a Vanguard fund, many investors prefer to buy it directly from the broker for its low-cost ratio and zero-commission fees.
You can buy VTI through several other brokerages including Robinhood, TD Ameritrade, Charles Schwab, and Fidelity. Most of these brokers will also allow you to buy fractional shares of VTI. However, buying VTI directly from Vanguard is commission-free and can save costs compared to other brokerages.
There are several brokerages that offer VTI as an option and some reasons for wanting to do so. Read on to find out which brokerages sell VTI and why you might want to consider buying it from another brokerage.
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Why buy VTI from another brokerage?
First things first. Why would you want to buy VTI from another brokerage anyway? Perhaps you are loyal to your current brokerage platform, yet want to buy VTI. On certain platforms, you can do just that so there is no need to open a Vanguard account just to buy the ETF.
You also may want to purchase VTI from another brokerage so that you can purchase fractional shares, which you currently cannot do at Vanguard. The only option for purchasing fractional shares from Vanguard comes in the form of the Dividend ReInvestment Plan (DRIP) that is offered.
The plan enables investors who have fractional shares of VTI from a stock split to invest their dividends back into the ETF, even if this means purchasing fractional shares. Got it? Okay good. There is more information on the DRIP and buying fractional shares on this previous post, here.
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Why do other brokerages sell VTI?
Due to the popularity and diversity of VTI, some other brokerage platforms benefit from offering the ETF for trade. Other brokerages work as a third-party broker, so you will likely incur added fees if you do not purchase from Vanguard directly.
Vanguard also chooses to offer its funds through third-party brokerages as a way to reach a higher number of investors across the market. This benefits not only Vanguard but investors on other platforms as well.
What other brokerages can you buy VTI from?
There are several brokerages that allow you to buy and sell VTI aside from Vanguard. Let’s take a look at some of the major brokerages that offer the ETF.
Robinhood is one broker from which you can purchase VTI. All ETF trades are free of commission at Robinhood and Robinhood also allows for the buying of fractional shares of VTI.
There are 32 Vanguard ETFs that are available through TD Ameritrade, and VTI is one of them. You can buy and sell VTI free of charge with TD Ameritrade. However, the brokerage does not allow for the buying of fractional shares.
If you have a Charles Schwab account and do not have a Vanguard account, you can still purchase VTI. Charles Schwab offers VTI, making buying or selling through them your simplest option if you are not a Vanguard client but do use Charles Schwab.
Fidelity also offers VTI as an option alongside their own ETFs due to the fund’s popularity. Fidelity is one brokerage that also allows for fractional shares of VTI to be purchased.
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As mentioned, Vanguard does not allow for the purchase of fractional shares of VTI. This means that if you only have $1000 to invest and want to invest all of it in VTI, you will need to go to a brokerage that allows for buying of fractional shares.
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Should I buy VTI through Vanguard or another brokerage?
If you can, purchasing VTI through Vanguard offers the most benefits. For one, it is the company’s own fund and therefore is offered at a low expense ratio along with no commission fees. However, if you have an account with another brokerage that offers VTI, you may choose to incur a slight increase in costs and purchase the ETF from them for simplicity’s sake.
It may be easier to track trades and profits if all of your stocks and funds are in one place. You should weigh the pros and cons of investing in VTI through a third-party broker.
The pros of buying VTI from another brokerage
- Convenience – Convenience is a big factor for many who buy VTI from another brokerage. Simply not having to start an account with another platform and being able to invest in VTI and other Vanguard funds from the brokerage account you currently hold makes for better convenience when investing.
- Diversification – Differing brokerage platforms have different strong points that can benefit you. Vanguard may not have some of these strengths, such as good actively-managed funds, so in some cases it could benefit you to purchase VTI from another brokerage.
- Easy management – Having all of your funds with your brokerage of choice may make for easier tracking and managing of your investments.
Cons of buying VTI from another brokerage
- Cost –Vanguard typically offers the cheapest option for VTI since it owns the fund and buying directly from Vanguard will eliminate third-party fees that may be added when using another brokerage to invest in VTI.
- Less availability of funds – If you like VTI and want to purchase other Vanguard funds, they may not be available with another brokerage. If you plan to purchase multiple Vanguard funds, buying directly from Vanguard may be your best option. Doing so will also allow you certain conveniences, such as converting VTSAX to VTI.
The bottom line
VTI is an extremely popular ETF. For that reason, it is offered by many brokerages other than Vanguard. If you have an account with a brokerage that sells VTI, you may wish to purchase the fund from them as a third-party broker to keep things all in one place. Of course, opening an account with Vanguard is simple and could save you some money in the end as it is known for its low-expense ratios and zero-commission fees.
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