Cost/fees for buying/selling Vanguard brokered CDs

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Topic Author
anonyx
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Joined: Thu Apr 23, 2015 11:45 am

Cost/fees for buying/selling Vanguard brokered CDs

Post by anonyx »

I have some Vanguard mutual funds as part of my Roth IRA. I'm thinking of buying some CDs with some of the money from my mutual funds (while keeping it as part of my Roth IRA.) I know that, if I buy the CDs through Vanguard, I must open a Vanguard brokerage account.

I just want to know what fees Vanguard will charge me to:
1) Open a Vanguard brokerage account;
2) Buy CDs through vanguard; and/or
3) Sell my Vanguard CDs (or transfer the funds to new CDs or mutual funds) once they mature.

I know I could probably shop around and get better CD rates without Vanguard, but I like the idea of the simplicity of doing it through Vanguard.

Thank you for any relevant info.
livesoft
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by livesoft »

1. $0

2. $0 for new issues.

3. Don't know. I let brokered CDs mature and don't sell them. If they mature, then $0 to transfer or ACH the money elsewhere.


Note to Vanguard: The Vanguard.com web site must be terrible if this information is not found there, so maybe potential customers don't want to use Vanguard?

Here is the link with the fees: https://investor.vanguard.com/investing ... ommissions
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blueblock
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by blueblock »

Edit: Deleted—responded to another user's question here by mistake.
Topic Author
anonyx
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by anonyx »

Thank you livesoft! I did search for the info but didn't see it and knew someone on this forum could answer quicker than I could find it elsewhere. Thank you for posting the link!
Northern Flicker
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by Northern Flicker »

The problem with selling brokered CDs is liquidity. There isn't much of a secondary market, so bids to buy are usually low. Holding them to maturity is fine.
Topic Author
anonyx
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by anonyx »

Thanks jalbert!
Topic Author
anonyx
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by anonyx »

Apparently there is a $20 annual fee for a brokerage account, but it's not charged to Voyager members, which I am.
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jhfenton
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by jhfenton »

anonyx wrote:I have some Vanguard mutual funds as part of my Roth IRA. I'm thinking of buying some CDs with some of the money from my mutual funds (while keeping it as part of my Roth IRA.) I know that, if I buy the CDs through Vanguard, I must open a Vanguard brokerage account.

I just want to know what fees Vanguard will charge me to:
1) Open a Vanguard brokerage account;
2) Buy CDs through vanguard; and/or
3) Sell my Vanguard CDs (or transfer the funds to new CDs or mutual funds) once they mature.

I know I could probably shop around and get better CD rates without Vanguard, but I like the idea of the simplicity of doing it through Vanguard.

Thank you for any relevant info.
1. $0 as others have said. You can avoid any low balance fees by signing up for electronic statements.
2. $2 per bond for secondary market brokered CDs / $1 at Voyager Select level / $0 for new issues (but yields are better on secondary market CDs)
3. $0 for sales, but liquidity is very poor, and basically non-existent for small lots (<$10K). I assume all purchases are to be held to maturity.
BHUser27
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by BHUser27 »

anonyx wrote:Apparently there is a $20 annual fee for a brokerage account, but it's not charged to Voyager members, which I am.
Not just Voyager members - $10K in a mutual fund, or agreement to e-delivery is all you need to avoid the fee...
...we don't charge the fee for Voyager, Voyager Select, Flagship, and Flagship Select clients; clients who hold at least $10,000 in Vanguard funds and ETFs; or clients who have elected e-delivery of statements, our annual privacy policy notice, and brokerage and mutual fund confirmations, reports, prospectuses, and proxy materials.
Topic Author
anonyx
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by anonyx »

Great, thanks!

(Obviously, I'm a little paranoid about fees, but I've been burned before elsewhere.)
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dm200
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Re: Cost/fees for buying/selling Vanguard brokered CDs

Post by dm200 »

anonyx wrote:I have some Vanguard mutual funds as part of my Roth IRA. I'm thinking of buying some CDs with some of the money from my mutual funds (while keeping it as part of my Roth IRA.) I know that, if I buy the CDs through Vanguard, I must open a Vanguard brokerage account.

I just want to know what fees Vanguard will charge me to:
1) Open a Vanguard brokerage account;
2) Buy CDs through vanguard; and/or
3) Sell my Vanguard CDs (or transfer the funds to new CDs or mutual funds) once they mature.

I know I could probably shop around and get better CD rates without Vanguard, but I like the idea of the simplicity of doing it through Vanguard.

Thank you for any relevant info.
I believe there is a brokerage fee when either buying or selling brokered CDs on the secondary market, but no fee when buying new issues.

When you sell on the secondary market, the fee is the least (usually) of the "issues". There is loss due to interest rate changes because value goes down as rates go up. Then there is the bid-ask spread and that may be 1-2% of the value of the CD. If you hold the CD to maturity or if it is a callable CD and it is called, there is no charge from vanguard. Remember that you must have a settlement account/fund (the Vanguard Federal Money market fund) to stage the funds going in and receive the interest and the money when it matures.
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