Robinhood versus TD Ameritrade: compare IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better?


Two of the biggest household names in the brokerage industry are Robinhood and TD Ameritrade. While both brokers have their strengths and weaknesses, you may be asking yourself, “Which broker is better?”. We stacked up Robinhood and TD Ameritrade against each other and analyzed some key categories of both brokers to see how they compare in each category.

TD Ameritrade has been in business much longer and is a much bigger company than Robinhood. TD Ameritrade specializes in powerful trading tools and trading platforms built for serious traders along with industry-leading research tools.

Robinhood is a mobile app-focused broker that specializes in making investing as easy and accessible as possible for all levels of investors along with a great user interface and trading experience that are both very beginner friendly.

Comparison Table

TD Ameritrade Rating Robinhood Review
Rating 4.5-star brokerage firm rating 3-star brokerage firm rating
Stocks $0 $0
Mutual Funds $49.99 to buy, $0 to sell n/a
Initial Funding Requirement $0 $0
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
Full Account Transfer $0 $75
Partial Account Transfer $0 $75
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 an account and get up to $200 in free stock.

Types of Accounts

Robinhood offers an extremely limited number of account types that includes just an individual brokerage account and an individual spending account, Robinhood’s version of a bank account. Robinhood doesn’t offer IRAs, trust accounts, business accounts, or even joint accounts, and you can only have one brokerage account and one spending account each.

Robinhood has three different sub-types of brokerage accounts which are Robinhood Cash, Robinhood Instant, and Robinhood Gold. The Robinhood Cash account is a free account that is subject to cash trading rules such as not being able to trade with unsettled funds and having to wait until deposits are cleared to trade with.

Robinhood Instant is also a free account that allows you to instantly trade with up to $1,000 of deposits and trade with unsettled funds, but not borrow any money on margin. A Robinhood Gold account costs $5 per month and includes level 2 quotes, the ability to trade on margin, and a much higher limit for instant trading of deposits.

TD Ameritrade has a huge offering of account types including brokerage accounts, IRAs, trust accounts, business accounts, custodian and education accounts, small business retirement accounts, and non-profit organization accounts. With TD Ameritrade, you can have as many of each type of account as you want and all of TD Ameritrade’s accounts are free to open and use. TD Ameritrade offers both cash trading accounts and margin trading accounts.

Investment Products

Robinhood offers investing in stocks, ETFs, options, and cryptocurrencies. Robinhood offers access to trading in over 5,000 stocks including the ability to trade fractional shares in most U.S. stocks that are over $1 per share. With fractional share trading, Robinhood allows you to buy as little as one-millionth of a share of stock.

Robin Hood versus TD Ameritrade

One of Robinhood’s main advantages over TD Ameritrade is that they offer direct crypto investing in 13 different cryptocurrencies including Bitcoin, Ethereum, and Solana. You can invest in crypto on Robinhood starting with as little as $1.

One of Robinhood’s biggest downsides compared to TD Ameritrade is that the list of available investments on Robinhood is much shorter than the list of investments that aren’t available such as OTC and penny stocks, bonds, CDs, futures, FOREX, and mutual funds.

TD Ameritrade offers investing in all of the securities mentioned above that Robinhood doesn’t plus stocks, ETFs, preferred stocks, and options. As mentioned, TD Ameritrade doesn’t offer direct crypto investing however, they do offer the ability to invest in bitcoin futures. Another area that TD Ameritrade is missing compared to Robinhood is fractional share trading.

TD Ameritrade vs Robinhood

Overall, TD Ameritrade has a massive selection of available investments including thousands of bonds and CDs, over 10,000 stocks, over 6,000 mutual funds, over 3,000 ETFs, over 70 FOREX currency pairs, and over 70 futures products.

Both brokers offer access to IPO investing but Robinhood allows all investors to participate in IPOs without needing to meet any account value qualifications while TD Ameritrade requires you to either have an account value of at least $250,000 or have made at least 30 trades in the last 3 months.

Investment Services

Both Robinhood and TD Ameritrade offer automatic recurring investment programs but for different types of investments. Robinhood allows you to set up recurring investments in stocks, ETFs, and crypto which makes them positively stand out in the brokerage industry as a rare broker that offers recurring investments for any of those three investment types. TD Ameritrade only allows you to set up recurring investments for mutual funds.

Both brokers offer automatic dividend reinvestment for stocks and ETFs and TD Ameritrade allows the feature for mutual funds as well. Both brokers allow you to voluntarily participate in stock lending programs.

Both brokers have cash sweep programs that enable you to receive more than the standard $250k of FDIC Insurance on your uninvested cash. Both brokers offer debit cards, but TD Ameritrade also offers cash management features such as check-writing and Bill Pay as well.

TD Ameritrade offers additional investment services that Robinhood doesn’t such as access to dozens of physical investment branches, access to investment advisors over the phone or in person that can offer one on one personalized financial planning and guidance, and collateral lending programs that allow you to borrow against your portfolio for purposes other than investing.

Pricing & Commissions

Robinhood was effectively the pioneer of $0 commissions in the brokerage industry, and they have stayed true to their missions by still offering $0 commissions to this day. TD Ameritrade eventually adopted its own $0 commission offering as well. Both brokers offer commission-free online trading of U.S. exchange-listed stocks, ETFs, and options.

Some key differences though in each of their $0 commission offerings are that TD Ameritrade charges $6.95 per OTC stock trade and they charge $.65 per options contract whereas Robinhood doesn’t even allow OTC stocks and they don’t charge any options contract fee.

Robinhood’s $0 commissions also extend to crypto trading. TD Ameritrade’s $0 commissions extend to online purchases of treasury bonds at auction, and they only charge $1 for online secondary bond transactions.

Robinhood completely crushes TD Ameritrade when it comes to margin rates. TD Ameritrade charges margin rates starting as high as 11% and decreasing to 9% the more you borrow. The Robinhood Gold account costs just $5 per month and with it your first $1,000 of margin borrowing is free and any amount borrowed over $1,000 has a flat margin rate of only 5%.

Trading Platforms

Robinhood has two trading platforms which are its mobile app and website. They don’t have a downloadable desktop trading platform. TD Ameritrade has many different trading platforms including its mobile app, website, and downloadable desktop trading platform called thinkorswim. You can also use the advanced thinkorswim trading platform on mobile.

TD Ameritrade or Robinhood

Research & Idea Tools

TD Ameritrade has amazing research and idea tools for all the investment types it offers. Some of their best research and idea tools are screeners for stocks, options, bonds, ETFs, and mutual funds, a paper trading feature, and incredible charting features such as over 300 technical indicators offered on charts.

Robinhood doesn’t even come close to matching the quantity or quality of research tools that TD Ameritrade provides. However, Robinhood does have some very easy-to-use research tools including pre-built lists of trending stocks, a newsfeed with top news, and a feature that shows you what other stocks people own along with the stock you are looking at.

Mobile App Comparison

The mobile apps for each broker are both excellent in their own right, but they have completely different styles and appeal to different types of investors. Going along with the specializations of each broker that we mentioned at the beginning of the article in the overview section, Robinhood’s app has an attractive and easy-to-use interface while TD Ameritrade’s app has powerful trading and research features.

Robin Hood vs TD Ameritrade

Robinhood’s app has a “Trending Lists” section that makes it easy to research and browse through categories of investments such as the 100 most popular stocks and ETFs among Robinhood customers, all available cryptos, and daily movers that includes the 20 stocks with the biggest price swings on that day. The trading experience on Robinhood’s app is user-friendly to enter orders and includes helpful tips and explanations along the trading process.

TD Ameritrade’s app has research tools that allow you to dig into lots of key information regarding individual stocks, create very customizable watchlists, analyze stocks utilizing amazingly powerful charting features, and scan across the market for stocks having important events such as dividends or earnings. The trading experience on TD Ameritrade’s app is great for experienced equity and options traders but might be a little bit overwhelming for beginners.

TD Ameritrade or Robinhood

Types of Customers

For beginner investors and small-balance investors, Robinhood has a much better platform and trading experience.

For professional stock traders and options traders, TD Ameritrade is the better choice.

For investors of mutual funds, OTC stocks, futures, and FOREX, TD Ameritrade is the only choice.

For investing directly into cryptocurrency, Robinhood is the only choice.

Long-term investors and swing traders will be happy with TD Ameritrade.

Conclusion of Robinhood vs. TD Ameritrade

Certainly, each broker beats the other in certain categories. Ultimately, it’s not necessarily fair to say that one broker is better than the other overall because it depends on your needs and desires as a trader.

For example, if you want to trade crypto then, Robinhood is your only choice between the two and if you want to trade futures then, you will have to go with TD Ameritrade.

We can say that overall, for beginner traders of stocks, ETFs, and options, Robinhood is the better choice and for advanced traders of those investments, TD Ameritrade is the better choice.

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Updated on 8/11/2022.

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