Charles Schwab versus TD Ameritrade - compare IRA accounts, commissions, investing fees, trading tools, offerings, pros and cons. Which stock broker is better?

Schwab vs. TD Ameritrade Introduction

Which investment firm is able to deliver the brokerage services you seek, Schwab or TD Ameritrade? The latter has forex trading, while the former has investment-advisory services.

Here’s the rest of the story:

Comparison Table

TD Ameritrade Rating Charles Schwab Review
Rating 4.5-star brokerage firm rating Charles Schwab rating
Stocks $0 $0
Mutual Funds $49.99 $49.99
Initial Funding Requirement $0 $1,000
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
Full Account Transfer $0 $50
Partial Account Transfer $0 $25
Account Closing Fee $0 $0
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
Open an account $0 stock/ETF trades + transfer fee refund. Open Schwab account and get $0-fee stock trades.


Pros and Cons of TD Ameritrade

TD Ameritrade is really ideal for investors who need the following features:

- Top-level customer support
- Large number of account types
- Advanced software

The broker-dealer does have these weaknesses, though:

- No managed accounts
- Margin rates are steep


Pros and Cons of Schwab

Schwab outperforms in these areas:

- Portfolio management
- Low-cost funds
- Global trading

The company does have a few drawbacks, though:

- No forex trading
- Robo accounts have questionable policies


Which Broker Has the Better Investment Offerings?

Traders at Schwab have access to the following financial vehicles inside of self-directed accounts:

  • Equities
  • Fixed income
  • ETFs
  • Mutual funds
  • Closed end funds
  • Futures

Besides stocks on the big U.S. exchanges, Schwab also offers trading on the over-the-counter marketplace and several foreign exchanges. Both services do charge commissions, but the services open up lots of possibilities.


Schwab vs Ameritrade


Besides its self-directed service, Schwab also has an extensive investment-advisory program. Offering both automated and old-school management, pricing starts at 0.00% with a $5,000 minimum deposit. To justify the free service, Schwab uses a large cash position in every robo account.

TD Ameritrade does not have managed accounts, either in robo or traditional format. It does provide self-directed trading in the following asset classes:

  • Equities
  • Fixed income
  • ETFs
  • Mutual funds
  • Closed end funds
  • Futures
  • Forex

So TD Ameritrade adds currency trading to the mix. But it does not provide trading in foreign stocks.

The first category is a tie.


Which Firm Is the Outperformer for Research and Education?

On the Schwab website, we found a large selection of educational materials. The top menu has three tabs (Learn, Products, and Research) that contain all of these resources.

For general investment education, there is a Trader Learning Center. This hub has educational articles on various security types with videos and images. It’s easy to browse through and click on links to move to other topics.

There is an education search engine that can look for learning materials by format (podcast, video, slideshow, etc.) and subject.

For security research, Schwab has screeners for all of its asset classes except futures contracts. The stock screener can scan by at least a hundred different criteria. Examples include:

- YTD performance
- Price/Cash Flow
- Return on Equity (TTM)
- 10 & 20 Day SMA Cross

Stock profiles have lots of data points on them, including pdf reports from 7 analysts.

Over at TD Ameritrade, we found another treasure trove of investment information. The brokerage firm operates its own television network (TD Ameritrade Network) and publishes a quarterly newsletter (The Ticker Tape). Besides these very good resources, the company produces webcasts, in-person events, articles, videos, and much more.


TD Ameritrade or Schwab


Here are a few examples of videos we found on the TDA website:

- Investing Basics: ETFs
- Individual Bonds vs. Bond Funds: What’s the Difference?
- What Are Currency Pairs?

Security profiles have lots of information. The brokerage firm supplies reports from 8 analysts, and it’s possible to enable alerts for rating changes.

It’s pretty even in this category.


Who Has Better Customer Service?

TD Ameritrade customers can contact an associate in a number of ways. Its website has a robo chat tool, which itself does a decent job of answering questions. A human associate can be reached through this widget simply by typing “human.”

Then there is the internal e-mail system. It is really handy for uploading documents. Messages can be received and sent.

TD Ameritrade has brick-and-mortar offices throughout the United States, and its phone service is staffed all hours of the day and night.

Schwab also offers phone support 24 hours a day, 7 days a week. Like its competitor here, Schwab has a human chat service. Unlike TD Ameritrade, the Schwab website does not have robo chat. There is also no internal messaging on Schwab’s site, which is strike two.

We do like the self-help center on the Schwab site, though. It has a lot of useful tools, including paperless settings and the ability to change beneficiaries on an account.

Like TD Ameritrade, Schwab has lots of branch locations, including some overseas locations.

For its internal messaging and AI chat, TD Ameritrade seems a little stronger in this category.


For Margin, Is It Schwab or TD Ameritrade?

Cash and margin accounts are available at both investment firms in this competition. On the Schwab website, a cash account can be upgraded to a margin account on the Account Settings page, which is underneath the Service tab. However, a margin account cannot be downgraded to cash online. On the TD Ameritrade website, it is possible to both upgrade and downgrade accounts online.

Limited margin for retirement accounts is available at both firms. Both companies also have lots of margin education on their sites, and these resources (articles, videos, and FAQs) will definitely be of value to beginners.

You can’t have a margin discussion without looking at rates, and it goes downhill at this point. TD Ameritrade begins at a very pricey 11%, while Schwab starts at %, which itself is pretty expensive. Both firms offer negotiated rates above half a million dollars in loans.

Schwab wins this category for slightly lower rates.


And Who Has a More Advanced Website?

We really like Schwab’s website. The top menu makes navigation fairly easy, but yet there are lots of powerful tools on it. At the bottom of the screen, there is an unobtrusive trade bar. It delivers real-time data on an entered ticker symbol and can even produce a small pop-up graph. However, it can’t submit orders, which is a weakness corrected on TD Ameritrade’s website.


Schwab or TD Ameritrade


TD Ameritrade actually gives a name to its trade bar: SnapTicket. This is well-deserved as the widget does offer quick trading. For example, it can submit an order swiftly with the use of a few characters. For example, typing b400amzn2100.00 will submit a buy order for 400 shares of Amazon at a limit of $2,100.00.


TD Ameritrade vs Schwab


Regular mode is also possible on SnapTicket with trailing, stop, market, and limit orders.

Although TD Ameritrade is clearly the outperformer in the realm of trade bars, it doesn’t have a browser platform, a great tool that Schwab does have. Called StreetSmart Central, the software has some really powerful trading tools, not least of which is charting with tick-by-tick price data.

The order ticket on Central can be used for lots of different asset classes, and we found some professional-level trade types. They include:

- OTO (one triggers other)
- Contingent on volume
- MOC (market on close)

Some of these advanced orders are available on TD Ameritrade’s website. However, charts on the TDA site don’t quite measure up to the very good graphing capability of Central. For instance, a chart can be expanded vertically on Central, but this is not possible on Ameritrade’s site. Central also has a lot of drawing tools and plot styles for its graphs that are absent on TD’s graphs.

Overall, TD Ameritrade seems slightly better for websites.


Which Desktop Program Outperforms?

StreetSmart Edge is Schwab’s desktop trading system. It also has a cloud-based cousin that can be launched from the website (look for the link under the Trading Hub tab in the upper-right corner of the website). The desktop program is the more powerful software.


Charles Schwab vs TD Ameritrade


Edge has a lot of great features that we really like. Examples include:

  • Level 2 quotes
  • Free CNBC
  • Full-screen charting with lots of tools
  • Easily customizable
  • Direct-access routing

thinkorswim is TD Ameritrade’s desktop platform. Like Edge, it has a demo mode, which makes practicing and learning the software a little easier. thinkorswim has a lot of the same features that Edge has, although it is not as customizable (and not as user-friendly).


TD Ameritrade or Charles Schwab


thinkorswim has more technical studies and plot styles than Edge. thinkorswim’s trade ticket also has more advanced order types. These include the following:
  • 1st triggers all
  • Pair
  • OCO (one cancels other)
  • 1st triggers sequential

Although thinkorswim is harder to learn, TD Ameritrade included some educational materials within the software to help customers learn it.

We give the victory here to TD Ameritrade.


Is It Schwab or TD Ameritrade for Mobile Apps?

Schwab and TD Ameritrade both have two mobile apps each, so we have a lot of ground to cover here.


TD Ameritrade vs Charles Schwab


There is a thinkorswim app that functions on phones and tablets; furthermore, it has a smartwatch app companion. Combined, the three provide a lot of trading power. Charts amazingly have hundreds of technical studies. Level II data are included, and the trade ticket has lots of professional-level features, including direct-access routing. It can be used to trade forex and futures.

TD Ameritrade’s regular app has educational videos, market news, an economic calendar, mobile check deposit, and so much more. Although streaming video news is absent, CNBC can be found on the thinkorswim app.

Schwab has a StreetSmart app that can trade futures contracts. It is only intended for phones. During our testing of the platform, we found it poorly designed and somewhat buggy. Unlike the thinkorswim app, it doesn’t have a smartwatch companion.


Schwab versus TD Ameritrade


Schwab’s regular app does have an app for Apple Watch. The watch software has a watchlist, charts, and trade data on specific securities.

Unlike the StreetSmart app, the regular Schwab app is very well-designed and is very useful. During our investigation, we found the following features:

  • Alerts
  • Watchlist (mobile only and others that sync with the website)
  • Market news
  • Artificial intelligence
  • Heat maps
  • Mobile check deposit

We pick TD Ameritrade primarily for its thinkorswim app.


In the Last Category, Which Firm Succeeds in Other Services?

Extended Hours: Traders at both brokerage firms in this contest can submit orders for execution before the opening bell and after the closing bell. TD Ameritrade has a few more minutes of total trading time. Plus, it has overnight trading in a short list of funds.

Fractional Shares: Schwab customers, but not TD Ameritrade clients, can buy S&P 500 stocks in whole dollars.

Individual Retirement Accounts: TD Ameritrade and Schwab both have large selections of IRAs.

Initial Public Offerings: We found IPO hubs on both websites. It’s easy to browse through and make a conditional offer to purchase.

DRIP Service: Available at both investment firms.

Periodic Mutual Fund Investing: Ditto.

Cash Management Features: FDIC insurance, debit cards, and checkwriting are all available at both firms. Only Schwab reimburses ATM fees worldwide.

TD Ameritrade has a slight advantage for miscellaneous services.


Promotions

TD Ameritrade: $0 stock/ETF trades + transfer fee refund.

Charles Schwab: Open Schwab account and get $0-fee stock trades.



Our Recommendations

ETF & Stock Trading: Schwab has fractional-share trading in 500 stocks, while TD Ameritrade has the better desktop platform. Take your pick.

Small Accounts: Neither broker-dealer has any minimums or ongoing fees for self-directed accounts.

Mutual Fund Trading: TD Ameritrade has more mutual funds with no commission. Schwab charges as much as $74.95 for some mutual funds.

Beginners: Very close here, too. The thinkorswim mobile app has a practice mode, which StreetSmart Mobile lacks.

Long-Term Investors and Retirement Savers: Schwab has better financial-planning services. TD Ameritrade has more free target date mutual funds.


TD Ameritrade vs Charles Schwab Summary

Schwab and TD Ameritrade are powerhouses in the brokerage industry. They both have excellent software and good customer service (in an era where brokerage firms are cutting back on customer support). Taken as a whole, TD Ameritrade does have an edge over its rival in this survey, primarily due to its more advanced trading tools and better selection of mutual funds.


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Updated on 5/12/2022.

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