In the age of the internet, average investors are able use popular online stock brokerages like E*TRADE and TD Ameritrade to control and closely monitor their own investments in a way that never used to be possible. So if you’re trying to decide whether E*TRADE or TD Ameritrade is going to be the best choice for you to park your money, read on.
E*Trade vs. TD Ameritrade: Head-to-Head Comparison
How Much Do They Cost?
The biggest consideration when looking for a place to put your investment nest egg is cost. Fees and commissions can eat up tens or even hundreds of thousands of dollars over the life of your investment. Even a small change in the amount taken out — as little as 1% — can result in drastic changes in your investment returns by the time you reach retirement.
Fortunately, neither E*TRADE nor TD Ameritrade charge annual fees or inactivity fees, which is a good start. Both have outgoing transfer fees well within the industry’s norms: $60 at E*TRADE and $75 at TD Ameritrade. For the most part, neither has a minimum deposit requirement, though E*TRADE requires at least $500 to open an IRA. That’s a pretty low bar to entry, but it’s there.
In terms of commissions, both companies charge the same $9.99 per trade. If you’re a high-volume trader, however, E*TRADE might be a better bet — they drop the fee to $7.99 once you hit 150 trades in a quarter. If you perform an astonishing 1,500 trades per quarter — and we in no way recommend that you do — the commission drops again, to $6.99 per trade.
Meanwhile, mutual fund trades cost a whopping $49.99 apiece over at TD Ameritrade, but they’re only $19.99 at E*TRADE.
If you’re going to be trading in bulk, E*TRADE is the clear favorite on fees. Otherwise, neither has much of an edge here unless you plan on investing in a lot of mutual funds — in which case E*TRADE wins again.
What Can You Invest In?
When it comes to available investments, there is a difference between E*TRADE and TD Ameritrade – though admittedly it may not matter to most average investors.
Both brokers offer more than 100 commission-free exchange-traded funds (ETFs). TD Ameritrade has the edge when it comes to transaction-free mutual funds, with more than 2,000, while E*TRADE offers 1,300. TD Ameritrade also offers a list of recommended mutual funds, which can be a serious benefit for novice investors.
As for more complex investments, both allow for options trading. But when it comes to futures trading, E*TRADE has an edge. They have over 200 futures available to trade, compared to just 60 at TD Ameritrade. However, the latter also offers forex (foreign currency exchange) trades, while E*TRADE has not since 2015.
So if you’re keeping track at home, TD Ameritrade has a wider range of investment options — unless you’re particularly predisposed toward futures trading, in which case E*TRADE has the edge. E*TRADE also requires a minimum investment of $10,000 for futures trading, so keep that in mind.
How Easy Are They To Use?
Each brokerage service is pretty easy to use — they offer both desktop and browser-based investing platforms, as well as mobile apps for investors on the go.
However, TD Ameritrade takes a clear advantage with its Thinkorswim trading platform — this is the same level of service that high-powered investors get. For a comparable drill-down on your stocks and other investments at E*TRADE, you’re going to have to hand over a quarter of a million dollars to invest, and you’ll need to make 30 or more trades per quarter.
You just don’t see the same level of detail in E*TRADE’s standard platform that you do on TD Ameritrade. However, E*TRADE has the better mobile app — so if you’re going to be doing a lot of your trades from your mobile device, E*TRADE might have the edge here.
TD Ameritrade has a clear advantage when it comes to investment options and a powerful trading platform, but it lacks E*TRADE cost efficiency for the more educated and active investor who’s looking to perform a lot of trades.