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How to Set Up Vanguard Automatic Investing

How to Set Up Vanguard Automatic Investing
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Do you struggle with making regular contributions to your investment account? It happens. You get busy, life throws you curveballs, and before you know it, the month passes by and you don’t invest.

Setting up automatic investments is the best way to offset the risk. Even missing a month or two of regular contributions can make a big difference in reaching your goals. Many brokers offer automatic investing, but we prefer Vanguard automatic investing for its many beneficial features.

It’s easy to use and ensures we always invest, no matter what’s going on in our lives.

Does Vanguard Have Automatic Investing?

Vanguard offers automatic investing in its mutual funds only. Any investor can set up automatic investing in their dashboard. Before you set it up, you must determine the following:

  • The bank account you’ll withdraw the funds from
  • The frequency you want to invest in (monthly, twice a month, etc.)
  • The date your automatic investments will start
  • The date to stop automatic investments (or choose ‘Until I stop this plan’)

Vanguard Automatic Investing: Pros vs Cons

Setting up Vanguard automatic investing is easy, but before you do, you should know the pros and cons of automatic investing.


  • You’ll pay yourself first. Most of us focus on paying the bills and other monthly spending before paying our investment accounts (or even savings). It’s not wrong, but it leads to not investing or saving more often than not. Automatic investing ensures you always invest, no matter what.
  • It’s easier to budget. When you know what you need to spend or save each month, it’s easier to stay on target. When you set up your budget, include a line item to set up automatic investments and take the thinking out of it. It provides incredible peace of mind.
  • You can take advantage of dollar-cost averaging. When you buy investments at various prices, you vary the number of shares you can buy. Some months you may buy more than others, but you may average a larger investment at lower share prices overall.
  • You avoid overspending and not investing. Temptation gets the best of us. If you know you have the money that you ‘should’ invest, but see something you really want, you may splurge and think you’ll make it up next month. Do this too often and you’ll be behind on your goals. Automatic investing prevents it.
  • You can take advantage of mutual funds. Vanguard automatic investing is only available in their mutual funds, which means you’ll have a well-diversified investment that you regularly contribute to.
  • You can invest small amounts. Too many of us assume we must invest large amounts of money or we can’t invest. That’s not true, and when you set up automatic investments, you can contribute as much or as little as you want.


  • If you have unexpected expenses, you may feel like you’re struggling financially for a bit. The regularity of investing is great, but those months that your car breaks down or your house needs repairs, you may wish you had that extra money in your bank account and not tied up in investments.
  • You can only invest in Vanguard mutual funds. Sometimes it’s great to invest in mutual funds, but if you have your eye on other investments, you can’t use the automatic investment option.
Vanguard automatic investing

How Do I Set Up Automatic Investment with Vanguard?

Vanguard automatic investing is easy to set up. Once you have a Vanguard account, follow these simple steps:

  1. From your homepage, select ‘Profile and Account Settings’ from the My Accounts drop down.
  2. In the ‘Profile and Account Settings’ tab, select ‘Automatic Investment.’
  3. On the Investments page, scroll to the bottom and select ‘Add Automatic Transaction.’
  4. Next, you’ll be on the ‘Set up Automatic Investments’ page, this is where you enter your information for automatic investments.

Pay close attention in this section – this is where you set up the automatic investments. Your bank account information and amount to invest are pretty straightforward. A few other factors you’ll need to know include:


You have five options for frequency:

  • Weekly
  • Every other week
  • Two times a month
  • Monthly
  • Yearly

We suggest setting up the frequency to match your paydays unless you choose yearly.

End Date

You can choose ‘Until I stop this plan’ and you manually stop the automatic investments when you need to or decide it’s time or set a specific date.

Total Amount to Invest

The total amount to invest depends on the type of account you set up. If it’s a retirement account (IRA), you can’t exceed the annual maximum set by the IRS. In 2023, the max is $6,500 if you’re under age 50 and $7,500 if you’re age 50 or older.

If it’s an individual brokerage account (taxable account), there’s no limit to how much you can invest.

Allocate Your Investment

Finally, you must choose how to allocate your investment. Vanguard gives you three options:

  • By dollar amount – You can set up the automatic investment to send a certain dollar amount to each mutual fund you have with Vanguard.
  • By percentage – You can set up your investment to be split up, with a percentage going to each mutual fund you own.
  • Equally – Vanguard will automatically split your investment equally among each mutual fund you own.

Once you complete the form, review it before you hit ‘submit’ and you’re all set with automatic investing.

How Do You Stop Vanguard Auto Investing?

If you want to stop your Vanguard automatic investments, it’s easy to do. They allow you to stop your automated investments at any time.

Follow these steps to cancel auto investments in your IRA or individual broker account:

  1. Select ‘Profile and Account Settings’ from your homepage.
  2. In the ‘Profile and Account Settings’ tab, select ‘Automatic Investment’
  3. On the ‘Investments’ page, you’ll see your automatic investments
  4. Choose the one you want to cancel and click ‘Delete’

Once you delete the automatic contributions, you’re back to manual investments.

Can You Automatically Invest in ETFs?

Vanguard only offers automatic investments in mutual funds. It may seem frustrating, but there’s a reason and this is across the board, not just at Vanguard.

Mutual funds trade once a day after the market closes. ETFs trade on the secondary market throughout the day. The prices change multiple times a day. Without knowing how much you’re willing to pay, automatic investing in ETFs is impossible.

You can diversify your portfolio by automatically investing in mutual funds each week or month, and manually investing in ETFs, if you want more diversification than the mutual fund offers.

Vanguard automatic investing

Should You Use Dollar Cost Averaging at Vanguard?

Using dollar cost averaging is a great way to decrease the risk of a large lump sum investment. For example, let’s say you can invest $10,000 all at once or spread your investments out over a year, investing $833 a month.

If you invest it all at once, you run the risk of getting hit with a large market downturn. If you invested all $10,000 at once and the market crashed, you could lose the entire $10,000. Now, history shows that stocks and bond markets bounce back over time, and usually exceed the returns any cash investments may provide.

But, if you use dollar cost averaging, you may invest the same amount over a year at a lower average share price. Not only does this increase your profits potentially, but it also decreases the emotional turmoil a lump sum investment with a major loss could cause.

But, if the market is doing well, investing the entire $10,000 at once takes advantage of an increasing market and large gains right off the bat.

So should you use dollar cost averaging? It depends on your risk tolerance and overall goals.

Vanguard Automatic Investing Wins the Race Slow and Steady

Even if you only set up a small monthly investment, slow and steady always wins the race. Vanguard automatic investing ensures that you always invest, whether it’s to maximize your IRA contributions for the year or to invest in a taxable account. Regularly putting money away ensures that you get closer to your financial goals every month.

New to investing? Check out our article on How to Invest Money: A Beginner’s Guide!