TD Ameritrade versus Etrade - compare IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which brokerage firm is better?

Overview

E*Trade and TD Ameritrade advertise heavily and offer a lot of the same services and products at a similar price. Are there any real differences between these two companies? Is one broker better than another for certain investment strategies? This article will attempt to find out.


Comparison Table

TD Ameritrade Review Etrade Review
Rating 4.5-star brokerage firm rating Etrade brokerage firm rating
Stocks $0 $0
Options (per contract) $0.65 $0.65
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
Open an account $0 commission stocks/ETFs + get up to $600 cash. At E*TRADE, get $0 trades + 65₵ per options contract.

What Investment Vehicles Do the Two Firms Offer?

TD Ameritrade clients can invest in stocks, bonds, mutual funds, ETF’s, closed-end funds, options, forex, and futures. The last two are pretty rare among securities brokers because they’re not technically securities, which means the brokerage firm has to go through more red tape to offer them.

As for accounts, TD Ameritrade offers IRA’s, UTMA/UGMA accounts, trusts, 529 college savings plans, Coverdell accounts, and solo 401(k)’s.

At E*Trade, investors can buy and sell the same financial instruments that TD Ameritrade offers, except forex. A lot of the same accounts are available as well. We didn’t find a 529 plan, but E*Trade offers more IRA types.


Is Investment Advice Available?

If you don’t find much luck making trading decisions in your account, both E*Trade and TD Ameritrade have professionals who can make trading decisions for a reasonable cost.

E*Trade, for instance, has a robo-advisory package that charges just 30 basis points per year, and the first twelve months are free. The broker does require $5,000 to sign up for this service.

Traditional management is more expensive, but more investments can be had. For example, the robot only trades low-cost ETF’s. Human-managed accounts offer stocks, bonds, and mutual funds. It’s also possible to sit down with a human advisor and develop a financial plan. Various packages are available, and the cost ranges from 0.65% up to 1.25%, while minimums can be $25,000 or higher.

TD Ameritrade also offers a software program capable of trading an investment account. Like E*Trade, the broker charges 0.30% for it, although the first year isn’t free. Traditional packages cost between 0.60% and 0.90%, so the maximum cost is a little lower than E*Trade’s limit. The minimum deposit required to start TD Ameritrade’s traditional service is either $25,000 or $250,000. The latter minimum comes with a one-on-one relationship with a senior investment advisor.


Who Has the Better Selection of Mutual Funds and ETF’s?

During our research, we used E*Trade’s mutual fund screener to find 8,445 products open to new investors. Out of these, the broker offers 4,207 with zero load and zero transaction fee. Another useful perk is a list of All-Star Funds. These are chosen by E*Trade investment pros for the funds’ expected higher-than-average returns.

TD Ameritrade customers can invest in 13,000+ mutual funds. While this list is larger than E*Trade’s, TD Ameritrade’s selection of no-load, no-transaction-fee funds is the same as E*Trade’s (4,200+). TD Ameritrade offers a Premier List of mutual funds, courtesy of Morningstar.

TD Ameritrade and E*Trade offer all ETF's commission-free.


Are Cash Management Features Available?

If you want banking features connected to your brokerage account, both companies in this investigation have you covered. E*Trade operates an FDIC-insured bank, and its cash management tools are available through checking and savings accounts. One checking account reimburses ATM charges, but requires a $5,000 balance to evade a $15 fee every month.

TD Ameritrade doesn’t operate a bank, so it doesn’t offer checking or savings accounts. It does offer checks and a Visa debit card (same as E*Trade), which can be added to a securities account. The brokerage firm offers ATM fee rebates with no minimum balance requirement.


Which Broker Has Better Software?

If you trade frequently, you need top-quality software to manage your investment picture. Both firms in this survey offer advanced tools for all sorts of trading needs.

E*Trade is up first. The broker-dealer offers a very user-friendly website with trading capability. Charting offers lots of advanced tools, and a graph can be expanded to display the width of a monitor. Missing on the site is a trade bar.

Power E*Trade is the company’s browser platform, and it offers a lot of useful features. There is an economic calendar, a watch list, Bloomberg video news, and portfolio analysis tools.


Etrade Pro


While charting is pretty good, we were most impressed with the software’s trade ticket, which includes lots of order types and duration choices. Multiple legs can be added to one order, and there are lots of option strategies pre-filled on the ticket. A profit-loss diagram is also integrated into the trade ticket, a really nice feature.

A desktop platform is available to active traders. It offers the broker’s best trading resources, including Level II quotes and time & sales data.


TD Ameritrade Thinkorswim


Moving on to TD Ameritrade, we get an equally impressive website, and perhaps more so. The website has a trade bar, which, as we saw, E*Trade doesn’t provide. The trade bar is able to submit orders for equities and options. Charting is also pretty good with multiple tools.

TD Ameritrade used to have a browser platform but has retired it for technical reasons. This leaves the desktop platform, which outperforms E*Trade’s platform and carries zero trading requirements. Charting is the best we have seen in the self-directed industry, coming with several hundred technical studies. The software’s order ticket offers multiple legs and complex varieties, and this extends to multi-leg option strategies.

As for mobile apps, both brokers offer more than one app. They come with advanced charting, mobile check deposit, and advanced order types. TD Ameritrade’s thinkorswim app outshines E*Trade’s app due to direct-access routing and forex trading.


Etrade vs Ameritrade


While both companies offer platforms for smartwatches, only TD Ameritrade has a skill for Amazon Echo devices.


Fidelity Investments vs Etrade


Promotions

TD Ameritrade: $0 commission stocks/ETFs + get up to $600 cash.

E*Trade: At E*TRADE, get $0 trades + 65₵ per options contract.



Who Has the Better Customer Service?

Both companies in our study offer 24/7 customer service over the phone. TD Ameritrade has an AI chat service. It can answer many questions, but doesn’t quite compete with good old fashioned human chat. Both brokers offer the latter, but it’s a little easier to find on E*Trade’s site. Normally, you have to ask TD Ameritrade’s chat bot a question first, and then the software will display a link to a human chat service if you’re not satisfied with the answer.

E*Trade and TD Ameritrade both offer branch locations, but TD Ameritrade has far more of them (360 v. just 30). As for self-service website functions, both brokerage firms do a good job of providing many resources.


Our Recommendations

Now we arrive at our original goal: a judgment as to which broker is the top choice.

We recommend TD Ameritrade to investors who need the best software. Its desktop platform is better than E*Trade’s, and so is its primary trading mobile app.

Options and futures traders have good tools at either broker.

Because neither broker has an account minimum, small investors can make a decision based on other criteria.

For IRA’s, we suggest TD Ameritrade over its rival. E*Trade has several $25 fees that its competitor doesn’t have.

For account management, we can propose E*Trade over TD Ameritrade for its free year of service.


Etrade vs TD Ameritrade Summary

TD Ameritrade and E*Trade provide a similar trading experience, although TD Ameritrade shines in most categories. With this article, you should now be able to make an informed decision.


Open TD Ameritrade Account


Open TD Ameritrade Account

Open E*Trade Account


Open Etrade Account


Continue Reading