Charles Schwab vs TD Ameritrade

Charles Schwab vs TD Ameritrade


Compare TD Ameritrade versus Charles Schwab - which brokerage firm is better in 2023? IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences comparison.


Comparison Introduction


Which brokerage house offers the best trading experience, Schwab or TD Ameritrade? The following article reveals the answer.


Cost Comparison


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Margin
Rate
Maintenance
Fee
Annual IRA
Fee
TD Ameritrade $0 $49.99 ($0 to sell) 13.25% $0 $0
Charles Schwab $0 $49.95 12.075% $0 $0


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
TD Ameritrade
Charles Schwab


Promotions


TD Ameritrade: $0 commissions + transfer fee reimbursement.

Charles Schwab: Get commission-free online stock trades.



Investment Choices


With a self-directed brokerage account at Charles Schwab, it’s possible to trade equities, fixed-income securities, futures contracts, options, ETF’s, closed-end funds, mutual funds, and annuities. TD Ameritrade has the same list but adds forex to the bunch.

Both firms also provide access to the over-the-counter marketplace, which of course carries a high degree of risk and reward. The one real difference between the two brokers here is in the realm of foreign stocks: Schwab offers global trading, whereas TD Ameritrade does not.

Moving on to managed accounts, both Schwab and TD Ameritrade have something to offer. The latter broker delivers traditionally-managed packages that start at 75 basis points per year with a $25,000 account minimum. This service trades funds only.

TD Ameritrade has discontinued its robo package, but Schwab has one. It starts at 0.00% per year with a $5,000 minimum. A hybrid system costs $30 per month but comes with one-on-one financial planning from a human being. Old-school packages are also available through Schwab.

Winner: Schwab


Websites


To trade and research available investment vehicles, both Schwab and TD Ameritrade have excellent websites.

On Schwab’s site, we found a trade bar. The gadget sits at the bottom of the screen and delivers some important trade details, such as volume and bid-ask spread. These are displayed in real-time. The biggest disappointment with the widget is that it can’t submit a trade. Rather, a trade button generates a web page with the broker’s trade ticket.


Charles Schwab or Ameritrade


This has five order types, including limit and trailing stop. Although this number is not overly impressive, there are some other highlights on the ticket, such as instructions on how to enter an order.

TD Ameritrade’s site also has a trade bar. It occupies the same space as Schwab’s. The biggest difference is that TD Ameritrade’s widget can send orders directly to the exchanges, bypassing the need to go to a web page. It also has a rapid-fire mode, a feature that’s missing on Schwab’s trade bar.


TD Ameritrade or Schwab


But trade bars are only part of the picture here. Alerts, watchlists, charting, and ease of navigation are other areas where brokerage websites can be judged. Both Schwab’s and TD Ameritrade’s sites receive grades of A’s in these categories.

The really important area where these two brokers differ is in browser platforms. TD Ameritrade’s site is missing one, while Schwab hits a home run with StreetSmart Central.

This is Schwab’s browser-based (not desktop) trading platform. During our test drive of the software, we found it very useful, especially in the realms of charting and order placement. Graphs have many tools, and the order ticket has advanced trade types, such as contingent on volume and one triggers two.

Winner: TD Ameritrade


Desktop Software


Although TD Ameritrade failed to deliver a browser platform, it most certainly does not disappoint in the desktop category. Its program is called thinkorswim, and it does require a great deal of thinking for the simple fact that it has a steep learning curve.


Ameritrade vs Schwab


Features on thinkorswim that we really like include:

- Level II quotes
- Full-screen charting with hundreds of technical indicators and right-click trading
- Live streaming of both CNBC and TD Ameritrade Network
- Dealing boxes for futures and forex
- Backtesting tool

StreetSmart Edge is Schwab’s desktop software. It is a little more user-friendly than thinkorswim and has a shallower learning curve. Nevertheless, it does manage to deliver a high level of trading power. During our investigation, we especially liked the following:


Ameritrade vs Schwab


- Free access to Recognia and MarketEdge
- Advanced charts with right-click trading (although fewer technical studies than thinkorswim)
- Level II data
- Color-coded profit/loss diagrams (which don’t appear on thinkorswim)

Both programs have practice modes and direct-access routing, and neither one has any account minimums or trading requirements.

Winner: TD Ameritrade


Mobile Apps


Schwab and TD Ameritrade have two apps each. There is a standard mobile app and a trading app (although the standard in each case has some notable trading power on its own).


TD Ameritrade vs Schwab


In defense of TD Ameritrade, we were immediately impressed with both its apps. The standard app has features like mobile check deposit, Level II quotes, horizontal charting, market news, and educational literature. The trading app strangely lacks Level II data but has better charting, a more advanced order ticket, and an economic calendar.

On the Schwab side, we found bill pay, mobile check deposit, and mutual fund trading (this last feature isn’t available on either TD Ameritrade app). But option chains are available only for calls and puts on the regular app. The trading app does have multi-leg strategies (and futures trading). Another highlight on the advanced app is trading suggestions, something not available on TDA’s power app.


Schwab vs Ameritrade


Winner: Pretty even


Margin Accounts


A margin account can be opened at either Schwab or TD Ameritrade.

Schwab’s margin scale is as follows:

$0-$25k — 12.075%
$250,000+ — 10.375% TD Ameritrade is a little pricier:

$0-$10k — 13.25%
$250,000+ — 11.25%

Balances above $500,000 are given negotiated rates by both brokers.

Winner: Schwab


Extra Services


Extended-hours Trading: Schwab and TD Ameritrade have early-bird and late-night trading sessions. Only TD Ameritrade has 24/5 trading in some ETF’s.

Dividend Reinvesting: Both firms provide free DRIP service to their clients.

Individual Retirement Accounts: A large selection of IRA’s is on tap at either broker.

Cash Management Features: Banking tools are available (and quite good) at both Schwab and TD Ameritrade.

Periodic Mutual Fund Investing: Both brokerage houses provide the ability to put mutual fund purchases on autopilot.

Initial Public Offerings: Early access to IPO’s can be had at either firm.

Winner: Draw


Recommendations


Mutual Fund Trading: We counted slightly less than 6,000 mutual funds at Schwab, with less than 4,000 having no transaction fee and no load. TD Ameritrade has 13,000 and 4,400 funds respectively with comparable tools, so we lean towards it.

ETF & Stock Trading: Although this one is close, we endorse TD Ameritrade for 24/5 trading and better extended hours time.

Small Accounts: Either will work.

Beginners: Both brokerage firms have good educational materials on their websites. Although thinkorswim is not user-friendly, it does have a learning section on it.

Long-Term Investors and Retirement Savers: Both brokerage houses deliver personalized financial planning services, branch locations, target-date mutual funds, annuities, self-employed 401k plans, and retirement tools and educational materials on their sites. Take your pick.


Promotions


TD Ameritrade: $0 commissions + transfer fee reimbursement.

Charles Schwab: Get commission-free online stock trades.



TD Ameritrade vs Charles Schwab: Results


TD Ameritrade has a slight lead over Schwab overall.


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.