Vanguard vs Interactive Investor – Fees, Investments & Features Compared

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The Generation Money Guarantee

At Generation Money our purpose is to help you make better financial decisions. All of our articles are independently written and/or edited by finance professionals and adhere to strict editorial guidelines. This post may contain links which, if clicked, could result in a payment to the site. These links never impact our editorial policy and all rankings and product recommendations remain unbiased. For more details, read how this site is financed.

Offer: Welcome Bonus of up to £50 when you invest at least £100 with InvestEngine (Ts&Cs apply)

For this comparison review, I’ll be comparing Vanguard vs Interactive Investor, two of the leading investment platforms in the UK.

I’ll be putting Vanguard and Interactive Investor head-to-head on a number of metrics to see which comes out on top. This includes investment options, products, features and, of course, fees.

Overpaying on your investment platform can be a major drain on your returns over time. As an experienced investor and a Chartered Accountant, I know how important it is to balance costs against returns!

Get £200 cashback or £100 in free trades

SIPP: Open or transfer a SIPP by 31st May and get £200 cashback.

ISA: New customers who open an Interactive Investor ISA or Trading Account by 19th May will get £100 in free trades.

Terms apply. Capital at risk if you invest.

Get £200 cashback and £100 in free trades​

SIPP: Open or transfer a SIPP by 31st May and get £200 cashback.

ISA: New customers who open an Interactive Investor ISA or Trading Account by 19th May will get £100 in free trades.

Terms apply. Capital at risk if you invest.

Read on for our full Vanguard vs Interactive Investor comparison, or use the links below to jump straight to a particular section.

You may also be interested in:

Vanguard vs Interactive Investor: At A Glance

Here’s my overview of Interactive Investor vs Vanguard in case you don’t want to read the whole comparison. 

The table below looks at the key features compared against each other.

VanguardInteractive Investor
Management Fees0.15% (capped at £375 per year for accounts over £250k)

0.60% for Managed ISA (includes 0.15% platform fee)
Subscription based fees:

Investor Essentials: £4.99 per month (max. investment of £50k)
Investor: £11.99 per month
Super Investor: £19.99 per month
Pension Essentials: £5.99 per month (max. £50k)
Pension Builder: £12.99 per month (min. £50k)

See Fees section below for more, inc. dealing fees
Minimum Investment£500 or £100 per monthNo minimum investment to open an account
£25 per month minimum for regular investing
ProductsStocks & Shares: ISA, JISA

GIA

SIPP (Pension)
Stocks & Shares ISA
Stocks & shares JISA (JISA only available with Investor & Super Investor Plans)

Trading Account / GIA, Joint Trading Account, Company Account

SIPP (Pension)

Cash Savings
Number Of Ready-Made Portfolios5 Life Strategy
11 Target Retirement
5 Managed ISA portfolios
5 (3 growth and 2 income)
Ethical Funds / Portfolios17 ESG fundsAccess to ESG funds
ACE40 list of ii selected sustainable investment funds 
Individual Funds87 (including 17 ESG funds)3,000+
DIY PortfolioYesYes
Share DealingNoYes
FSCS ProtectionYesYes
Generation Money OffersN/A£100 Cashback Offer. Terms apply.

What You Need To Know

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  • With Interactive Investor you can invest in thousands of funds, stocks and bonds from different providers
  • Vanguard only allows you to invest in Vanguard funds. For more investment choice, Interactive Investor is the clear winner
  • However, if you want to invest only in Vanguard funds and have under £80k to invest, Vanguard is cheaper
  • If investing in Vanguard funds and investing more than £80k, then Interactive Investor is cheaper (Interactive Investor offers the full range of Vanguard funds)
  • Vanguard does not have an app, unlike Interactive Investor. There’s also more research, tools and guides with Interactive Investor
  • The cheapest way to invest in Vanguard’s index funds is InvestEngine

What You Need To Know

  • With Interactive Investor you can invest in thousands of funds, stocks and bonds from different providers
  • Vanguard only allows you to invest in Vanguard funds. For more investment choice, Interactive Investor is the clear winner
  • However, if you want to invest only in Vanguard funds and have under £80k to invest, Vanguard is cheaper
  • If investing in Vanguard funds and investing more than £80k, then Interactive Investor is cheaper (Interactive Investor offers the full range of Vanguard funds)
  • Vanguard does not have an app, unlike Interactive Investor. There’s also more research, tools and guides with Interactive Investor
  • The cheapest way to invest in Vanguard’s index funds is InvestEngine

What is Vanguard?

Vanguard was founded in the USA in 1975 and is known for creating the first index fund. An Index fund is a passive investment vehicle which seeks to track the performance of a major index over time, rather than picking individual companies to invest in.

Index funds are now hugely popular and are often the lowest cost type of fund to invest in. Vanguard now has over 30 million investors worldwide, and offers 87 funds to UK investors to choose from on its platform.

What is Interactive Investor?

Founded over 25 years ago, Interactive Investor is one of the leading investment platforms in the UK. It now has over 400,000 customers and offers a wide range of investment products and services.

In May 2022 it was taken over by Abrdn plc, one of the oldest and largest asset managers in the UK. As of April 2023, Interactive Investor has over £50 billion in Assets Under Administration.

Unlike many of its rivals, it charges a monthly subscription fee for its investment accounts instead of a percentage fee based on the size of your investments.

Vanguard vs Interactive Investor: Fees

Let’s look in more detail at costs for Interactive Investor vs Vanguard.

Vanguard has a simple fee structure – it charges a 0.15% platform fee on all investments, no matter how much you have invested, and is capped at £375 for investments above £250k.

Interactive Investor, by contrast, charges monthly subscription fees on different plans:

VanguardInteractive Investor
Platform Fees0.15%

Capped at £375 for investments over £250k
Subscription based fees:

Investor Essentials: £4.99 per month (max. investment of £50k)
Investor: £11.99 per month
Super Investor: £19.99 per month
Pension Essentials: £5.99 per month (max. £50k)
Pension Builder: £12.99 per month (min. £50k)

See Fees section below for more, inc. dealing fees
Actively Managed Portfolio Management Fees0.60% Managed ISA fee made up of:
Management fee: 0.30%
Platform fee: 0.15% 
Fund fees: 0.15%
0.22%-1.36%

Subscription fees above apply on top
Individual Stocks & Shares / Share DealingN/AUK shares & funds and US shares: £3.99 on all Plans

1 free monthly trade with Investor plan, 2 with Super Investor

Non-US international shares charged at £9.99 per transaction for all accounts except Super Investor which is £5.99

Dividend reinvestment £0.99 for all plans

If you have £39,900 or less to invest, then Vanguard is cheaper

If investing between £39,900 and £50,000, then Interactive Investor is cheaper.

Between £50,001 and £96,000, Vanguard is again cheaper.

But, if you’re investing more than £96,000, Interactive Investor’s £11.99 per month Investor plan is cheaper. This applies whether you’re investing through an ISA or a GIA.

This does not take into account dealing fees, though. Your first trade each month is free on Interactive Investor’s Invstor plan. Your first two traders per month are free on its Super Investor plan. Outside of this, each trade is £3.99 for UK funds and shares and for US shares. It’s £9.99 for non-US international shares.

So you will need to work out how frequently you plan to trade and take this potential extra cost into account on top of platform fees. Vanguard charges no dealing/trading fees.

Aside from cost, it’s important to note that you can only invest in Vanguard’s own funds through its platform. However, Interactive Investor allows you to invest in thousands of stocks and funds from different providers.

So, despite the fact that Vanguard is cheaper than Interactive Investor when investing the amounts detailed above, you will still have far more investment choice with Interactive Investor.

Ready-Made Portfolios

For ready-made actively-managed portfolios, the cost will depend on which portfolio you invest in with Interactive Investor, as it offers both growth and income portfolios. All of Vanguard’s Managed Portfolios have fees of 0.60% and only invest in Vanguard funds.

As an example, Interactive Investor offers a very competitively priced Low-Cost Income portfolio with annual charges of 0.47%, plus monthly subscription fees. However, Vanguard does not offer income portfolios.

Exchange Traded Funds (ETFs)

If you are only interested in investing in ETFs, then InvestEngine is cheaper than both Vanguard and Interactive Investor, even for investing in Vanguard ETFs. Read more in my InvestEngine vs Vanguard comparison.

InvestEngine is an investment platform that allows you to invest in ETFs without any platform or management fees, as long as you’re picking your own investments.

For example, you can invest in Vanguard’s S&P 500 index fund through InvestEngine and pay only the 0.07% fund costs. To do so through Vanguard would incur their 0.15% platform fee on top of the fund costs.

In addition, InvestEngine also has a managed service which will put together a portfolio for you, charging a fee of only 0.25%. This is also cheaper than both Interactive Investor and Vanguard’s managed services.

Up to £50 welcome bonus & up to £2,500 ISA bonus

Over 610 ETFs to invest in. Commission-free.

Use our exclusive link to get a free welcome bonus of up to £50 AND an additional bonus of up to £2,500 when you invest or transfer an ISA at InvestEngine.

Ts&Cs apply. Capital at risk if you invest.

Up To £50 Welcome Bonus & £2,500 ISA Bonus

OFFER: Use our exclusive link to get a free welcome bonus of up to £50 AND an additional bonus of up to £2,500 when you invest or transfer an ISA at InvestEngine.

Ts&Cs apply. Capital at risk if you invest.

Vanguard vs Interactive Investor: Products & Accounts

Vanguard and Interactive Investor both offer stocks and shares ISAs, General Investment Accounts (GIAs), Self-Invested Personal Pensions (SIPPs) and Junior ISAs (JISAs).

In today’s investment market the offering of each provider could be better. Neither offers a Lifetime ISA or a Junior SIPP, unlike Hargreaves Lansdown for example.

With Interactive Investor, you can also open a company trading account and a joint trading account for up to 4 people. If you want to invest through a company, or you run a company and want to invest your spare cash, then Interactive Investor could be a good option for you.

Interactive Investor also offers Cash Savings accounts, although it doesn’t offer a Cash ISA. It also used to offer a pension trading account, but this is now closed to new customers.

Vanguard vs Interactive Investor: Investment Options & Services

The key difference between Vanguard and Interactive Investor is that Vanguard only offers its own funds to invest in, in a relatively low-cost way. It does not provide funds or investments from any other provider on its platform.

There are more than 80 Vanguard funds to invest in on its platform, including its popular LifeStrategy and index funds. 

On the other hand, Interactive Investor provides thousands of funds to invest in from a range of providers including the likes of Blackrock, Fidelity and Vanguard. This in addition to thousands of shares, corporate bonds and gilts.

As mentioned under fees, it’s cheaper to invest in Vanguard funds through Interactive Investor if you’re investing more under £39,900 or between £50,001 and £96,000. 

In addition, Interactive Investor offers 5 ready-made portfolios which you can invest in, 3 of which are growth funds and 2 income funds. These come with higher fund charges than passive index funds. 

Vanguard offers 5 ready-made portfolios to choose from in its Managed ISA, each with differing risk levels. These portfolios are managed by Vanguard and monitored monthly. They also attract higher charges of 0.60% instead of 0.25% if picking funds yourself.

Overall, Interactive Investor is the clear winner when it comes to range of investment options.

Get £200 cashback or £100 in free trades

SIPP: Open or transfer a SIPP by 31st May and get £200 cashback.

ISA: New customers who open an Interactive Investor ISA or Trading Account by 19th May will get £100 in free trades.

Terms apply. Capital at risk if you invest.

Get £200 cashback and £100 in free trades​

SIPP: Open or transfer a SIPP by 31st May and get £200 cashback.

ISA: New customers who open an Interactive Investor ISA or Trading Account by 19th May will get £100 in free trades.

Terms apply. Capital at risk if you invest.

Vanguard vs Interactive Investor: Research, Tools and Advice

Given that Vanguard solely offers its own funds to invest in through its platform, it may be no surprise that it has a limited range of tools and research. 

By contrast, Interactive Investor has a good range of investment guides, explainers and research available, both on its website and through the app. 

However, it lacks the chart tools and analysis that you can get with CFD brokers, such as Fineco Bank. However, a note of caution if you’ve never traded CFDs as they are highly risky financial instruments. 

Vanguard vs Interactive Investor: Which Has The Better App?

Vanguard does not have an app, so you’ll have to accept only being able to log in online through its website to track your investments. 

Interactive Investor does have an app and it’s easy to use with a clear layout.

You’re able to trade, create or edit watchlists, view market research and news and fund your account directly through the Interactive Investor app.

interactive investor app screenshot
Research tab in the Interactive Investor app

The home screen clearly presents your investment portfolio and performance, and you can contact support through the app.

Vanguard vs Interactive Investor: Is My Money Safe?

Both Vanguard and Interactive Investor are regulated by the Financial Conduct Authority (FCA) and have Financial Services Compensation Scheme (FSCS) protection.

This means that if either company were to go bust, your money would be protected up to the value of £85,000 by the regulator. 

It should be noted that some of the funds offered by both Vanguard and Interactive Investor are located outside of the UK and therefore may not necessarily be covered by FSCS protection. 

You can check this in the Key Investor Information Document that each fund must provide.

Vanguard vs Interactive Investor: Pros & Cons

To summarise my comparison of Vanguard vs Interactive Investor, I’ve outlined below what I believe are the main pros and cons of each investment platform.

Vanguard Pros & Cons

Vanguard Pros

  • Platform charges are less than Interactive Investor when investing up to £39,900 or between £50,001-£96,000 and picking your own investments
  • Over 80 Vanguard funds to choose from including its popular LifeStrategy and Target Retirement funds
  • Competitively priced Managed ISA for ready-made investments
  • Customisable portfolios

Vanguard Cons

  • Limited only to investing in Vanguard’s own funds
  • It’s platform fees are more expensive than Interactive Investor if you’re investing between £39,900 and £50,000 or more than £96,000
  • Higher minimum investment than Interactive Investor, with £500 lump sum or £100 per month required
  • Only offers growth portfolios in its Managed ISA, so no income portfolios
  • Investing in Vanguard’s own funds is cheaper with InvestEngine than with Vanguard
  • No app, online login only

Interactive Investor Pros & Cons

Interactive Investor Pros

  • No minimum upfront investment, with regular investing starting at £25 per month
  • 3 risk-based ready-made portfolios suitable for beginner investors
  • 2 ready-made income focused portfolios, unlike Vanguard which does not offer income portfolios
  • Thousands of investments to choose from across funds, shares and bonds
  • Subscription fee based pricing means that when investing in funds, the more you have to invest the lower the effective cost, making Interactive Investor cheaper than Vanguard if investing more than £96k or between £39,900 and £50,000
  • Wide range of products to choose from, including the main ISA and SIPP accounts
  • Cash savings provided by Flagstone, with FSCS protection
  • Log in to your account online and through the app
  • Lots of suggested funds lists to help you get started investing
  • Curated list of ethical investment ideas (ACE 40)

Interactive Investor Cons

  • More expensive than Vanguard when investing less than £39,900 or between £50,001-£96,000
  • No LISA or Junior Sipp, unlike other large investment platforms such as Hargreaves Lansdown

Vanguard vs Interactive Investor: Final Verdict

If you’re looking to invest in a wide range of funds, as well as shares and bonds, then you will prefer Interactive Investor, as Vanguard only offers its own funds to invest in.

However, if you want to invest only in Vanguard funds then you will prefer Vanguard if you’re investing under £39,900 or between £50,001-£96,000 as it’s cheaper than Interactive Investor. 

But, if you’re investing more than £96,000 it works out cheaper to invest in Vanguard funds through Interactive Investor. The saving is larger the more you have invested, as ii’s platform fees are capped at £143.88 per year for its Investor plan and £239.88 per year for its Super Investor plan vs Vanguard’s cap of £375 per year. You should take into account dealing fees, though, depending on how frequently you want to trade.

In addition, Interactive Investor has an app, unlike Vanguard, and a wider range of investment tools and features. 

Get £200 cashback or £100 in free trades

SIPP: Open or transfer a SIPP by 31st May and get £200 cashback.

ISA: New customers who open an Interactive Investor ISA or Trading Account by 19th May will get £100 in free trades.

Terms apply. Capital at risk if you invest.

Get £200 cashback and £100 in free trades​

SIPP: Open or transfer a SIPP by 31st May and get £200 cashback.

ISA: New customers who open an Interactive Investor ISA or Trading Account by 19th May will get £100 in free trades.

Terms apply. Capital at risk if you invest.

If you only want to invest in ETFs and not in mutual funds or investment trusts, then InvestEngine is cheaper than both Vanguard and Interactive Investor. 

InvestEngine charges no platform fees, making it cheaper to invest in Vanguard funds for any investment size than doing so though Vanguard’s own platform.

Up to £50 welcome bonus & up to £2,500 ISA bonus

Over 610 ETFs to invest in. Commission-free.

Use our exclusive link to get a free welcome bonus of up to £50 AND an additional bonus of up to £2,500 when you invest or transfer an ISA at InvestEngine.

Ts&Cs apply. Capital at risk if you invest.

Up To £50 Welcome Bonus & £2,500 ISA Bonus

OFFER: Use our exclusive link to get a free welcome bonus of up to £50 AND an additional bonus of up to £2,500 when you invest or transfer an ISA at InvestEngine.

Ts&Cs apply. Capital at risk if you invest.

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Interactive Investor – £200 cashback

Get £200 cashback when opening and investing in a SIPP, or transferring a SIPP, to Interactive Investor. Terms apply.

Capital at risk if you invest. Interactive Investor is regulated by the FCA and has FSCS protection.

Interactive Investor – £200 cashback

Get £200 cashback when opening and investing in a SIPP, or transferring a SIPP, to Interactive Investor. Terms apply.

Capital at risk if you invest. Interactive Investor is regulated by the FCA and has FSCS protection.

 

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