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

Vanguard vs. TD Ameritrade Introduction

Which brokerage house can provide the financial services you need, TD Ameritrade or Vanguard? The former has futures trading, while the latter has robo accounts. 

Here’s an in-depth study:

Comparison Table

TD Ameritrade Rating Vanguard Brokerage Review
Rating 4.5-star brokerage firm rating Vanguard brokerage company rating
Stocks $0 $0
Mutual Funds $49.99 to buy, $0 to sell $20.00
Initial Funding Requirement $0 $2,500
Inactivity Fee $0 $0
IRA Annual Fee $0 $20
Full Account Transfer $0 $0
Partial Account Transfer $0 $0
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.

As you see from the table above, Vanguard and TD Ameritrade are equally priced.

Upsides and Downsides of Vanguard

Vanguard does really well in these brokerage services:

- Investment advice
- Vanguard funds
- Discounts for large accounts

The securities firm has these weaknesses:

- OTC stock service has been discontinued
- Software is rudimentary
- Some retirement accounts have excessive fees

Upsides and Downsides of TD Ameritrade

Investors often choose TD Ameritrade for these reasons:

- Excellent software
- Good customer service
- OTC stock trading

The company underperforms here:

- Investment-advisory services have been discontinued
- No longer offers foreign accounts
- Margin rates are pricey

Category 1: Investment Offerings

Vanguard offers self-directed accounts with no fees (with electronic delivery of statements) and no minimum balance requirements. Investors who would rather let a professional make trading decisions for them can sign up for one of several managed packages.

Vanguard’s automated service costs just 0.20% per year but has a $3,000 minimum deposit requirement. This service trades only Vanguard funds. A more comprehensive service is available through the company’s traditional, human package. It begins at 0.30% with a $50,000 balance requirement.

Self-directed accounts at Vanguard can trade the largest list of assets. It includes:

  • Fixed-income securities
  • Stocks (but not OTC stocks)
  • Mutual funds
  • Exchange traded funds
  • Closed end funds

TD Ameritrade no longer offers portfolio management. But it does offer self-directed accounts with the same tradable instruments that Vanguard offers. Plus, TD Ameritrade adds OTC stocks, forex, and futures contracts.

Winner: Open to debate

Category 2: Customer Service

A Vanguard associate can be reached over the phone during the weekday until 8:00 pm, EST. There are no weekend hours. The broker’s website has no chat widget and no internal messaging. There is a self-help hub available through the Support link, which is located at the very top of the site.

Although Vanguard is somewhat of an old-school brokerage firm, it has no branch locations, so phone service and its very deficient website are the only two avenues.

TD Ameritrade is in an entirely different universe here. Right off the bat, it has agents on the phone 24/7. Clients who prefer the website have two chat options, human and robo, plus internal messaging software that can both send and receive messages. The tool also has an attachment feature, which is a great way to submit documents instead of mailing them in.

On top of these great services, the TD Ameritrade website has a good self-help section on its website (it’s underneath the Client Services tab). Last, but certainly not least, is a very extensive network of brick-and-mortar locations located in most U.S. states.

Winner: TD Ameritrade

Category 3: Margin

Vanguard and TD Ameritrade both offer margin and cash accounts. Retirement accounts can be margin enabled at both brokerage firms. A cash account can easily be upgraded to margin status at either firm.

On the Vanguard site, the link to do this will be found under the Profile & accounts settings menu. The link for this hub will be found in the upper-right corner of the website.

At TD Ameritrade, the link to downgrade or upgrade an account will once again be found under the Client Services tab.

As for margin rates, TD Ameritrade is a little pricier. Here are the top and bottom tiers:


Debit Balance Margin Interest Rates
under $19,999 10.00%
$20,000 – $49,999 9.50%
$50,000 – $99,999 9.00%
$100,000–$249,999 8.50%
$250,000–$499,999 8.25%
$500,000–$999,999 6.75%
above $1,000,000 6.25%

TD Ameritrade:

Debit Balance Margin Interest Rates
above $499,999 call 800-655-4777
$250,000 - $499,999 9.00%
$100,000 - $249,999 9.00%
$50,000 - $99,999 9.25%
$25,000 - $49,999 10.25%
$10,000 - $24,999 10.50%
under $10,000 11%

Both brokerage firms provide margin education on their websites.

Winner: Vanguard

Category 4: Website Trading

Vanguard customers get a simple yet effective website for account management and trading. During our test drive of the software, we found it difficult to navigate at times. This situation is improved with a search field located in the upper-right corner of the site.

Vanguard or TD Ameritrade

Actual trading is accomplished with a simple order ticket. There are just four order types (stop, stop limit, market, and limit) and two time-in-force choices (day and GTC). There are also discrete buttons for buy to cover and sell short. Each trade will be categorized as a cash or margin trade, depending on the account’s status at the time of the trade. It is not possible to toggle between these two choices.

Charts on Vanguard’s site are pretty basic. There are just a handful of technical studies and no drawing tools at all. There are four plot styles (mountain, line, OHLC bars, and candlesticks). There are company events and comparisons.

Although a graph on Vanguard’s site cannot be displayed the width of the monitor, TD Ameritrade’s website does have this capability. TD Ameritrade also provides one more plot style (dot) and many more technical studies. A graph can be detached to form its own window, a nice feature that’s not available on the Vanguard site.

TD Ameritrade or Vanguard

Order entry is also on a higher level on the TD site. For example, there are complex order types that Vanguard doesn’t offer. Examples include OCA bracket order and OTC (one triggers another).

Thanks to a well-designed top menu, TD Ameritrade’s site is easier to navigate than Vanguard’s.

Winner: TD Ameritrade

Category 5: Desktop Programs

TD Ameritrade has not stopped with its website. It goes much further with its desktop platform. Named thinkorswim, this piece of software delivers a trading experience that will satisfy even the demands of professional traders. During our investigation, we especially liked thinkorswim’s charting program. Boasting all sorts of tools, including a right-click menu and hundreds of technical studies, it is easy to watch the price action of a security and make a trade on the fly.

TD Ameritrade vs Vanguard

thinkorswim’s trade ticket is also on a very high level. There are many trade types, including some exotics like Blast All that won’t be found on the website. A trade ticket can be saved for later use so you don’t have to re-enter data. During our testing of the widget, we found the best way to bring up the ticket is to click on a bid or ask price at the top of the platform or select buy or sell from the right-click menu on a chart.

Vanguard has no desktop software at all.

Winner: TD Ameritrade

Category 6: Mobile Apps

Although Vanguard failed to deliver a desktop trading system, it does have a mobile app. However, it is very simple, and we were quite disappointed in it during our testing. For instance, the software has no mobile check deposit, and non-Vanguard mutual funds cannot be traded on it.

Vanguard or TD Ameritrade

Quite surprisingly, Vanguard’s mobile app has no charts at all, which really limits its security analysis capability. Even worse, only Vanguard funds can be researched. When we tried to place a stock order, the app returned an error messaging stating that Vanguard was working to build an order ticket for the app.

Our experience with the Ameritrade app was totally different. It has mobile check deposit, an order ticket that actually works, charts, and research tools. These widgets deliver a lot of great features.

TD Ameritrade vs Vanguard

And these are just features on the regular app. The brokerage firm also has a thinkorswim app. As the name suggests, it is modeled after its desktop cousin and has a lot of powerful trading features. For example, charts have tons of indicators, and there’s a really advanced order ticket. It can place trades for futures and forex, a great benefit.

The one downside is that mutual funds can’t be traded anymore on the broker’s apps.

Winner: TD Ameritrade

Category 7: Education

Investors who need a little education on trading topics will find resources from both brokerage firms. On the Vanguard site, these materials will be found underneath the Investors Resources & Education tab. There are many topics covered. Here are some categories:

  • How to invest
  • Choosing investments
  • Online trading
  • Managing your portfolio
  • Retirement
  • Education savings
  • Emergency fund
  • Short-term goals
  • News & perspectives
  • Taxes
  • Tools & calculators

Although these resources tend to be in article format, Vanguard has a very extensive video library on its YouTube channel. There are a few hundred videos. Not to be outdone by its rival here, TD Ameritrade has an even larger collection of videos on its YouTube channel.

Vanguard or TD

The Ameritrade website hosts learning materials under the Education and Planning & Retirement tabs. Formats include articles, playlists, videos, and webcasts.

TD Ameritrade hosts in-person workshops, branch seminars, and online courses. During the Covid pandemic, the in-person events may not be available. The company publishes a periodic newsletter, The Ticker Tape®, and even runs a TV channel with investment-related content, TD Ameritrade Network.

Winner: TD Ameritrade

Category 8: Other Services

Initial Public Offerings: TD Ameritrade clients, but not Vanguard customers, can get in early on upcoming equity offerings.

Extended Hours: Vanguard offers post-market trading until 5:30 pm, EST. TD Ameritrade’s evening session runs until 8:00 pm. Plus, it has a pre-market period. It even offers overnight trading in a handful of ETFs.

Fractional Shares: Neither brokerage firm in this survey offers partial-share trading in stocks or ETFs. Of course, it’s always available for mutual funds.

Individual Retirement Accounts: Both Vanguard and TD Ameritrade offer several IRA types. Vanguard’s small business accounts (SIMPLE and SEP) have fees that TD Ameritrade doesn’t charge.

DRIP Service: Both firms offer dividend reinvesting at zero cost.

Periodic Mutual Fund Investing: TD Ameritrade customers can sign up for systematic purchases of mutual fund shares. Vanguard has the same service but restricts it to Vanguard funds.

Cash Management Features: Vanguard has eliminated VanguardAdvantage, its old banking service. TD Ameritrade still has checkwriting and a Visa debit card.

Winner: TD Ameritrade

Our Recommendations

Long-Term Investors and Retirement Savers: TD Ameritrade has lower fees on its small business IRAs, but only Vanguard has traditional portfolio management, including financial-planning services. For its personalized advisory service, we would go with Vanguard.

Mutual Fund Trading: Vanguard has 6,846 funds open to new investments. At TD Ameritrade, we found 5,874 funds. Obviously, TD Ameritrade has fewer funds. But it has a better fund screener and better fund profiles (including Morningstar ratings, which Vanguard leaves out). Vanguard funds are available at TD Ameritrade, but only with a transaction fee. Pretty close overall.

Small Accounts: Despite the industry’s move towards no fees and $0 equity commissions, Vanguard still has several policies in place that benefit large accounts. TD Ameritrade does not.

ETF & Stock Trading: With better stock research tools and much better software, TD Ameritrade is an easy choice.

Beginners: A digitally-managed account at Vanguard is a good place to begin.

Vanguard vs TD Ameritrade Summary

Although Vanguard has lower margin rates, it doesn’t offer the software necessary to make margin trading worthwhile. TD Ameritrade is the clear winner of this contest except for investment management.

Open TD Ameritrade Account

Open TD Ameritrade Account

Open Vanguard Account

Open Vanguard Account

Updated on 5/19/2022.

Continue Reading