Ally Invest versus TD Ameritrade

Compare TD Ameritrade vs Ally Invest


Ally Invest or TD Ameritrade - which is better in 2018? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.



Overview


TD Ameritrade has a new competitor with the arrival of Ally Invest. Both brokers tout low commissions and advanced trading technology. The two firms offer a range of securities. Because both companies also offer futures and forex, they will attract the same client base. This article will compare the two firms against each other, and see which one is the better - Ally Invest or TD Ameritrade.

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
TD Ameritrade $6.95 $49.95 $6.95 + $0.75 per contract $0 $0
Ally Invest $4.95 $9.95 $4.95 + $0.65 per contract $0 $0

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
TD Ameritrade
Ally Invest


Customer Support


Both companies offer customer service around the clock over the phone. Ally Invest also has associates who can be reached through an on-line chat function. TD Ameritrade has a robo-chat function called Ted. It is able to answer questions fairly well, but it’s not a human representative.

TD Ameritrade has more than 600 physical locations throughout the United States for clients who want in-person service. Ally Invest has zero. What Ally does have is a community forum on its website where traders can connect with each other or an Ally employee. TD Ameritrade does not offer this feature on its website.

Both websites do a decent job of providing self-help features, although the TD Ameritrade site seems to have more helpful FAQ’s.

Overall, this category is too close to call.


Mutual and Exchange-traded Funds


TD Ameritrade’s mutual fund screener returns 11,927 products that are available for purchase. Out of this list, 2,304 come with no load and no transaction fee. The screener has many variables to search by. These include Morningstar style box, portfolio turnover rate, cash flow growth, and gross expense ratio. It’s easy to browse through the screener’s results, as all variables are sortable.

A mutual fund at TD Ameritrade that isn’t on the company’s NTF list comes with a rather steep $49.99 fee, and even worse, it’s applied to both purchases and sales. NTF funds that are sold in less than 180 days after purchase also are assessed a $49.99 fee.

The Ally Invest mutual fund screener returns 8,095 securities that are open to new investors. From this group, there are 1,672 funds that have no load. Unfortunately, Ally does not offer any funds that are both no-load, and no-transaction-fee. The screener isn’t as functional as TD Ameritrade’s. Buy and sell buttons on Ally’s screener, for example, produce the broker’s stock trading system, a technical glitch.

No-load mutual funds at Ally Invest come with a $9.95 transaction fee. Load funds are always free to trade. Ally is one of the few brokers not to charge a short-term redemption fee on early sales of mutual funds.

For ETF traders, TD Ameritrade provides 296 products that are commission-free. Ally has continued TradeKing’s policy of not offering any ETF’s that are free to trade.

Although Ally Invest has a few advantages in this category, TD Ameritrade seems like the overall better choice.


Ally Invest vs Ameritrade


Tech Offerings


TD Ameritrade customers get to use a website that is easy to navigate. The bottom of the browser hosts SnapTicket, a user-friendly trading ticket. It can place orders for stocks, ETF’s, and options; and it can even display a small chart. The broker has two trading platforms: Trade Architect and thinkorswim. Trade Architect is browser-based and is the simpler of the two. Thinkorswim is a desktop program and is quite sophisticated. It includes free streaming of CNBC, a paper trading function, and very advanced charting. Nevertheless, it carries no frequent trader requirement.

Ally Invest LIVE is a simple browser-based trading system that is free for all clients. QuoteStream was an advanced platform that TradeKing offered, and it does not appear that Ally Invest is offering it. There is a trade ticket at the bottom of Ally’s investment site, although it’s not as advanced as SnapTicket.

Ally Invest fails here.


Mobile Apps


Ally Invest customers can use the regular Ally mobile app, which now has investment functions. It can be used to place trades for equities and options. Limited market news is available. A charting feature can show price histories of stocks along with technical studies and comparisons. Option chains are on the app as well.

Despite the nice features on Ally’s platform, TD Ameritrade has even more. For instance, TD Ameritrade offers funds transfer, which is not currently possible for Ally Invest customers. Ally just recently acquired TradeKing, and some wrinkles probably have not been ironed out. Nevertheless, longer term, the Ally app probably will not have 400 technical studies, which the thinkorswim app does have. Two of the three apps TD Ameritrade provides also offer live streaming of CNBC at no cost.

TD Ameritrade seems to have the edge here.


Ameritrade vs Ally Invest


Pricing


Stock and ETF trades at Ally Invest cost $4.95. The broker gives a discount to clients who had an average daily balance of at least $100,000 in the previous quarter or placed at least 30 trades in the same time period. Option contracts cost 65¢, and traders who meet the above requirements pay only 50¢. A margin loan under $5,000 costs 9.50%.

TD Ameritrade charges $6.95 for equity transactions. It offers no discounts to active traders. Derivatives cost 75¢ per contract. Margin accounts currently pay 9.25% for debits under $5,000.

Neither broker charges an annual fee for a brokerage or retirement account. There is also no minimum deposit to open a securities account with either firm.

Overall, Ally Invest has the better schedule here.


Promotions


Ally Invest: Up to $3,500 cash bonus + commission free trades for new accounts.

TD Ameritrade: Trade free for 60 days + get up to $600.


Futures and Forex


Both brokerage firms offer trading in futures and forex. They are rare in the industry for offering both. At Ally, forex can be traded on a dedicated currency platform, and a practice account is available. It is more user-friendly than thinkorswim, which is where forex is traded at TD Ameritrade. The spread at Ally on EUR/USD was recently 5.4, while TD Ameritrade shows 3.0.

Futures at Ally Invest start at 45¢ per contract. There is a dedicated platform for the product. At TD Ameritrade, futures are traded on thinkorswim and start at $2.25 for each contract. The broker’s website seems to have more educational information on futures and forex, compared to Ally Invest.

Overall, it’s pretty close here.


Managed Accounts


Ally Invest and TD Ameritrade both offer managed account options for customers who don’t have the time, confidence, or ability to make trading decisions. Ally charges just 0.30% for its portfolio management service. Despite the low charge, the company does not use a software program to make trading decisions. There is a $2,500 minimum to start the service.

TD Ameritrade has several account management options. One is a robo-advisory service that costs 0.30% and carries a $5,000 minimum. Although these numbers seem less appealing than Ally’s, TD Ameritrade’s questionnaire is much more thorough and detailed. Like Ally’s service, this low-cost management system invests only in ETF’s with small expense ratios.

TD Ameritrade has the better selection here.


Research and Education


Learning materials are available on both websites. TD Ameritrade clients have access to a large library of videos and playlists of videos on a wide range of financial topics. These include not just futures and forex, but also retirement, mutual funds, technical analysis, strategies to reduce volatility, and much more. A progress tracker is integrated in the broker’s education section. It keeps track of completed lessons and awards achievement icons. There are self-guided quizzes on various securities, including options and bonds.

TD Ameritrade also provides a 7-day trial membership in its affiliated but separate educational company investools. This group offers in-depth coaching and learning on a host of trading topics.

Ally Invest also has learning materials on its website, but they don’t seem as advanced as TD Ameritrade’s materials. Ally provides mostly articles, and they’re fairly short. It’s hard to find educational videos on the Ally Invest website, although there are some on its blog. Ally’s trader community would be a good place to ask questions and connect with other investors.

The Ally Invest education center provides an option of choosing materials based on market outlook, such as bullish or bearish. But both choices produce the same list of materials. The link for ‘On-demand videos’ produces a list of articles.

TD Ameritrade easily wins here.


Ally Invest vs TD Ameritrade Results


Ally Invest (read review) succeeded in one category, TD Ameritrade (read review) was victorious five times, and there were two ties. TD Ameritrade is the winner. Despite the results, Ally Invest would be a good broker for frequent stock and option traders who want the lowest commissions.

For readers that are still wondering in which company to open an account, TD Ameritrade will be our recommendation for "buy and hold", long-term investors, beginners, mutual funds investors, and IRA accounts. Ally Invest would work great for all other customers, especially for active stock and options traders.

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 their money.