E-Trade vs. TD Ameritrade

June 3, 2016 Brokers, Investing, Investing Strategy

Investors frequently find themselves stuck between several close options when selecting an online broker, and E-Trade and TD Ameritrade often top their list. The competition between these two brokers is fierce, and they’re both positioned as a good match for beginner investors and advanced traders alike.

Here’s NerdWallet’s head-to-head comparison to help you sort out which broker is best for you: E-Trade or TD Ameritrade.

Etrade 4.5-stars
  • Commission: $9.99; volume discounts available
  • Account minimum: $0 for IRAs; $500 for brokerage
  • Promotion: 60 days of commission-free trades
  • See our E-trade review.
td-ameritrade 5.0-stars
  • Commission: $9.99 per trade
  • Account minimum: $0
  • Promotion: 60 days of commission-free trades
  • See our TD Ameritrade review.

E-Trade vs. TD Ameritrade at a glance

 E-TradeTD Ameritrade
Overall
Stock trading costs
$9.99 for fewer than 150 trades/quarter
$7.99 for 150 to 1,499 trades/quarter
$6.99 for 1,500+ trades/quarter

$9.99
Options trades
$9.99 + $0.75 per contract. Base is tiered with stock commission to discount for active traders.

$9.99 + $0.75 per contract.
Account minimum
$0 for IRA accounts; $500 for brokerage

$0
Account fees (annual, transfer, closing, inactivity)
No annual or inactivity fee; $60 outgoing transfer fee

No annual or inactivity fee; $75 outgoing transfer fee
Trading platform
E-Trade 360 for browser; desktop platform E-Trade Pro for customers who maintain at least a $250,000 account balance or execute at least 30 stock or options trades per quarter

Two robust platform choices accessible to all customers: thinkorswim and Trade Architect.
Mobile app
Advanced features mimic a desktop trading platform

Two apps to mirror the company's desktop and web platforms
Mutual funds
Over 1,300 no-transaction-fee mutual funds

Over 2,000 no-transaction-fee mutual funds
Commission-free ETFs
Over 100 commission-free ETFs

Over 100 commission-free ETFs
Research and data
Free and extensive

Free and extensive
Tradable securities
• Stocks
• Bonds
• Mutual funds
• ETFs
• Options
• Futures

• Stocks
• Bonds
• Mutual funds
• ETFs
• Options
• Futures
• Forex
Customer support/branches
30 local branches in addition to 24/7 email and chat support

126 local branches in addition to 24/7 phone support, live chat and email support
Promotion
Commission-free trades for 60 days, plus up to $2,500 in cash bonuses. Accounts funded with $10,000 or more begin qualifying for tiered promotions.

Commission-free trades for 60 days plus up to $600 in cash bonuses. Accounts funded with $3,000 or more begin qualifying for tiered promotions.

Fees and commissions

You won’t pay inactivity or annual fees at either broker, and outgoing transfer fees are very close at $60 for E-Trade and $75 for TD Ameritrade (fees in that range are standard in the industry). It’s worth noting that there is no minimum requirement to open a TD Ameritrade account, but E-Trade requires an initial deposit of $500 for a brokerage account (waived for IRAs).

As for commissions, many investors will pay the same at both: $9.99 per trade. E-Trade, however, offers a tiered commission schedule that reduces costs for high-volume traders: Investors who trade at least 150 times per quarter qualify for reduced commissions of $7.99; those who trade 1,500 or more times per quarter get an additional discount and pay only $6.99 per trade. If you’re likely to qualify for those discounts, you’ll save money in commissions with E-Trade.

E-Trade’s tiered commission schedule also applies to options trades, which means high-volume options traders will benefit from those reduced per-trade commission charges. The per-contract charge of $0.75 is the same at both brokers.

One other thing worth noting: Mutual fund trade commissions are high at TD Ameritrade: $49.99. They’re more reasonable at E-Trade, which charges just $19.99. Both brokers have a list of no-transaction fee funds (more on this below).

Winner: E-Trade, due to its volume discounts, but traders who don’t qualify for those will incur identical costs at both brokers for stock and options trades.

Investment selection

Again, it’s pretty much a toss-up here, as both E-Trade and TD Ameritrade offer access to a wide range of investments, including futures trading. But if we dial down to specifics:

  • Commission-free ETFs: Both brokers offer upward of 100 commission-free ETFs.
  • No-transaction-fee mutual funds: TD Ameritrade brings a larger number of these funds, with over 2,000 to E-Trade’s 1,300. (As noted above, trade costs on funds outside of that fund list are higher at TD Ameritrade.) TD Ameritrade also offers a mutual fund Premier List, compiled by Morningstar and updated quarterly, with independent recommendations in over 45 different fund categories.
  • Futures: E-Trade allows trading of over 200 futures products, while TD Ameritrade has just over 60.
  • Forex: TD Ameritrade offers forex trading, but E-Trade discontinued its forex trading platform in September 2015.

Winner: TD Ameritrade wins here, simply for its wider range of no-transaction-fee mutual funds and the availability of forex. But it’s a very close call, and futures traders might prefer E-Trade. It’s worth noting that E-Trade requires an account minimum of $10,000 to trade futures.

Research, tools and trading platforms

Both TD Ameritrade and E-Trade offer browser-based trading platforms and more robust desktop platforms.

TD Ameritrade is known for its innovative, powerful trading platforms. Trade Architect, a web platform geared toward beginner traders, still has plenty of advanced features, including a market/options heat map, screening tools, streaming news and Trade Finder, which simplifies options trading for novice traders. The tool surfaces options trade ideas and helps investors build a trade strategy and analyze risk.

It’s basically akin to the advanced platforms offered by other brokers. But then TD Ameritrade takes it even further, with thinkorswim. Revamped last year, thinkorswim is professional-level: It includes comprehensive charting with hundreds of technical indicators, a Market Monitor tool that graphically displays the entire market via heat maps and graphs, Stock Hacker — which tracks down stocks headed up or down and displays information about their volatility and risk — and streaming CNBC. The platform is also packed with educational offerings, including onboarding tools (called “swim lessons”) for novice traders.

TD Ameritrade also offers mobile trading via two mobile apps, including Mobile Trader for advanced traders, with live-streaming news, full options order capabilities, in-app chat support and customization.

E-Trade was docked a star in our review because its advanced platform, E-Trade PRO, is available only to customers with at least a $250,000 balance or who execute at least 30 stock or options trades per quarter. That said, it’s an attractive option for those who qualify, with robust idea-generating tools like Strategy Scanner, backtesting, a professional-level options screener and customizable charting.

E-Trade is innovative in other areas as well. Its mobile app may be the best available from any online broker, with advanced features like stock and ETF screeners, options chain filters, educational videos, and real-time quotes, charts and CNBC Video on Demand. E-Trade also offers a Google Chrome plugin, so investors can research and trade right from their browser.

E-Trade’s standard web platform, E-Trade 360, is designed for investors who want to take care of the basics: tracking their accounts, managing watch lists, viewing streaming data and, of course, making trades.

Both brokers offer free access to research and data, including independent research from S&P Capital IQ, Thomson Reuters, Market Edge and Morningstar. TD Ameritrade customers have access to analysis from a slightly larger number of third-party providers, as well as access to the company’s MyTrade social community and Social Signals, which pulls trading insight from Twitter. TD Ameritrade also offers paper trading so users can test strategies risk-free; E-Trade doesn’t offer virtual trading capabilities.

Winner: TD Ameritrade has to take this portion. Platforms as advanced as thinkorswim are rarely offered to all customers free of charge with no account or activity minimums, and the company’s research offerings are top-notch and innovative. Those who do a great deal of their trading on the go may prefer E-Trade, as its mobile app experience is slightly better.

Which one is right for you?

TD Ameritrade nearly sweeps this competition, which just goes to show how strong this broker is — E-Trade is a formidable competitor, rated 4.5 stars in our mostly glowing review.

While most investors would be happy at either, TD Ameritrade’s powerful trading platforms, breadth of research and wide investment selection is just tough to beat — the company shared NerdWallet’s pick for the overall best online broker for stock trading for a reason, and it easily appeals to both beginners and the most advanced traders.

What isn’t hard to beat is TD Ameritrade’s commissions. Investors who choose TD Ameritrade do so knowing they’ll pay more for every trade when compared with most discount brokers. E-Trade’s commissions are similarly high, though the company’s volume discounts may make it more favorable to frequent traders. NerdWallet’s online brokerage search tool can help you estimate your potential costs based on your trading frequency and investment preferences.

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

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