Schwab vs TD Ameritrade Comparison
If you’re considering opening a brokerage account soon, you’ll definitely want to take a look at Schwab and TD Ameritrade. They are very
competitive in most areas, although there are some important differences. Here’s what we learned in our recent research:
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)
|
14.75%
|
$0
|
$0
|
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
13.575%
|
$0
|
$0
|
Services
Website Links
TD Ameritrade: $0 commissions + transfer fee reimbursement.
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
Mutual Funds and ETF’s
TD Ameritrade provides access to many fund families. Schwab does the same while offering its own ETFs and mutual funds. Using
Schwab’s mutual fund screener, we found 63 Schwab funds. The company also manages its own roster of 22 ETF’s.
TD Ameritrade and Schwab offer all U.S. listed ETFs commission-free.
The TD Ameritrade mutual fund screener returns more than 13,000 securities available for purchase. On this list,
there are
over 4,200 with zero load and zero transaction fee. Schwab, by comparison, offers a much smaller
list of 5,845. Nevertheless, there is a large number of no-load and no-transaction-fee products (slightly north of
3,400).
If you buy an NTF mutual fund at TD Ameritrade and sell it in under 180 days, you have to pay a short-term
trade fee (it’s $49.99). Schwab has the same rule, although the numbers are 90 days at $49.95.
Range of Offerings
Both brokerage houses offer a wide variety of investment vehicles. At Schwab, we found stocks, options,
bonds, CD’s, funds (including closed-end funds), annuities, and futures. The firm also has an emphasis on global investing with access to 30 foreign markets. Because Schwab operates its own bank, mortgages are available through the broker as well. We found 529 savings plans, too.
TD Ameritrade clients can buy and sell a lot of the same investments, including closed-end funds and CD’s. In addition to futures, TD Ameritrade also offers currency trading, which Schwab fails to deliver. TD Ameritrade offers 529 college savings and minor accounts, but doesn’t offer as much as Schwab in the global investing category.
Cash Management Tools
The banking features at each firm differ considerably. The biggest difference is that Charles Schwab has its own FDIC-insured bank (TD Ameritrade is an independent company with TD Bank as its largest shareholder).
Schwab brokerage clients who need cash management tools can open a checking account that comes with free checks and a Visa debit card. This is a separate bank account that is linked to the brokerage account. At TD Ameritrade, the company simply adds a Visa debit card and checks to a pre-existing investment account. There is not a second account involved.
Because free cash balances at TD Ameritrade are swept into TD Bank and TD Bank USA, the funds are protected by the FDIC, and the standard $250,000 backstop is doubled. Schwab only provides the normal amount of insurance.
While TD Ameritrade offers ATM fee refunds inside the U.S., Schwab customers get reimbursed for worldwide withdrawals.
In addition to the debit accounts, TD Ameritrade and Charles Schwab both offer credit cards.
TD Ameritrade has a Visa Signature card, while Charles Schwab offers two American Express cards. The
Visa card does not have an annual fee, while one of the American Express cards charges $550 per year.
Software
If you’re not going to take advantage of either broker’s investment advisory services, you’ll want to know what software is available to self-directed accounts. Schwab offers a very user-friendly website with a trade bar at the bottom of the screen. Our biggest complaint is that it doesn’t have the ability to place trades (there’s a link to a trade ticket on a web page).
The order ticket offers an automatic DRIP enrollment. And charting comes with a lot of nice tools. If you prefer a desktop program, Schwab offers StreetSmart Edge platform, where just about everything is more advanced.
TD Ameritrade also provides a desktop program. Called thinkorswim, it offers 400 technical studies, futures and forex trading, direct-access routing, and a host of other fantastic tools.
The broker’s website itself is sufficient for most trading routines. SnapTicket is the broker’s trade bar, and it can submit orders for stocks and ETF’s (bonds and mutual funds have order tickets on the website). TD Ameritrade’s site has charting comparable to Schwab.
Skills for Amazon Echo devices are available through both companies. It’s possible to get market updates, quotes, and watch lists. TD Ameritrade’s skill has trading capability.
Mobile Trading
These two powerhouses haven’t forgotten about mobile devices. Schwab’s app offers Touch ID, a convenience that we really appreciate. The trading ticket offers 4 order types and several timing choices. Mutual funds can be traded on the platform, which isn’t always the case in the brokerage world.
Roughly 20 technical studies are integrated with Schwab’s charting, and a graph can be displayed horizontally. There are 7 chart styles. We like the amount of market news on the app, and this includes live streaming of CNBC.
TD Ameritrade has 3 apps. One can trade mutual funds, while another is designed for stocks,
futures, and currencies. This is the thinkorswim mobile platform, and its charting is fantastic. The order ticket provides direct-access routing and complex order types. One feature we really like about this software is a simulated trading login, which Schwab doesn’t offer.
Customer Service
Customer service is easily forgotten... until you need it. Agents can be reached 24 hours a day, 7 days a week at either company in our survey. The TD Ameritrade site has a robo chat service that is able to answer a lot of questions. For every answer it delivers, a link to a human chat service is included, just in case you didn’t get a decent answer.
If you don’t care for phone or online assistance, you can head over to your nearest TD Ameritrade branch, which
is probably closer than you think. With over 450 locations, the broker has pretty much the entire country covered.
Schwab has 345 brick-and-mortar centers. While this figure is pretty close to what’s available through TD Ameritrade, the Schwab website does not have a digital assistant. This failure is replaced with a human chat service. During a trial of it, we received a wrong answer; so the quality is questionable.
One final note is that both companies offer Chinese language service, which probably is an indication of where the futures of these two lie.
Website Links
TD Ameritrade: $0 commissions + transfer fee reimbursement.
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
Recommendation
If you want the best software, we recommend TD Ameritrade.
thinkorswim is at a professional-level, whereas StreetSmart Edge is designed to be more user-friendly.
If you plan to go the managed route, then we propose Schwab. It has a wider variety of services and lower fees.
For retirement savers and small investors, it’s not possible to suggest one broker over the other. They are both even in these areas.
For mutual fund investors, we recommend TD Ameritrade due to its larger selection and great fund resources.
TD Ameritrade vs Schwab: Results
Although they are even in many areas,
TD Ameritrade has an edge overall.
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Updated on 4/5/2023.
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.
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