Etrade vs. TD Ameritrade vs. Schwab: Reviewing the Biggest Online Brokers

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The three largest online brokers – Schwab, TD Ameritrade, and E*TRADE – collectively have over 17 million active brokerage accounts.  While Schwab wins in terms of sheer size, which is the best online broker of the three?  Though all of these major online brokerages receive NerdWallet’s 5-star rating for different reasons, and you can trade a variety of asset classes at each, these brokers differ in terms of their top premium features and who they’ll serve best.

If you’re trying to decide which of the three largest online brokerages is best for you, NerdWallet breaks down your big brand name options and their specialities:

E*TRADE

E*TRADE is home to just over 2.9 million total brokerage accounts as of December 2012, as well as $201.2 billion in customer assets.

Known most widely for its talking baby commercials, E*TRADE should perhaps be known best for something else instead: all around low minimums and fees, coupled with all-included premium features like free research, real time data, and 24/7 service.  E*TRADE offers access to all asset classes you might want to trade, including not just stocks and funds but also options, futures, and forex.  E*TRADE is also offering 60 free days of trading upfront – up to 500 free trade commissions for stock and options if you deposit at least $10,000 upfront – an excellent savings to take advantage of if you want to initially fund the account fully but don’t plan to trade very frequently in years to come.

You should sign up for an E*TRADE account if: you’re an active trader or if you’re looking to ramp up your trading, because E*TRADE’s advanced platform is free if you make at least 10 trades per month and also offers a security token for maximum account security.

Account Details:

  • Commission: $9.99 per trade
  • Account Minimum: $500
  • Account Fees: No annual account fee
  • Promotion: Make initial $10,000 deposit to receive 60 days of free trades & up to $500
  • Sign up here.

The downside?  Although E*TRADE does offer free research reports, its basic account offers no free trading software: this comes at the hefty monthly fee for $99.95 extra to upgrade.

TD Ameritrade

TD Ameritrade has 5.8 million funded accounts and approximately $472.3 billion in client assets.

For the more casual investor, TD Ameritrade offers a full suite of investing options, including over 100 commission-free ETFs to help affordably diversify a portfolio of funds.  TD Ameritrade is consistently rated highly across the board for customer service and support.  TD Ameritrade also acquired thinkorswim back in 2009, a powerful stock and options trading platform that has provided TD many top volatility-trading features.

You should sign up for a TD Ameritrade account if: you’re looking for strong, secure trading technology combined with all the basics in one place: a powerful yet easy to use investing platform and user interface.

Account Details:

  • Commission: $9.99 per trade
  • Account Minimum: $500
  • No annual account fee
  • Promotion: Make an initial $2000 deposit and trade free for 60 days + get up to $600
  • Read the full NerdWallet review here for all the details
  • Sign up here.  (Sign up for thinkorswim here.)

The downside?  Casual investors not in search of the most powerful trading platforms and research tools can find better deals elsewhere.

Charles Schwab

Schwab currently comes in first with the status of the largest online broker, boasting 8.8 million active brokerage accounts and totaling just over $1.95 trillion in client assets.

How well does this status translate into quality offerings?  Schwab is a common household name for a reason; it provides a comprehensive suite of investment products and services for customers looking to diversify and host a variety of accounts.  It also offers customers the convenience of visiting physical locations across the country, as well as merging investing with some of the other advantages of traditional banking, such as the no-ATM-fee Schwab debit card.

You should sign up for a Schwab account if: you’re looking for the best of both worlds to integrate your banking with your investing all at the same institution offering both online and in-person services.

Account details:

  • Commission: $8.95 per trade
  • Account Minimum: $1,000
  • No annual account fee
  • Sign up here.
The downside?  Schwab is not currently offering any introductory perks or promotions to take advantage of, unlike its competitors outlined below.  Schwab does not offer the most sophisticated trading platform in the business.

Caveat to Investors: Pay For Only What You Need

Last, a word of caution: just because these are the largest online brokers does not automatically make them the best for your investing needs, so be sure to shop around for the best trading prices available.

If you merely want to buy and trade stocks or another investment vehicle, and will not be using any of the additional premium features described above, you could likely be trading for less money with a discount brokerage.  In fact, a recent NerdWallet study found that investors with the three largest brokerages are overpaying to the tune of $1.8 billion on unnecessary fees for things they don’t really need.

Not sure yet where you fit into this mix?  By plugging your trading preferences into NerdWallet’s search-and-compare tool, you can find the list of the best brokers for your specific needs.

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