In this review, we compare investment platforms Interactive Investor and Vanguard Investor, looking at what they offer to clients and how they could help you grow your money. We provide insight into the cheapest way to invest in Vanguard, which could actually mean using Interactive Investor.
We also include details of reader offers, including a promotion from Interactive Investor where it is waiving its monthly SIPP fee for 6 months, meaning that customers can save £78* when they open a SIPP.
Interactive Investor vs Vanguard - which is better?
Pension trading account
Quick Start funds
Target Retirement funds
Personal financial advice for retirement planning
|Products||ISA, General Investment Account, Junior ISA, SIPP
|ISA, General Investment Account, Junior ISA, SIPP|
|Minimum investment||No minimum||£500 or £100 monthly investment|
|Platform fees||£9.99 per month (Investor)
£12.99 per month (Pension Builder)
£19.99 per month (Super Investor)
|0.15% (capped at £375 for accounts over £250,000)|
|Customer reviews (Trustpilot)||4.7/5.0||4.1/5.0|
|Money to the Masses offer||6 months fee free on SIPPs, saving customers £78*||n/a|
Interactive Investor vs Vanguard - services
Fundamentally, Vanguard offers a way to invest in its own range of passive funds in an easy and cost-effective way. While it offers some guides and resources, it principally provides investors with either a DIY option or its popular LifeStrategy or Target Retirement funds. For Interactive Investor, which offers a great deal of investment choice, there are research tools, guides, top-fund picks and model portfolios to help beginners through to proficient investors. In addition, it has a Company Account, which allows trading from limited companies, as well as a pension trading account, which can hold a greater variety of asset classes than are available through a standard SIPP.
Interactive Investor vs Vanguard - products
Both Interactive Investor and Vanguard have the main products you would expect from a large-scale investment platforms, with a stocks and shares ISA, GIA, JISA and SIPP. They each lack a Junior SIPP and LISA, which might lead investors looking specifically for those options to go elsewhere (for example, to Hargreaves Lansdown*, which offers both).
In addition to the main wrappers, Interactive Investor also has a trading account, which allows clients to invest in more than 40,000 UK and global stocks, as well as funds, investment trust and ETFs. Foreign exchange costs are minimised with the trading account as investors can hold up to 9 currencies.
Interactive Investor vs Vanguard - minimum investment
Interactive Investor doesn't require a minimum lump sum to open an account. Those looking to take advantage of its free regular investment service are required to set up a direct debit with a minimum regular investment of £25 per month. Interactive Investor is therefore a good option for those looking to trial it without having to commit to an initial large deposit. Investors do, however, need to keep in mind the flat monthly fee of at least £9.99, as well as the £5.99 standard dealing charge, which can make it expensive for those with smaller pots.
For Vanguard, meanwhile, the minimum lump sum investment is £500, with a minimum monthly investment of £100.
Interactive Investor vs Vanguard - fees
Vanguard's flat fee of 0.15%, which is capped at £375 for accounts over £250,000, make it one of the best-value options in the market. It is, however, even cheaper to invest in Vanguard funds through Interactive Investor if you are investing more than £80,000 in either an ISA or GIA. You will also benefit from much greater investment choice rather than being limited solely to Vanguard's own funds.
We explain this in more detail in our independent Vanguard review.
If you are investing in Interactive Investor, you need to keep in mind how many changes you are likely to make to your portfolio as there is a standard trading charge of £5.99 on its £9.99 per month subscription service, although one trade per month is included within the monthly fee. There are full details of the trading costs in our Interactive Investor review.
Interactive Investor vs Vanguard - customer reviews
According to independent customer review site Trustpilot, both Interactive Investor and Vanguard score well, securing an overall score of 4.0 or more out of 5.0 stars. Interactive Investor, however, is particularly impressive, with 4.7 out of 5.0 stars, based on almost 20,000 reviews, compared with fewer than 2,000 reviews for Vanguard. Overall, 80% of respondents thought Interactive Investor was "excellent", compared with 60% for Vanguard. Both were praised for good customer service and ease of use.
Summary: Interactive Investor vs Vanguard
If you are looking to invest in a range of funds and investment types, Interactive Investor will be the natural choice over Vanguard because the latter only offers access to its own funds. If, however, you are contemplating whether to invest in Vanguard either directly through Vanguard Investor or instead through Interactive Investor, the decision will largely be guided by how much you are likely to invest. If you are investing up to £80,000 and are unlikely to go over that amount, Vanguard's 0.15% flat fee makes it the cheaper option. However, for investments over £80,000 it works out to be more cost effective to invest with Interactive Investor.
If a link has an * beside it this means that it is an affiliated link. If you go via the link Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. But as you can clearly see this has in no way influenced this independent and balanced review of the product. The following link can be used if you do not wish to help Money to the Masses - Hargreaves Lansdown, Interactive Investor