TD Ameritrade vs Charles Schwab
Charles Schwab and TD Ameritrade are two popular brokerage firms
who claim to offer their clients the best in investment services. So which broker actually has the better value for traders? The
following contest will provide the answer.
Trading Fees and Account Minimums
TD Ameritrade’s price for trading stocks and ETF’s is $9.99, while Schwab charges $6.95 for the same securities. For options, both firms charge an extra $0.75 per contract.
Clients who place a trade with a living, breathing broker at TD Ameritrade will be set back a massive $44.99, while doing the same at Schwab costs a more reasonable $33.95.
Investors looking to trade ETF's without trading fees will not be disappointed with either broker. TD Ameritrade offers more than 100 commission-free ETF's, while Schwab has more than 175.
Brokerage accounts at both companies have neither account maintenance fees nor inactivity fees. The required initial deposit to open an account at Schwab is at least $1,000, while
TD Ameritrade has a no minimum. Schwab's required deposit can be waived by opening a bank account with the brokerage account. Both brokers also have
Schwab wins in this category by a very small margin.
TD Ameritrade vs Charles Schwab: Mutual Funds
Schwab offers its clients several thousand mutual funds. More than 3,500 of these are OneSource mutual funds, which have no loads and no transaction fees. Mutual funds that do carry a
transaction fee are a steep $76 to buy, although free to sell.
TD Ameritrade has more than 11,000 mutual fund offerings. Nearly 2,000 come with no load and no transaction fee. Funds that have a transaction fee are a rather uncomfortable $49.99 to trade.
With thousands of commission free funds, TD Ameritrade and Charles Schwab are tied in this category.
Education and Research
Clients of TD Ameritrade will find great research for investment products. Traders have access to
free securities reports from Morningstar, Credit Suisse, TheStreet.com, and other independent researchers. The broker also provides its customers with Investools, an online tool that offers classes at the beginner, advanced, and expert levels on a wide range of investment topics.
Schwab has excellent research capability for securities. Customers have access to stock reports from Morningstar, Thomson Reuters, and others, all at no cost. Customers also have free access to the very helpful Schwab Equity Ratings, which cover around 3,000 U.S. stocks and evaluate them on an A, B, C, D, and F grading scale. The broker also offers report cards on mutual funds free of charge.
Pretty close in this category.
Customer service at Schwab can be contacted using an on-line chat system. Customers can also contact Schwab by phone, fax, or e-mail. The phone service is staffed around the clock.
The broker also provides phone numbers for Chinese speakers and customers traveling outside the United States. Schwab has more than 325 brick-and-mortar branches.
TD Ameritrade has phone service staffed 24 hours a day, 7 days a week. Representatives are available limited hours of the day who are fluent in Cantonese, Mandarin, or Spanish.
The brokerage has more than 100 brick-and-mortar branches located across the United States.
Neither broker has a clear advantage in this category.
TD Ameritrade has several trading platforms, all of which come with Level II quotes free of charge. The most basic platform is the web site, which is
easy to use. Next is Trade Architect, a Java-based system that is launched from the web
site. The final platform is Thinkorswim, a desktop platform, arguably the best on the
market. All systems are exceptionally well designed, packed with features, and free to use.
A nice tool that TD Ameritrade offers is paperMoney, a practice platform within Thinkorswim that lets clients simulate trading with a virtual currency.
Schwab's web site is straightforward and easy to learn. Within the web site there is Trade Source trading platform, available after logging in to
the main web site. Trade Source is user friendly, but only offers basic trading data. The broker’s top trading platform is
StreetSmart Edge, available via the cloud or as a desktop program. StreetSmart Edge is
free of charge to clients who maintain a $1,000 minimum account balance.
This category easily goes to TD Ameritrade.
TD Ameritrade vs Charles Schwab: Mobile Apps
Schwab offers its clients applications for Apple, Android, Kindle Fire, and mobile web. The app is intuitive and easy to learn. Users have the ability to transfer funds between Schwab and non-Schwab accounts, make a mobile check deposit, contact customer service, place trades, or pay bills.
TD Ameritrade has three different apps: Mobile App, Mobile Trader App, and a Thinkorswim app. All three apps can be used on iPhone, iPad, and Android.
Having three different apps for investors with different experience level (beginner, mid-level and advanced) is a smart move. The Thinkorswim app has
paperMoney for customers who want to practice trading on a mobile platform.
Overall, TD Ameritrade wins here too.
Cash Management Features
Schwab has an FDIC-insured bank that offers its brokerage customers a checking account, which comes with free checks and a free Visa debit card. ATM fees are reimbursed worldwide, and the account is insured up to $250,000.
TD Ameritrade offers its customers a checking account with a free Visa debit card and free checks. There are no monthly account fees, and ATM fees are reimbursed throughout the U.S. The account balance is insured up to $500,000 rather than the standard $250,000, because the balance is swept in up to two FDIC-insured banks.
Pretty even in this category.
TD Ameritrade offers its clients futures and
forex trading. Futures trading is available at Schwab's affiliate, OptionsXpress, which can be conveniently linked to a Schwab account. Unfortunately, forex trading is no longer available at OptionsXpress.
Schwab provides its customers access to global markets. Investors can trade foreign stocks in a regular brokerage account utilizing the broker's Global Investing Services desk. The broker also offers a separate international account suitably titled the Schwab Global Account. With this account, clients can trade securities in twelve foreign markets using eight different currencies.
Overall, a tie here.
TD Ameritrade vs Charles Schwab: Results
There were five ties, TD Ameritrade (read review) was victorious in two categories, and
Schwab (read review) was victorious in one category. Both brokers are pretty even.
Because of more advanced trading tools designed for customers with every experience level, TD Ameritrade is our recommendation to most investors.
Updated on 2/2/2017.
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