Overview of TD Ameritrade and Ally Invest
Which brokerage house is able to provide the trading experience you seek, Ally Invest or
TD Ameritrade (TDA)? Ally has a discrete forex platform, while TD Ameritrade offers traditional
portfolio management.
For more information on these two brokers, continue reading.
Pricing
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Margin
Rate |
Maintenance
Fee |
Annual IRA
Fee |
|
Ally Invest
|
$0
|
$9.95
|
9.25%
|
$0
|
$0
|
|
TD Ameritrade
|
$0
|
$49.99 ($0 to sell)
|
11%
|
$0
|
$0
|
As you see, Ally Invest is better priced broker for mutual funds investors and margin traders. Stocks and ETF
investors have the same commissions at both brokers.
Services
Promotions
Ally Invest:
Up to $3,000 cash bonus + $0 commission trades.
TD Ameritrade: $0 commissions + transfer fee reimbursement.
TD Ameritrade Pros and Cons
If you open an account at TD Ameritrade, you will be able to:
- Trade futures contracts
- Add checks and a debit card to your account (and a credit card, too)
- Trade on a professional-level platform
You will have to put up with these downsides, though:
- Software can be hard to learn
- Mutual fund investors have above-average fees
Ally Invest Pros and Cons
If you open an account with Ally Invest, you will get:
- A very low $9.95 per mutual fund commission
- Free robo service
- Large list of mutual funds
But Ally comes with these disadvantages:
- Very basic software
- Educational resources are limited
- Small selection of retirement accounts
First Category: Available Assets
Brokerage firms don’t always offer the same lineup of tradable instruments. And that’s certainly true in this survey. TD Ameritrade offers these investment vehicles:
- Bonds and bond equivalents
- Stocks
- Exchange-traded, mutual, and closed-end funds
- Forex
- Futures
Ally Invest doesn’t offer futures, but it does provide trading in precious metals. The rest of the list is the same.
Winner: Overall, pretty even
Second Category: Education
TD Ameritrade customers who need some guidance have a lot of help thanks to the broker’s very large library of resources. On the website, for example, we found materials in many formats. These include articles, videos, self-guided courses, webcasts, and in-person events (when there’s not a virus pandemic). Examples of videos we found include:
- Placing Stop Orders on Stocks (2:39)
- The Pattern Day Trading Rule Explained (4:49)
- Public vs. Private Companies (2:26)
Two other resources worth mentioning are thinkMoney® magazine, the company’s quarterly publication, and TD Ameritrade Network, the company’s live broadcast video feed.
On the Ally Invest website, we found short articles and a few videos on investing and personal finance. The latter category of materials comes from Ally Bank. Combined, there are many good reads. Here are a few examples:
- Investing in the Housing Market: What Are Your Options?
- Why Having a Diversified Portfolio Is Important
- How to Short a Stock — And What You Should Know Before Doing So
The last article has a short animated video embedded in it to make the learning process a little easier. The broker’s YouTube channel does have a few hundred videos on it. TD Ameritrade’s has even more.
Winner: TD Ameritrade
Third Category: Website Trading
When you’re ready to start buying and selling, a good place to start is a user-friendly website.
TD Ameritrade has one, and at the bottom of the screen is a trade bar. Called SnapTicket, this
widget delivers several nice features.
The regular order ticket on TD Ameritrade’s website has contingent orders, also known as trade triggers. And there are several other advanced order types:
- Bracket orders
- One triggers another (OTA)
- One cancels another (OCA)
- One triggers OCA (OT/OCA)
Like TD Ameritrade, the Ally Invest site has a trade bar. Like SnapTicket, it can send orders for ETFs and equities. But there is no rapid-fire mode, which can send orders with just a string of characters (like s200ge34.89 to sell 200 shares of GE at a limit price of $34.89).
The regular Ally trade ticket has just 5 order types. One of them is market on close, which doesn’t appear on TD Ameritrade’s website. However, TD Ameritrade’s site has trailing orders, which Ally Invest doesn’t provide.
The best trading experience on Ally Invest’s website will be found on LIVE, the firm’s browser platform. It has several option tools but the same trade ticket.
Winner: TD Ameritrade
Fourth Category: Desktop Software
For the most trading power, you’ll want to upgrade to a desktop program. Both firms offer them. Ally Invest has a third-party platform from Quotestream (review). Ally requires 30 trades per quarter to use it. In return, you’ll get:
- Watchlists
- Earnings calendar
- Time & sales data
- Advanced charting
TD Ameritrade customers can use the broker’s in-house platform. Called thinkorswim, it has no minimum trading requirements, the first advantage over Quotestream at Ally. thinkorswim boasts around 400 technical studies, which is 5 times the number Quotestream has. thinkorswim also has live streaming of CNBC, which is missing in action on Quotestream.
Winner: TD Ameritrade
Fifth Category: Mobile Apps
Neither broker stopped at desktop trading. During our investigation, we found both brokers’ apps to be user friendly and easy to learn.
TD Ameritrade actually has two apps: a regular version and a thinkorswim app. The latter platform is a trading heavyweight with an advanced order ticket and excellent charting. Futures and forex can be traded on it, but strangely Level II quotes are on the other app.
Perhaps the biggest blemish TD Ameritrade has in this category is that neither of its apps can submit orders for mutual funds. But then again, Ally’s app doesn’t have that ability, either.
The thinkorswim app does provide several features not found on the Ally app, including live streaming of CNBC.
Winner: TD Ameritrade
Sixth Category: Forex Trading
It’s pretty unusual for a securities broker to offer trading in forex. It’s even more uncommon to have two brokers in the same comparison to offer currency trading. But that’s what we have here.
TD Ameritrade customers trade currencies on thinkorswim, while Ally Invest clients trade on one of two currency platforms: Ally’s in-house program or MetaTrader. Ally customers also get an independent mobile app for currency trading (TDA customers use the thinkorswim app).
Ally Invest offers 80+ currency pairs, which is a little more than the 70+ we found at TD Ameritrade. Neither broker charges any commissions, although both make money off of bid-ask spreads.
Winner: Ally Invest
Seventh Category: Cash Management Tools
If you need some banking tools added to your brokerage account, both TD Ameritrade and Ally Invest can get the job done. TD Ameritrade offers checks and a Visa debit card free of charge with twice the usual amount of FDIC insurance. With the debit card, you can withdraw funds from any ATM in the United States fee-free.
Ally Invest also offers a debit card with checkwriting. However, unlike its rival here, Ally Invest charges $35 per year to use its debit card. There’s also an annual checkwriting fee of $20. Moreover, the broker charges a $5 per-check fee.
It would be possible to link an Ally Bank account with more generous policies, but the company’s banking unit limits the number of ATM fee rebates per month. TD Ameritrade doesn’t.
Winner: TD Ameritrade
Eighth Category: Margin Borrowing
If you’re short on cash, but still want to invest, you could always buy securities with borrowed
funds. Doing so will of course come with interest assessed against your margin account. Ally Invest
charges between 4.75% and 9.25%,
depending on how much you borrow. TD Ameritrade’s sliding scale ranges from
9% to 11%.
Neither broker provides margin details for long or short positions on asset profiles, a significant defect.
Winner: Ally Invest
Ninth Category: Miscellaneous Services
IRAs: TD Ameritrade offers more IRA types than Ally Invest (with SEP, SIMPLE, and Minor accounts). Plus, it doesn’t charge a closeout fee. Ally Invest charges $25.
Dividend reinvestment program: With an account at either firm, you’ll be able to transform cash dividends into additional shares of the securities that paid them.
Automatic mutual fund investing: TD Ameritrade offers this service, but not Ally.
Fractional-share trading: Neither broker in this match offers whole-dollar investing (except in mutual funds).
IPO availability: TD Ameritrade customers who place 10 trades per month or who have at least $250,000 in assets can participate in Initial Public Offerings. They can also sign up for IPO alerts through the TDA website. Ally Invest does not offer these services.
Extended hours: Pre-market trading and after-hours trading are available at both firms. TD Ameritrade has longer sessions.
Winner: TD Ameritrade
Our Recommendations
Mutual funds: TD Ameritrade customers have access to 10,381 mutual funds, while Ally Invest has 10,572. Pretty close. But only TD Ameritrade has no-load, no-transaction-fee funds. We pick TD Ameritrade.
Stock/ETF trading: With thinkorswim and SnapTicket, TD Ameritrade gets our stamp of approval.
Beginners: With a better website, more educational materials, branch locations, and simulated trading on thinkorswim, TD Ameritrade is the easy choice.
Small accounts: Neither company has any fees or minimums for taxable accounts. For IRAs, we propose TD Ameritrade (with no closeout fee).
Retirement savers and long-term investors: Several target-date mutual funds at TD Ameritrade have no load and no transaction fee. Plus, the broker has more retirement accounts than Ally Invest.
Promotions
Ally Invest:
Up to $3,000 cash bonus + $0 commission trades.
TD Ameritrade: $0 commissions + transfer fee reimbursement.
Ally Invest vs TD Ameritrade Results
Although TD Ameritrade easily won this competition, Ally Invest remains the top dog for precious
metals and currency trading.
The two online investment companies provide a lot of unique and valuable features. Our suggestion is to open
accounts at both firms with $0 down (it will take only about 20 minutes), and take advantage of everything
these top online brokers have to offer free of charge. Investors can decide later into which brokerage account
they want to deposit most of their money.
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