Overview
E*Trade and TD Ameritrade have very similar pricing schedules with zero commissions on equity trades. So where
should you open an account? This article will help you make an informed decision.
Cost
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
TD Ameritrade
|
$0
|
$49.99
|
$0 + $0.65 per contract
|
$0
|
$0
|
|
Etrade
|
$0
|
$19.95
|
$0 + $0.65 per contract
|
$0
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
TD Ameritrade
|
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Etrade
|
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Promotions
TD Ameritrade: Trade stocks and ETFs for free + get up to $600 bonus.
Etrade:
Get $2,500 cash bonus when you open an account with $1 million.
Up First: Securities Offering
TD Ameritrade customers have the following investment to choose from: stocks, bonds, options, closed-end funds, ETFs, mutual funds, forex, IPOs, and futures contracts. The last category includes bitcoin. Stocks include penny and OTC offerings.
E*Trade offers the same selection of investments except for forex. And it doesn’t yet offer cryptocurrencies, but probably will eventually.
TD Ameritrade is our winner here.
Next, We’ll Take a Look at Mobile Platforms
E*Trade customers get to use two mobile apps, although most of the features are redundant. Options, futures, futures options, and mutual funds can be traded in addition to the traditional lineup of stocks and ETFs. Charting is offered with tools in horizontal mode, and Bloomberg TV makes an appearance free of charge. And we shouldn’t fail to mention check deposit and bill pay, also at no cost.
Moving to TD Ameritrade, we get three apps, and there is a greater difference between the basic model and the other two, which are designed to be trading apps. The last two come with powerful charting (400 technical studies) and forex and futures trading. One of them can trade options on futures. Video news is free of charge from CNBC. The basic app has mobile check deposit (but not bill pay). For some reason, Level II quotes are on the basic app rather than the trading apps.
TD Ameritrade has a slight edge here.
Third is Website Trading
During our testing of TD Ameritrade’s website, we found tons of tools and materials; but yet the site was easy to navigate. Its best highlight is a trade bar called SnapTicket. Sitting at the bottom of the screen, it offers streaming data points on stocks, ETFs, closed-end funds, and options. The tool is able to submit orders (not all trade bars can); and we especially liked the small chart that’s incorporated into the bar when it’s expanded.
A chart can be detached and displayed full screen. Convenient buy and sell buttons (color coded green and red) appear in the upper left of the window. There are several chart styles and indicators. Trendlines are also available, but there are no other drawing tools.
At E*Trade, there is no trade bar. Nevertheless, simple web pages do a good job of presenting order forms for stocks, ETFs, closed-end funds, and options. Futures must be traded on a browser platform, something that TD Ameritrade doesn’t offer.
Called Power, the platform is where futures and futures options are traded. Charting is on a high level, with many technical studies and full-screen mode. The trading ticket is also very advanced with many duration choices and order types.
We have our first tie.
Fourth is Desktop Trading
In addition to Power, E*Trade has a desktop program named Pro. It does require a $1,000 account minimum and a
subscription to real-time data to use.
The software has many more features than its browser cousin. For example, we found direct-access routing and
Level II numbers. We counted around 120 technical studies, 20 drawing tools, and 6 graph styles on its graphing
program. The timeframe goes back to 1972, and the shortest interval is 1 minute.
TD Ameritrade’s desktop platform thinkorswim has no account minimums. Like Pro, it offers Level II quotes and direct access to market venues. It also offers video news (from Bloomberg rather than CNBC). thinkorswim provides more technical studies; we counted around 400. The software’s timeframe goes back to 1982, and the shortest interval is tick-by-tick. Unlike Pro, thinkorswim has a demo login for extra practice.
E*Trade loses here.
Fifth is Funds
With TD Ameritrade’s mutual fund screener, we counted 10,991 securities open for new purchases. By contrast, E*Trade currently offers 8,606 funds. Both screeners are easy to use. Both brokerage firms also provide lists of pre-screened funds that are expected to outperform their peers.
As for ETFs, both brokers once again give their customers lists of funds selected by professional money managers. We do like TD Ameritrade’s ETF center better due to a larger amount of resources, including free fund commentary from Morningstar.
TD Ameritrade takes another victory.
Sixth is Education & Research
Neither company in this examination has forgotten about the need for financial research. The TD Ameritrade website has an “Education” tab in the top menu, and we found many good resources there. Webcasts and in-person events are available on topics such as technical analysis and options trading. TD Ameritrade Network is the broker’s TV channel. For ExxonMobil, we found 8 stock reports.
On the E*Trade site, there is “Knowledge” section that offers articles, webinars, and videos on a variety of topics. For example, a webinar discusses how to trade on Power, while an article goes over the basics of margin. The selection seemed smaller to us than TD Ameritrade’s. As for stock reports, E*Trade provides 10 reports on ExxonMobil.
Overall, we think TD Ameritrade is the better choice here.
Seventh is Options
Option contracts can be traded on any of E*Trade’s platforms. Each one includes pre-defined strategies such as butterfly and iron condor. It’s also possible to create a custom strategy, up to 4 legs. One feature we really like on Power and the website is profit-loss diagrams.
TD Ameritrade customers can buy and sell options on the website using SnapTicket or on the mobile apps or on thinkorswim. One advantage that TD Ameritrade offers here is direct-access routing. However, we didn’t find any profit-loss diagrams at TD Ameritrade. We also felt that E*Trade’s option tools were more user-friendly.
First success for E*Trade.
Eighth is Futures
E*Trade customers can trade futures contracts on the Power platform. They cannot be traded on Pro. During our testing, we found the trade ticket easy to use. Besides market and limit orders, there are stop and stop limit varieties. Options on futures can also be traded; and Power offers chains for them.
Over on thinkorswim, we found multiple dealing boxes. It’s possible to enter a different ticker symbol in each box and analyze multiple contracts side-by-side. TD Ameritrade’s software incorporates trailing orders, which aren’t available on Power.
E*Trade charges $1.50 per contract per side, while TD Ameritrade is at $2.25.
Taken as a whole, we have a draw in this category.
Finally, Other Services
Both companies in this assessment provide DRIP service, Individual Retirement Accounts, and automatic deposits into mutual funds.
E*Trade and TD Ameritrade are tied here too.
Our Recommendations
Mutual Fund Traders: We have to recommend TD Ameritrade for its
longer list of funds.
Beginners: TD Ameritrade again. It has more branch locations, and we like its educational section better than E*Trade’s. While thinkorswim is not ideal for new traders, SnapTicket and the website are easy to use.
Retirement Savers: E*Trade has some annoying $25 IRA fees; so we have to suggest TD Ameritrade.
Trading Tools: With a skill for Amazon Echo, TD Ameritrade is our pick. E*Trade doesn’t have one.
ETF and Stock Trading: Pretty even here.
Promotions
TD Ameritrade: Trade stocks and ETFs for free + get up to $600 bonus.
Etrade:
Get $2,500 cash bonus when you open an account with $1 million.
E*Trade vs TD Ameritrade Results
TD Ameritrade won most categories, but E*Trade would be a good choice for option traders.
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