E*Trade vs. TD Ameritrade

Everyone knows E*Trade from the baby investor commercials. The tagline for the brokerage is “the easiest to use platform,” but is that truly the case? In comparison to TD Ameritrade, E*Trade offers a large knowledgebase of educational resources and a simple robo-advisor tool that does not require a high investment cost like TD Ameritrade.

However, there are more mobile and convenience options with trading on TD Ameritrade. The large brokerage offers several different mobile apps, and you can access trading through Facebook Messenger, Twitter, and Google Assistant. The company has grown and streamlined much of its services online to become just as easy-to-use as E*Trade in the past year as well.

When it comes to these stock brokers, we looked at granular costs, research tools, robo-advisor options, and retirement planning tools to see who really provides the better package for investors who want it all.

So which brokerage is right for you?

Most commission fees for online brokerages dropped in October 2019. Both E*Trade and TD Ameritrade advertise free commissions and zero account minimums.

Both of these brokerages offer extensive education tools, mobile trading platforms, and a large mutual fund selection, but which is the easiest to use and better for beginners? Here are some highlights from our comparison and review:

E*Trade vs TD Ameritrade Fees and Commissions 💰

By switching to $0 commision, both of these popular online brokers appeal to active and casual traders. However, which brokerage truly costs less to trade with?

E*Trade offers $0 commission fees on all stock, ETF, and option trades with a fee of $0.65 per contract. There are further discounts for those who trade in high volumes.

If you make 30 or more trades within a quarter, you pay only $0.50 per contract. Traders also pay $1.50 per futures contract and $1 per bond.

Broker assisted trades on E*Trade cost $25. OTC or penny stocks also have an additional cost of $6.95 per trade or $4.95 per trade if you trade at least 30 or more per quarter. This applies to OTC, OTCBB, grey market, and OTC-traded foreign securities.

For mutual funds, E*Trade offers thousands of no-transaction-fee funds at $0. However, all transaction fee funds cost $19.99. Load funds are priced separately, and there is a redemption fee for no-load, no-transaction fee, and other mutual funds of $49.99.

When it comes to TD Ameritrade fees, the pricing is nearly the same, except they offer some additional options for robo-assisted trades. Traders pay $0 in commissions for all stocks, ETFs, and options trades — which is why it made our list of the top discount brokers for low-cost trading. Traders pay $0.65 per options contract.

Futures and options on futures cost $2.25 per contract plus exchange and regulatory fees, which is lower than E*Trade. Mutual funds have no commissions on NTF, but you’ll pay $49.99 on no-load funds, which is significantly higher than E*Trade.

Broker-assisted trades also cost $25 on TD Ameritrade, but you’ll pay $5 for robo-assisted or the interactive voice response (IVR) phone system.

Investment Selection 📃

Both of these brokerages have a vast investment selection. The only difference may be in the number of mutual funds offered.

E*Trade offers the following investment selections:

•  ☑️ Stocks
•  ☑️ Bonds
•  ☑️ Mutual funds
•  ☑️ ETFs
•  ☑️ Options
•  ☑️ Futures

E*Trade offers numerous investment selections that will make most active traders happy, and retirement investors will love the amount of NTF mutual funds. E*Trade offers 4,400 mutual funds with no commission fees. In addition, you can read a list of recommended mutual lists called the “All-Star Funds Report” that includes ETFs and the best no-load-funds available.

However, you won’t find any forex, IPO, cryptocurrency, or foreign ADR trading. How does TD Ameritrade stack up to this?

There are a bit more investment selections available with the large brokerage. TD Ameritrade offers the following investment choices (which are further explored in our in-depth TD Ameritrade review):

•  ☑️ Stocks
•  ☑️ Bonds
•  ☑️ Mutual funds
•  ☑️ ETFs
•  ☑️ Options
•  ☑️ Futures
•  ☑️ Forex
•  ☑️ Foreign ADRs
•  ☑️ IPOs (for approved, qualified accounts)

TD Ameritrade excels in this category, offering 4,100 NTF mutual funds and a total of over 11,000 low-cost mutual funds. For beginner investors and retirement planners, you’ll get the most out of investments with this platform. However, the fees are a bit higher than with E*Trade.

Trading Experience and Security 🤝

Both TD Ameritrade and E*Trade have been around long enough to have built incredibly complex trading platforms, but they also have different approaches to trading technology and day trading practices.

Trading with E*Trade 💵

With E*Trade, you can log in to the website to begin trading, or you can run Power E*Trade. If you want a more advanced platform for active trading, there is also the desktop platform E*Trade Pro. While the platform is sufficient for beginner investors and quick trades, Power E*Trade offers more for options traders and complex trading.

With E*Trade’s website, you can stream market data, access live market commentary, look at research stock screeners, and get free real-time quotes. There is also a customizable dashboard where you can set up watch lists, view market data, and look at complex options strategies.

Power E*Trade is based on technology in OptionsHouse, which E*Trade acquired in 2016. You can conduct research with over 100 technical studies, 30 different drawing tools, customizable option chain views, trading ladders, and seamless trade tickets.

With E*Trade Pro, traders can access the strategy scanner to get new ideas, and there are also back-testing capabilities. However, all three of E*Trade’s platforms offer streaming real-time data and easy order placement right from charts, allowing you to track it visually.

As far as trade executions and technology, E*Trade works with several market centers and offers end-to-end control over all orders, which provides traders with the highest speed and high-quality executions.

E*Trade states that price improvement is incredibly important to their company, which is why the broker regularly reviews the market centers to see the best execution prices and speeds. Despite this promise to traders, reports show that E*Trade is actually slightly below the industry average for price improvement.

Does TD Ameritrade offer a better trade experience and trade execution quality?

Trading with TD Ameritrade 💸

Like E*Trade, TD Ameritrade users can log into the website to begin trading. However, the real power of this brokerage is their “thinkorswim” platform. We rank it as the best overall stock trading app available.

This downloadable trading platform is completely customizable with different layouts, trading defaults, and color schemes. There are also multiple ways to customize your dashboard on the website as well. For example, you can use the Dock tool to set up different streaming quotes, charts, and news sources.

There are 13 different modules so far, including account balances, video, Twitter feeds, streaming news, streaming watchlists, and charts, which can all be re-sized and arranged any way you like. The experience is the same whether you use the computer or mobile device to log into the platform.

Whether you use the website or thinkorswim platform, trades are all active in real-time, so you can enter an order on mobile, desktop, or on the web. Investors can access everything they need to identify stocks, research new ones, screen, and trade stocks in real-time. Best of all, both platforms are free and require no account minimums or deposits to use.

Serious stock, options, ETF, futures, and forex traders can use thinkorswim to access advanced trading tools, such as technical analysis tools, studies, customizable screeners, charting, backtesting capabilities, quotes, market heat maps, and real-time news streams.

As far as trade execution and technology, TD Ameritrade offers a guarantee that they use advanced routing technology and evaluate all trades for price improvements. On their website, TD Ameritrade also shows that they were able to get price improvements 98.2 percent of the time. Their speed is also guaranteed to be completed within 0.06 seconds.

TD Ameritrade has been verified as one of the best brokerages for order execution. It currently stands at the number three spot in our review of the best platforms for day trading.

There are some issues with the vast amount of tools and customizations available for TD Ameritrade. However, recently the brokerage has begun new development to unify how the platform looks and operates, and now all of the platforms are responsive to browsers and mobile devices. Most new traders will need to watch videos and learn more about trading before using the thinkorswim platform.

Security 🛡

Both of these brokers are highly regulated by top-tier financial regulators. They share the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Furthermore, TD Ameritrade is overseen by the Commodity Futures Trading Commission (CFTC), the Hong Kong Securities and Futures Commission (SFC), and the Monetary Authority of Singapore (MAS).

Both TD Ameritrade and Robinhood are protected by the SIPC program, which protects against the loss of cash and assets if the broker fails. SIPC protection is limited to $500,000, with a cash limit of $250,000 included.

Online Advisors and Educational Offerings 👨‍🏫

TD Ameritrade is one of the oldest stockbrokers, founded in 1975. Their platform has evolved to include educational resources and historic information from the very beginning.

E*Trade was started in 1982 as TradePlus, but their platform evolved by helping beginners, which meant providing more than just tips for their customers. E*Trade was also one of the first brokerages to offer an online platform with educational courses.

Education with E*Trade 📘

E*trade is one of the best options if you are new to trading. The brokerage offers an abundance of free resources including courses and online webinars.

You can find more information on technical analysis, portfolio diversification, options trading strategies, and other investment research. The brokerage also holds on-location events to teach seminars on different trading products, strategies, and new trends.

However, it’s the investment courses that really set E*Trade a part from other brokerages. You can sign up for investment courses from Morningstar, which covers everything from very beginner training on stocks and options to complex strategies on emergency funds and futures.

If you like thematic investing for clean energy, tech stocks, female-led companies, and other ventures, E*Trade also provides advice on what companies would be best for your interests.

Does E*Trade Have a Robo Advisor? 🤖

Robo advisors are becoming increasingly popular. E*Trade Core Portfolios is their robo-advisor service that manages your entire portfolio for an annual cost of 0.3% of the entire portfolio. However, the minimum investment is $500.

This is standard across the industry. You can answer a few questions about what you want to invest in and how you like to invest to set up a basis for your investment selection, and the AI will do the rest, managing your portfolio with automatic balancing.

Education with TD Ameritrade 📗

You can find an answer, article, webinar, or question and answer about any topic on TD Ameritrade. The site has been around for over 30 years, so the information is vast. There are videos, quizzes, slideshows, and live online seminars to get more information about stocks, strategies, options, emergency funds, retirement planning, and more.

TD Ameritrade also offers in-person seminars at their branch locations. You can also attend online courses by selecting your investment education level, whether you’re a rookie, scholar, or guru.

Finally, if you have any trouble finding something, TD Ameritrade recently introduced an AI chatbot called “Ted.” You can ask Ted just about anything, and he will point you in direction of any education or tool tip available. He can also help you with some strategies and trading tools. You can also ask questions about specific stocks and options to get key data and real-time information.

The virtual trading simulator on TD Ameritrade offers more insights into strategies, where you can test out theories, stock trades, retirement funds, and whatever else you want with “paperMoney.” The simulator gives you $100,000 in fake money to play with as well as access to a fake margin account.

You can access the virtual simulator on mobile or on desktop for free, even if you don’t have a customer account. Non-customers can sign up for a 60-day trial to test out all features and see what it’d be like to invest with TD Ameritrade.

There’s also a ton of research tools available including third-party tools from Morningstar, Thomson Reuters, and Gainskeeper. In addition, retirement investors can use the Portfolio Planner tool to build a custom portfolio or choose from a prebuilt portfolio option based on themes.

Does TD Ameritrade Have a Robo-Advisor? 🤔

If you want to have an AI-managed portfolio, you can opt for the TD Ameritrade Essential Portfolios tool, but it requires a $5,000 minimum investment. In addition, the broker charges a 0.3% management fee each year.

The good thing about this robo-advisor is that it offers low investment expense ratios, niche account types, and Morningstar-built portfolios. It’s best for hands-off investors or socially conscious investors. However, the high account minimum is a drawback.

Mobile and New Trade Tech 📱

E*Trade offers two mobile trading apps including E*Trade Mobile and Power E*Trade. They are both free and available on Android and iOS. You can easily manage your account with the basic E*Trade Mobile app. Learn more about them in our comprehensive E*Trade review.

It provides real-time quotes, news, and most trade types. You can quickly place trades that are complex, such as multi-leg options. The app also works on Apple watches.

The Power E*Trade app allows traders to access more trades for options, such as customized options chains. You can also check out technical studies and charts with streaming quotes and personalized news feeds. If you want four-legged option spreads, futures ladder, and other complex trades, this would be the best app to use.

TD Ameritrade also offers two mobile apps, including TD Ameritrade Mobile and the TD Ameritrade Mobile Trader app. You can also access the trading platform through mobile web browsers. While most of the trading functionality from the website is on TD Ameritrade Mobile, you can also access more trading products like forex and futures on TD Ameritrade Mobile Trader.

One of the newer options with TD Ameritrade is the option to place trades through Twitter direct messages, Facebook Messenger, and Apple Business Chat. You can also use Google Assistant to place trades on-the-go or use in-vehicle smartphone assistants to catch up on the latest stock trends.

There is also the TD Ameritrade Portfolios app, which allows you to access your robo-advisor or managed portfolio on mobile as well.

Customer Support Compared ⚖

E*Trade Customer Support ☎

You can access all of the customer support options on Etrade.com, including 24/7 live chat. All phone support numbers are also available on the website.

Customer representatives answer within minutes, although we had to wait 2 minutes for phone support to respond. However, our question “what are the limits on day trading” was answered quickly and extensively with links to more information.

E*Trade’s chat support is not run by bots either. You’ll talk to an actual expert and customer representative. If you want to speak to a human advisor, you can use chat or phone at any hour of the day just by visiting their financial consultants page.

TD Ameritrade Customer Support 📞

Just like with E*Trade, you can find links to all of their customer support options on the website. However, it’s a little bit less refined as E*Trade’s chat support. You can click on the tabs to access 24/7 live chat, phone support, and email.

Unfortunately, we were not able to get a response to our message on Facebook or Twitter as fast as the chat on E*Trade. However, we were able to reach phone support immediately and get an answer, even at 4:00 AM (ET).

Verdict: Which Broker is Right for You? 🏁

These two brokerages are evenly matched in many categories. E*Trade is the beginner’s favorite platform. It’s well-organized and designed to be simple, and the mobile apps are easy-to-use and fast. But is E*Trade better than TD Ameritrade? The real issue with E*Trade is their slightly off trade execution quality.

TD Ameritrade has made a name for itself by being the large brokerage that offers all the bells and whistles for most investor types. You can find educational resources, more investment selections, and a decent robo-advisor even though the minimum deposit is much higher at $5,000 for TD Essential Portfolios.