E*TRADE vs. TD Ameritrade



E*TRADE vs. TD Ameritrade Range of Offerings
Asset TD Ameritrade E*TRADE
Short Sales  Y Y
No-Load, No-Fee Mutual Funds  4,259 4,533
Bonds  Y
Corporates 9,256
Municipals 40,770 
Treasury Bonds 500
CDs 3,525
International  Not offered
Y
Corporates 15,226
Municipals 56,127 Treasury Bonds 613
CDs 4,482
International 3,158
Futures/Commodities  Y Y
Futures Options  Y Y
Complex Options  Y (5 legs maximum) Y (4+ legs)
Robo Advisory Y Y
Cryptocurrency  CME Bitcoin futures only CME Bitcoin futures only
International Exchanges Canada;
More international exchanges can be traded using broker assistance.
N
Forex  Y, 73 pairs N
Fractional Shares  N N (only available for dividend reinvestment program)
OTCBB and Penny Stocks Y, but with a $6.95 flat fee Y, but with a $6.95 or $4.95 fee based on how active the account is

Order Types

Both TD Ameritrade and E*TRADE support all primary market order types, including limit orders, stops, and trailing stops on all platforms, and tax lots can be selected when closing positions. The two also support the ability to stage orders and to simultaneously enter multiple orders. Both brokers also support conditional orders, such as one-triggers-other (OTO), one-cancels-other (OCO), and one-triggers-a one-cancels-other (OTOCO) orders. Traders should note contingent orders are only available on TD Ameritrade’s thinkorswim platforms and E*TRADE’s mobile app does not support all of the conditional orders available on the desktop platform. Both brokers offer excellent flexibility on order types across platforms, but TD Ameritrade gets a slight edge for having more conditional order types available on its mobile app.

Trading Technology

E*TRADE and TD Ameritrade both have good trading technology, including portfolio margining, stock lending, trading scanners, and the ability for traders to route their own orders if they prefer to not use the brokers’ proprietary order routing algorithms. It is surprising that neither company offers fractional shares in any standard accounts; fractional shares are only available for robo-portfolios and dividend reinvestment programs (DRIP). 

As mentioned, TD Ameritrade offers the ability to backtest trading strategies on thinkorswim and thinkorswim mobile, while E*TRADE does not offer backtesting. TD Ameritrade also allows automated trading based on a set of specific conditions, a feature unavailable at E*TRADE. TD Ameritrade’s thinkorswim has trading analytics and options analysis tools that are better than E*TRADE’s offering and, while both platforms allow trade journaling, only TD Ameritrade allows pictures and graphs to be added.

E*TRADE’s order routing technology results in average fill times for orders of approximately 0.35 seconds, and price improvement of $0.0007 per stock or ETF share and $3.38 per option contract. TD Ameritrade’s routing for 90% of their orders results in fills in just 0.05 seconds and price improvement of $0.0175 on stocks and ETFs, but did not disclose price improvement data for options. Both brokerage firms receive payment for order flow (PFOF), with TD Ameritrade receiving $0.0012 per share for equities and ETFs and $0.55 per options contract, while E*TRADE receives less than $0.002 and less than $47 cents, respectively, for the same categories.

While both companies have strong trading technology, TD Ameritrade edges out E*TRADE because they fill orders more quickly and provide better price improvement, along with better options analysis tools, trade journaling, and automated trading strategies.

Costs

E*TRADE and TD Ameritrade are both commission free for stocks and ETFs. TD Ameritrade charges $0.65 per options trade, while E*TRADE charges $0.65 with a price break down to $0.50 for traders making more than 30 trades per quarter. While free at other brokers, both E*TRADE and TD Ameritrade both charge $6.95 for OTC trades, with E*TRADE again offering a discount to $4.95 per trade for active traders. Bond fees at E*TRADE are $1 per bond bond, with a  $10 minimum and $250 maximum, while TD Ameritrade does not charge commission for US Treasuries at auction but all other bond fees are netted out with the price so you don’t know how much you are charged. Foreign exchange at TD Ameritrade also works on a net price basis. 

Futures commissions at E*TRADE are $1.50 per side plus fees for everything but Bitcoin futures, which are $2.50, while you pay $2.25 per side plus fees for all futures contracts at TD Ameritrade. Margin rates are lower at E*TRADE at all break points; E*TRADE charges 8.70% for accounts with balances of $10,000 vs. TD Ameritrade’s rate of 9.25%; 8.45% vs. 9.00% on $25k balances; 7.95% vs. 8.00% at $50k; and 7.45% vs. 7.75% for $100,000 accounts. Mutual fund trades outside of the no transaction fee program cost $19.95 at E*TRADE and $49.95 at TD Ameritrade. Neither company charges for inactive accounts or minimum balances, but TD Ameritrade charges $2 per paper statement for accounts with low balances.

Costs at E*TRADE are better than TD Ameritrade’s for having lower options commission for more active traders, lower futures commissions for most contracts, lower margin rates, and more transparent bond prices. Those interested in currency trading, however, would have to look at TD Ameritrade since E*TRADE doesn’t offer FX trading.

Account and Research Amenities

Both E*TRADE and TD Ameritrade provide their customers with a number of great amenities for research, news, market updates, and scanners. They both have screeners for stocks, ETFs, and mutual funds with multiple criteria, the ability to screen on technicals, save screens for later use, and create watchlists. They also both have screeners for bonds in addition to options strategy builders. One significant difference between the two is that E*TRADE allows users to screen stocks, ETFs, and mutual funds both thematically and for socially responsible investing (SRI) and environment, social, governance (SRI/ESG) criteria, while TD Ameritrade does not offer thematic or ESG/SRI screening. Both platforms have stock and market data that goes back at least 35 years, but TD Ameritrade provides more than 35 years of implied and actual volatility data compared to just one year of this data at E*TRADE. Both companies provide charting that includes multiple studies, drawing tools, and indicators.

Despite the large amount of similarities, we give E*TRADE the edge on research and amenities because they have more preset screens and ESG/SRI criteria for screeners. This makes a difference for the growing share of investors that want to choose investments that are socially and environmentally responsible. 

Portfolio Analysis

Here again, both E*TRADE and TD Ameritrade have excellent portfolio analysis tools, including account performance and tax lot tools, and real-time reporting of realized and unrealized capital gains, margin, buying power, and account balance data. On both platforms, portfolio analysis is customizable and supports consolidation of outside accounts for reporting and analysis. E*TRADE provides the ability to calculate the tax impact of a future trade, while TD Ameritrade does not. Going in the other direction, TD Ameritrade provides internal rate of return (IRR) and/or time-weighted rate of return (ROR), while E*TRADE does not. 

E*TRADE and TD Ameritrade have a wide range of portfolio analysis tools that overlap, so we see this category as a tie.

Education

Both E*TRADE and TD Ameritrade have vast amounts of excellent educational content for beginners and seasoned traders. Both brokers feature extensive libraries and information on various topics, goals, and objectives. Both companies have a glossary, with E*TRADE’s being more extensive. TD Ameritrade, as our top rated broker for education, has an edge on E*TRADE through its use of technology to curate educational content for each individual customer based on criteria such as account holdings and history. 

Customer Service

TD Ameritrade and E*TRADE both have 24/7 telephone support, live chat with customer service, and the ability to speak with a live broker. TD Ameritrade allows clients to talk with a financial advisor, while you need to be a qualified customer at E*TRADE to speak with a financial advisor. Most importantly, TD Ameritrade’s average hold time for customer service is 43 seconds, while the large increase in trading during the pandemic has E*TRADE’s average wait times up 65% at more than 11 minutes. 

TD Ameritrade has the edge in customer service simply because it takes more than ten times longer on average to get someone on the phone at E*TRADE. 

Security

E*TRADE and TD Ameritrade both have two-factor authentication on all of their platforms, with fingerprint and facial recognition available for the mobile apps. Both brokers offer additional account protection above Securities Investors Protection Corporation (SIPC) coverage, and neither broker has had a data breach in the past four years. TD Ameritrade will also reimburse customers who lose cash or securities from unauthorized activity in their accounts.

TD Ameritrade and E*TRADE both encountered some login issues in 2020 because of the significant increase in activity volume during the Covid pandemic. Further, like many brokers, some E*TRADE and TD Ameritrade customers experienced difficulty placing orders during the market frenzy related to GameStop and other stocks in January 2021. 

While very close with their security offerings, we give a small edge to TD Ameritrade because of their customer reimbursement for unauthorized account activity. 

Our Verdict

E*TRADE and TD Ameritrade are both excellent brokers with very solid platform offerings that will cater to all investor types. We feel TD Ameritrade has the stronger offering, even though there are a couple of spots with higher commissions. We landed on this primarily because TD Ameritrade offers functionality currently unavailable at E*TRADE, such as backtesting and customized trading strategies. Further, TD Ameritrade’s options analytics are better than E*TRADE’s and their educational offerings provide another edge. Finally, their customer service is more than ten times faster in responding to support phone calls. 

On the flipside, E*TRADE is a better choice for fixed income because of more transparent fees and support for bond trading on its mobile app. E*TRADE is also the better choice for investors interested in ESG/SRI investing because it has more capabilities in this space. Obviously, it is extremely close when comparing brokers near the top of our ranking. Although we have given TD Ameritrade the edge in this comparison, most investors wouldn’t go wrong with either of these highly ranked brokers. 

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Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system. Read our full methodology.



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