TD Ameritrade vs Vanguard
Vanguard and TD Ameritrade Rivalry
Vanguard and TD Ameritrade are popular brokerage firms, although there are some significant differences between them. Let's take a detailed look at what each firm has to offer, and try to determine which broker is the better value.
Commissions and Account Requirements
TD Ameritrade customers pay $9.99 for stock and ETF trades, while Vanguard clients are on a sliding scale, ranging from $0 to $20. Customers with less than $50,000 invested in Vanguard ETF's and mutual funds are charged $7 for the first 25 trades and $20 for all subsequent trades. This policy is applied on an annual basis. Many Vanguard customers will fall in this category. Investors at Vanguard can get 2 trades per month on average at $7 with this fee schedule.
Derivative traders at TD Ameritrade pay an extra $0.75 per contract for options. Traders at Vanguard pay $1 for every contract in addition to a base charge of $20, $7, or $1, depending on the amount of Vanguard funds in the account. Traders with less than $50,000 in Vanguard mutual funds and ETF's pay $20 plus $1 for every contract.
Placing a trade with a living, breathing broker at TD Ameritrade costs $44.99. Vanguard's fee is variable and is determined by account size. The fee ranges between $35 and $0, much lower in any case than TD Ameritrade's.
Securities accounts at both brokers have no inactivity or annual fees (at Vanguard, customers with under $50,000 deposited in Vanguard ETF's and mutual funds must sign
up for electronic delivery of communications). Both brokerage firms have no opening deposit requirement.
Overall, it's a tie here.
TD Ameritrade vs Vanguard Funds
TD Ameritrade clients have access to more than 11,000 mutual funds. Nearly 2,000 come with no load and no transaction fee. Mutual funds with a transaction fee are a somewhat pricey $49.99.
Vanguard has more than 16,000 mutual funds for its clients to trade. Some of these funds have no transaction fee and no load. Mutual funds that do have a transaction fee are $35 in a standard account (under $50,000 in Vanguard funds). Accounts with higher Vanguard fund balances pay either $20 or $8.
TD Ameritrade has 101 ETF's that can be traded at no cost, while Vanguard offers 55. Vanguard ETF's have an expense ratio on average of 0.12%. The expense ratios of the TD Ameritrade listings vary between 0.05% and 0.85%. Some of TD Ameritrade's commission-free ETF's are Vanguard funds.
Too close to call here.
Education and Research
TD Ameritrade has excellent research for securities. Traders have access to free equity reports from several third-party analysts. A search tool called Bond Wizard leads investors step-by-step to find appropriate fixed-income investments. The broker also has many educational videos on its website, covering topics such as how to buy put options, and how to trade forex using margin.
Vanguard has good information on its website for investors planning for education and retirement. There are educational pamphlets on its site in pdf format. The broker has effective screeners for all major securities. Third-party stock reports from Argus and MarketGrader are available to Vanguard clients at no cost. The site has fewer instructional videos compared to TD Ameritrade.
Vanguard loses this category.
TD Ameritrade has phone representatives available 24/7. At certain hours of the day, there are reps who speak Cantonese, Mandarin, and Spanish. The firm has a nationwide network of branches, with more than 100 locations currently.
Vanguard has weekday phone service. The broker offers a phone number for investors traveling outside America. Regrettably, the broker does not have local branches.
TD Ameritrade wins this category.
TD Ameritrade has multiple platforms. First is the web site, which is easy to use. Next is Trade Architect,
a Java-based system. The final platform is thinkorswim, a desktop platform. There are no frequent trader
requirements for any platform. A valuable tool that TD Ameritrade has is paperMoney, a system within thinkorswim that lets users practice trading with a fake currency.
Vanguard's site is more difficult to navigate than TD Ameritrade's. Trading occurs within the web browser with basic trade pages. Regrettably, the broker doesn't have an advanced trading platform.
TD Ameritrade easily wins the category.
Vanguard has apps for Kindle Fire, iPad, iPhone, and Android. The app is user friendly. Users can make a mobile check deposit, get in touch with customer service, or place trades. Unfortunately, there's no live streaming of news.
TD Ameritrade has a total of three apps: Mobile app, Mobile Trader app, and a thinkorswim app. They can be used on Apple and Android. The standard Mobile app can also be used on Windows 10. The thinkorswim app has live streaming of CNBC, which the Vanguard app lacks.
TD Ameritrade wins the category, once again.
TD Ameritrade clients can open a checking account, which comes with a free Visa debit card and free checks. There are no monthly account fees, and ATM fees are reimbursed nationwide.
Vanguard provides a cash management account, but clients are required to have $500,000 in Vanguard ETF's and mutual funds to apply. Both checks and the debit card come with fees for investors who have less than $1,000,000 in Vanguard assets.
TD Ameritrade wins this category without a doubt.
TD Ameritrade offers both forex and futures
trading. Vanguard offers neither.
Once again, TD Ameritrade is victorious.
TD Ameritrade vs Vanguard Results
TD Ameritrade (read review) won six categories, there were two ties, and Vanguard (read review)
didn't win one category. TD Ameritrade wins easily. Even so, Vanguard is still a good option for investors with at least $50,000 who want to invest in funds with
low expense ratios.
Updated on 7/1/2016.
Review discount online brokerage firms comparison: Vanguard or TD Ameritrade? Differences between investment companies. Recommendation for stocks, options, ETFs, mutual funds, bonds investors. TD Ameritrade versus Vanguard for beginner
investors, long term, individual retirement accounts, active/day traders. See what stock broker service is better, cheaper, offers lower fees, cost, rated higher and easier to use. Which broker should you choose?