TD Ameritrade or Etrade brokerage firm comparison: fees, commissions, benefits, good and bad. Which brokerage to choose.

TD Ameritrade Review Etrade Review
Rating 4.5-star brokerage firm rating Etrade brokerage firm rating
Stocks $6.95 $6.95
Options (per contract) $0.75 $0.75
Mutual Funds $49.99 $19.99
Initial Funding Requirement $0 $500
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
IRA Premature Distributions $0 $25
Full Account Transfer $0 $60
Partial Account Transfer $0 $25
Account Closing Fee $0 $50
Trading Experience & Technology brokerage ratings brokerage ratings
Mobile brokerage ratings brokerage ratings
Research Amenities brokerage ratings brokerage ratings
Portfolio & Analysis Reports brokerage ratings brokerage ratings
Customer Service and Education brokerage ratings brokerage ratings
Good
  • No inactivity or maintenance fees
  • No-fee IRA accounts
  • Wide range of investing options
  • Objective, outstanding third-party research from trusted sources
  • Sophisticated trading platforms, Thinkorswim and Trade Architect, free of charge
  • Over 13,000 mutual funds
  • Over 296 commission-free ETFs from 13 providers
  • Free Dividend Reinvestment Plans (DRIPs)
  • Virtual trading
  • Great customer service
  • Over 100 local branches
  • No inactivity or maintenance fees
  • No-fee IRA accounts
  • Wide variety of investing options
  • Good 24/7 customer service
  • Banking products and services
  • Over 100 commission-free ETFs
  • Selection of no transaction fee mutual funds
  • Advance platform for active traders at no charge
  • Streaming charts, Level II quotes
  • Access to international markets
  • In-person guidance at around 30 local branches around the country
Bad
  • High mutual fund commissions
  • Very high trading commissions
  • Advanced trading platform is available for free to an investors who execute 30 stocks or options per calendar quarter
Open an account Trade free for 60 days + get up to $600. Open an account with Etrade

 

TD Ameritrade vs. Etrade Brokerage Comparison

TD Ameritrade and Etrade are among the largest brokerages in the country. Companies offer services of discount and full house brokerages. Below is a comparison of self-directed accounts offered by Etrade and TD Ameritrade.

Etrade charges $6.95 on stocks and ETFs. It offers a discount of $4.95 on every trade to all investors who execute more than 30 trades per quarter. With Ally Invest and Optionshouse investors have $4.95 per trade commissions despite of their trading activity level.

There are over 100 commissions-free ETFs available through both brokers. In 2015, Forbes ranked TD Ameritrade's selection of commission-free ETFs as the best for investors who are looking for the most liquid and lowest cost ETFs. TD Ameritrade ETFs with no cost are independently picked by Morningstar as the best ETFs in many categories such as fixed income, equity, commodities and more.

Options commissions are the same for both firms.

Investment firms offer extensive selections of mutual funds, including wide arrays of no-transaction-fee (NTF) funds, no-load mutual funds. There are more than 11,000 mutual funds available through TD Ameritrade and over 8,000 through Etrade.

Mutual fund cost for Etrade is among the lowest in the industry. The firm charges $19.99, which is almost twice higher than the $9.95 imposed by Ally Invest. Mutual fund transaction fees at TD Ameritrade carry a very pricey $49.99 charge.

There is a difference in account opening minimums. Etrade requires an initial deposit of $500 to open a new account. An account at TD Ameritrade can be opened with no initial investment. It is the opposite for retirement accounts. An initial deposit to open an IRA at TD Ameritrade is $2,000, whereas Etrade offers to open an account with no deposit.

Account fees are very similar. Brokerages do not charge maintenance, inactivity or setup fees. No-fee IRAs are available at both companies. Etrade has a premature distribution fee, which is $25.

Etrade offers great free research that includes third-party resources, but the firm's advanced trading platform Etrade Pro is available at no charge only to frequent traders. It will cost around $100 per month to all those who don't meet the firm's active trader eligibility requirements but would like to take advantage of the platform. However, the less advanced platform Etrade 360 is available at no charge to any type of traders.

Like Etrade, TD Ameritrade provides a sophisticated trading platform. In fact, two advanced software-based platforms and one website-based platform are available through TD Ameritrade. Thinkorswim, one of the two robust TD Ameritrade's platforms, is ranked as the best in class. All three platforms are absolutely free to all customers. It offers savings of $100 per month when using one of the robust TD Ameritrade platforms compared with Etrade's platform!

TD Ameritrade's beginning investors can start trading with broker's intuitive and user-friendly website-based platform, and switch to using a more robust platform without the need to change a brokerage or pay additional fees.

TD Ameritrade offers an extensive, one of the best research resources on the market. There are thirteen trusted independent research resources available for all customers with no additional charge.

In addition, Etrade and TD Ameritrade offer one-on-one advice and guidance for customers at their local branches. TD Ameritrade has over 100 local offices, while Etrade has only 30 branches.

Basic banking services are provided by both brokerage firms. Brokers offer interest-bearing checking accounts and free debit cards. Debit cards can be used at any ATM free of charge. A great rewards credit card with no annual fee is available for TD Ameritrade customers.

Etrade and TD Ameritrade have been in the industry for a long time. Firms offer excellent brokerage services and great customer support. Nevertheless, the high credibility, great service and additional benefits provided by TD Ameritrade and Etrade come at a price. Commissions are very high. The good news however is that price-conscious investors can still find less expensive brokers not at the expense of the quality of the services offered. For example, Scottrade, another large and reputable brokerage firm in the country with a long history in the industry, offers the lowest commissions among the five largest online investment companies in the country.

 

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