ETrade vs. TD Ameritrade: Which is Better for Online Trading?
- November 8, 2018
- Posted by: Ashley Sutphin Watkins
- Category: Investing
At a Glance:
Investors tend to like ETrade for its user-friendly interface and platform, and its relatively low fees. TD Ameritrade, which acquired Scottrade in 2017, is more likely to be favored by long-term, passive investors. Each platform offers special pricing offers that might appeal to investors.
ETrade and TD Ameritrade are two of the largest online trading and brokerage platforms, and both are well-respected, established companies.
These two financial firms have been in the online trading business for quite some time. They offer similar reliable services, but they do have some differences. Some of the factors you should weigh when you’re considering an online investment and trading platform include:
- Fees. The cost of trades is one of the most important factors in shopping for a brokerage platform, especially if you make individual trades. Fees can add up quickly, so you want to compare the commissions for each individual trade, as well as commissions on investment products like ETFs and mutual funds.
- Account minimums. Consider how much you have to initially invest to open an account. If it is a smaller amount, a company’s account minimums could be important.
- Customer service. Research how others feel about the company’s interaction with customers as well as its interface, extra financial tools, and the overall technology.
- Discounts. Look for promotions when you open a new investment account. Both ETrade and TD Ameritrade are known for regularly offering appealing promotional offers.
ETrade vs. TD Ameritrade
Here, we offer a comparison of ETrade versus TD Ameritrade.
With a history that dates back 30 years, ETrade is the original name in online trading. This company is known for executing the first electronic trade made by an individual investor. Since that time they have led the way in terms of technology and investments advancements.
ETrade tends to be well-liked among investors because its interface and platform are easy to understand, and its fees are relatively low. This is an ideal platform for both beginning and advanced investors.
ETrade offers a number of different accounts.
- Brokerage accounts offer robust investment options and access to tools and education.
- Core Portfolios are a way for people to enjoy digital portfolios that are diversified but self-guided based on the investor’s individual goals and preferences.
- Custodial accounts can be opened on behalf of a minor.
- Traditional IRA, a Roth IRA, and Rollover IRAs are geared for retirement plans.
ETrade strives to make it easy to open an account with a Transfer Money service so that funds their account within three business days. Other options for funding include by check, wire transfer, or a transfer from an account from another firm.
Fees and Minimums
ETrade offers low priced options. The following is an example of some of the fee breakdowns:
- If you make fewer than 30 trades a quarter, stock and options trades are $6.95 each. If you make 30 or more trades a quarter, it’s $4.95.
- The options contract fee ranges from $0.50 to $0.75.
- Commissions on ETF trades range from $4.95 to $6.95, but there are commission-free ETFs available.
- For personalized investments through Core Portfolios, the minimum initial investment is $5,000. The flat annual advisory fee is 0.30 percent, but that’s waived for the first year.
- ETrade offers a variety of no-load mutual funds with no transaction fees.
- Broker-assisted trades are an additional $25 each.
What Else to Know
ETrade is frequently marketing special pricing and offers. For example, right now you can get up to $600 and 60 days of stock and option trades free of commission for deposits and transfers of at least $10,000.
TD Ameritrade acquired Scottrade in 2017, so now Scottrade accounts trade under the TD Ameritrade name. TD Ameritrade has a decades-long history in the financial services.
TD Ameritrade offers several types of accounts:
- Standard accounts feature investment products, trading platforms, and research. There are options for individual or joint accounts, and these accounts can be upgraded to trade futures, forex, and options.
- Traditional IRA, Roth IRA, and Rollover IRA are its retirement account option.
- Education accounts include 529 plans and the tax-free Coverdell account.
- Specialty accounts include pension plans and individual trusts.
- Other account options are managed portfolios and margin trading accounts.
Fees and Account Minimums
Much like ETrade, TD Ameritrade has flat-rate commission fees of $6.95 on all equity trades. There are no opening deposit minimums for standard accounts, and there are no specific trade requirements to access advanced features.
Other options and fees include:
- Certain ETFs with no commission fee and others for $6.95 a trade.
- Hundreds of mutual fund options with no transaction fees and that have no commission.
- Options trades are $6.95, and $0.75 per contract.
- Futures and options on futures are $2.25 per contract plus exchange and regulatory fees.
What Else to Know
TD Ameritrade ranks well for long-term investors, and there are no trade requirements or opening deposit minimums. Like ETrade, TD Ameritrade regularly has special promotions. Their current promotion is similar to ETrade’s, which is offering commission-free trading for 60 days and up to $600 if you meet certain qualifying conditions.
ETrade and TD Ameritrade are both have excellent options for brokerage platforms. Both companies offer fairly low fees as well as numerous commission-free mutual funds and ETFs. Both also offer lower minimum deposit options.
TD Ameritrade tends to work better for passive investors, while ETrade may be better for shorter-term, active investors because of their pricing, account options, and charting and objective research.