E-Trade and TD Ameritrade are two of the most popular online brokers, and both offer a lot that investors will like. You’ll get commission-free trades on stocks and ETFs, thousands of no-transaction-fee mutual funds to choose from and customer service options that are available 24/7.
While these brokers have a lot in common, there are some subtle differences between the two offerings and future changes to be aware of. TD Ameritrade was purchased by Charles Schwab in 2020 and the companies expect integration to be complete sometime in 2023. So if you’re considering opening a new TD Ameritrade account, it’s worth looking at Schwab to see if you like their offering as well. E-Trade was acquired by Morgan Stanley in 2020.
So how do you know which one is right for you? That will depend on your unique circumstances and what features you’re looking for in an online broker. Here’s how E-Trade and TD Ameritrade compare on some of the most common features.
| BROKER CATEGORY | E-TRADE | TD AMERITRADE |
|---|---|---|
| Stocks and ETF commissions | $0 | $0 |
| Options commissions | $0.65 per contract | $0.65 per contract |
| Account minimum | $0 | $0 |
| Tradable securities | Stocks, ETFs, bonds, mutual funds, options, futures | Stocks, ETFs, bonds, mutual funds, options, futures, forex |
| Account fees | $25 for partial transfers/$75 for full transfer out | $75 transfer-out fee |
| No-transaction-fee mutual funds | 4,400+ | 3,700+ |
| Account types | Individual and joint taxable, IRAs, small business (SEP IRA, solo 401(k), etc.), custodial, 529, managed portfolio and trust, among others | Individual and joint taxable, IRAs, small business (SEP IRA, solo 401(k), etc.), custodial, 529 and trust, among others |
| Mobile app | E-Trade Mobile app on the Apple App Store, Google Play Store and Amazon | TD Ameritrade Mobile and thinkorswim Mobile apps on the Apple App Store and Google Play Store |
| Fractional shares | For dividend reinvestment only | For dividend reinvestment only |
| Customer support | 24/7 availability on phone, chat and email, 30+ branches | Phone availability 24/7, Facebook and Twitter messaging, 175+ branches |
E-Trade vs. TD Ameritrade: Costs
E-Trade and TD Ameritrade both do a solid job keeping costs low for investors, but E-Trade has a slight advantage in a couple areas. You won’t pay commissions for stock and ETF trades at either broker, and options trades will run you $0.65 per contract. If you’re a heavy options trader, you can get a discount to $0.50 per contract at E-Trade as long as you make at least 30 trades per quarter.
Both brokers offer at least 3,000 mutual funds with no transaction fees, which makes them attractive to those saving for retirement or other long-term goals. E-Trade has more than 4,400 of these funds, while TD Ameritrade has more than 3,700, but you should be able to find a fund that fits your needs at either broker.
When it comes to account fees, both E-Trade and TD Ameritrade charge transfer-out fees, but E-Trade will waive the fee as long as you leave at least $5,000 in your account. Of course, if you’re transferring your entire account, you will have to pay the full $75 fee.
E-Trade vs. TD Ameritrade: Account minimum
You won’t find account minimum requirements at E-Trade or TD Ameritrade, which may appeal to new investors. You can open your account and then fund it whenever you’re ready with whatever amount you’re comfortable with at the time.
E-Trade vs. TD Ameritrade: Tradable securities
E-Trade and TD Ameritrade are also similar in terms of the number of securities you can trade through their platforms. Each broker offers stocks, bonds, ETFs, mutual funds, options and futures. These securities should meet the needs of most investors, but TD Ameritrade also offers forex trading if you’re looking for more exotic offerings. Crypto traders will need to find a different broker altogether, as neither E-Trade nor TD Ameritrade offer cryptocurrency trading.
E-Trade vs. TD Ameritrade: Account types
Both brokers offer just about every account type you could be looking for. You’ll find standard accounts like individual and joint taxable accounts, IRAs (Roth, traditional and rollovers), small business retirement accounts (SEP IRA, SIMPLE IRA and solo 401(k)) and 529 plans.
TD Ameritrade customers also are now able to access Schwab’s robo advisor offering, Schwab Intelligent Portfolios, which is one of the best in the industry. E-Trade offers its core portfolios for investors looking for a set it and forget it approach.
E-Trade vs. TD Ameritrade: Fractional shares
Fractional shares is an area where both brokers are lacking, but TD Ameritrade customers are now be able to access Schwab Stock Slices through their accounts. Schwab allows clients to buy fractional shares of any company in the S&P 500, giving new investors a way to get started without much in savings.
E-Trade offers fractional shares on reinvested dividends only, which is the same thing TD Ameritrade offered prior to the acquisition by Schwab.
Fractional shares have become a key offering in recent years as stock prices for popular companies such as Alphabet, Amazon and Tesla have, at times, increased into the thousands of dollars for one share. Fractional shares allow investors an opportunity to invest in companies like these and make sure that their full amount gets invested, instead of sitting in cash while they wait to be able to afford a full share.
E-Trade vs. TD Ameritrade: Customer support
E-Trade and TD Ameritrade each offer great customer service options if you have questions about your account. You’ll be able to get someone on the phone 24 hours a day, seven days a week, which is increasingly rare in today’s digital-first world. You’ll also be able to reach someone through chat, email or social media. Plus, each has physical locations if you need help in person. E-Trade has more than 30 branches across the U.S., while TD Ameritrade has more than 175.
Bottom line
Both E-Trade and TD Ameritrade should be able to meet the needs of both new and experienced investors alike. You’ll get low-cost trading and have access to most securities across many types of accounts. If you’re on the fence about which one to choose, it’s worth considering TD Ameritrade because of the upcoming integration with Schwab. Schwab was named Bankrate’s best overall broker in the 2022 Bankrate Awards and you’ll have access to many of its services immediately as a TD Ameritrade customer.
Think about the features that matter most to you in an online broker and use that to help narrow your selection. You can always open accounts with multiple brokers and benefit from the different features that each one excels at.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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May 26, 2022 at 10:21PM
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