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TD Ameritrade vs Vanguard

TD Ameritrade vs Vanguard 2015: Account Pricing, Commissions, Fees

TD Ameritrade

Vanguard Brokerage Services

  • Stocks and ETFs: $9.99
  • Stocks and ETFs broker assisted: $49.99
  • Stocks and ETFs interactive voice response (IVR) telephone system: $34.99
  • Options: $9.99 + $0.75 per contract
  • No-load mutual funds: $49.99
  • Treasuries at auction: $25
  • All other bonds and CMOs, CDs: on a net yield basis
  • Futures: $2.25 per contract (plus exchange & regulatory fees)
  • Forex: Non-commission currency pairs trade in increments of 10,000 units (and do not contain a "#" symbol suffix). There are no additional fees or charges.
  • Investment products: stocks, mutual funds, options, ETFs, bonds, CDs, UITs, futures, and forex
  • TD Ameritrade\TDA minimum deposit to open account: $0 for cash account, $2,000 for margin account
  • All TD Ameritrade fees

  • Stocks and ETFs: $7 for the first 25 trades, $20 for subsequent trades for account with less than $50,000
  • $7 for account with $50,000–$500,000 invested in Vanguard products (Voyager Services)
  • $2 for account with $500,000–$1,000,000 invested in Vanguard products (Voyager Select Services)
  • Free for first 25 trades, $2 for subsequent trades for account with $1,000,000-$10,000,000 (Flagship Services)
  • Free for first 500 trades, $2 for subsequent trades for account with $10,000,000+ (Flagship Select Services)
  • Options: $20 + $1 per contract (Voyager: $7 + $1 per contract; Voyager Select and Flagship: $2 + $1 per contract)
  • Options for accounts with over $1 million: $8 + $1.50 per contract
  • Mutual funds: Vanguard mutual funds - free. All others - Standard: $35; Voyager® and Voyager Select®: $20; Flagship®, $8
  • Certificates of deposit (CDs): Purchase: $5 per $1,000, Minimum: $50. Sale: $35 per transaction
  • Commercial paper: $50 per transaction; minimum purchase: $100,000
  • U.S. Treasury: Commission-free
  • Mortgage-backed securities: $50 per transaction; GNMA minimum purchase: $25,000
  • Investment products: stocks, options, mutual funds, bonds, CDs, foreign securities, insurance, commercial paper, ETFs
  • Vanguard minimum deposit to open account: $3,000
  • All Vanguard fees

TD Ameritrade vs Vanguard Brokerage Services: Pros

TD Ameritrade

Vanguard Brokerage Services

  • No surcharges on penny stocks, large orders, or after-hours trading
  • Large and well-known company with 126 local branches
  • Two excellent trading platforms: Thinkorswim and Trade Architect
  • Users can practice trading without risking real money using PaperMoney virtual trading
  • No-fee IRA accounts
  • No account maintenance or inactivity fees
  • Rich selection of independent, third-party research from 12 firms (Standard & Poor's, Morningstar, Jaywalk, TheStreet, etc.)
  • Large number of mutual funds - over 13,000 available; 2,500 NTF (no-transaction fee) funds
  • Free DRIP (dividend reinvestment plan)

  • Low cost and good performance Vanguard mutual funds
  • Commission-free Vanguard ETFs
  • Free dollar-cost-averaging transactions for no-fee mutual funds. $3 per transaction, minimum purchase $100, minimum two transactions, for transaction-fee mutual funds
  • Free DRIP (dividend reinvestment plan)
  • No ACAT fee

TD Ameritrade vs Vanguard Brokerage Services: Cons

TD Ameritrade

Vanguard Brokerage Services

  • At $9.99 for stocks and ETFs and $49 for mutual funds, commission rates are very high
  • High margin rates

  • High commissions for majority of investors
  • If account is not signed up for electronic statements, $20 annual account service fee is charged for each Vanguard fund with a balance of less than $50,000 in an account
  • Annual IRA fees: $25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans, $20 for 529 plan
  • Poor trading and research tools
  • $3,000 minimum to open account is somewhat high
  • No pre-market trading and shorter after-hours trading: 4:15 pm - 6:00 pm EST, instead of 4:00 pm - 8:00 pm EST

TD Ameritrade vs Vanguard Group: Comparison Summary

TD Ameritrade (TD Ameritrade Review) is less expensive for active investors than Vanguard Brokerage (Vanguard Review): $9.99 per stock and ETF trade versus $20 ($7 for the first 25 trades) at Vanguard. While TD Ameritrade doesn't have annual, inactivity or maintenance fees, Vanguard charges $20 annual fee for accounts with less than $50,000 (waived if account is signed up for electronic statements).

Vanguard provides limited trading tools and research amenities. One of the main advantages the company offers is their own ETFs that clients could get commission-free. We also like free dividend reinvestment and an ability to dollar-cost-average mutual funds investing.

TD Ameritrade is better brokerage than Vanguard for beginner investors, offering easy access to online trader community, where users can ask questions, learn from more experienced members, and even get investment ideas. It also offers free virtual trading environment that allows users to practice trading without risking their money.

TD Ameritrade acquired one of the most innovative online trading firms - ThinkOrSwim (ThinkorSwim Review) - and now offers two excellent, professional level trading platforms to its customers for free. The firm provides great selection of third-party, independent investment research from 12 companies (including Standard & Poor's, Morningstar, Jaywalk and TheStreet) as well as free streaming quotes.

TD Ameritrade doesn't charge IRA setup and annual IRA fees as well as low balance fees. We recommend it for a fee-free IRA account.

Overall, TD Ameritrade is rated much higher than Vanguard by all investor surveys and brokerage reviews, and it is offering more value to prospective customers than the competitor.

TD Ameritrade Promotion - 60 days free
trading + up to $600:

TDAmeritrade review

Vanguard Brokerage Services
Promotion - none:

Vanguard review

This article was updated on 2/9/2015.

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