Charles Schwab vs TD Ameritrade

Charles Schwab vs TD Ameritrade


Compare TD Ameritrade versus Charles Schwab - which brokerage firm is better in 2020? IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences comparison.



Comparison Introduction


Charles Schwab and TD Ameritrade now both charge $0 for stock and ETF trades. Other parts of their commission schedules are very similar. So which company is the better value? Let our research provide the answer.


Cost


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
TD Ameritrade $0 $49.99 $0.65 per contract $0 $0
Charles Schwab $0 $49.95 $0.65 per contract $0 $0


Services


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


Promotions


TD Ameritrade: Trade stocks and ETFs for free + get up to $600 bonus.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.



Category 1: Tradable Assets


Schwab offers its clients a lineup of equities, fixed-income securities, funds (mutual, exchange-traded, and closed-end), options, futures contracts, foreign stocks, IPO’s, OTC stocks, and penny stocks. Besides this large selection of investments, Schwab also offers home loans, annuities, and insurance products.

At TD Ameritrade, there is a similar selection: stocks, bonds, funds (closed-end, mutual and exchange-traded), option contracts, IPO’s, futures, over-the-counter stocks, and penny stocks. While TD Ameritrade doesn’t offer home loans, foreign stocks, or insurance products, it does deliver forex trading.

Overall, it’s pretty even in the opening category.


Category 2: Websites


Schwab’s website is easy to navigate thanks to a well-designed top menu that offers many categories and sub-categories. At the bottom of the screen is a trade bar that delivers real-time data on an entered ticker symbol. We found it uncomplicated, and we really liked the pop-up graph with selectable timeframes. What we didn’t like about it was the inability to submit orders from it.


Charles Schwab or Ameritrade


The site’s order form incorporates stop and trailing orders (in addition to market and limit orders), multiple duration choices, and the ability to trade multi-leg option strategies.

Charting on the website offers drawing tools, comparisons, technical studies, multiple chart styles, and company events. One issue we didn’t care for was the inability to display a graph full screen.

A browser platform called StreetSmart Central offers more advanced charting, an all-in-one trade ticket, and the ability to trade options on futures.

TD Ameritrade no longer offers a browser platform. On the broker’s regular website, a graph can be shown the width of the monitor. As with Schwab, there are technical studies, several chart styles, comparisons, and company events. There are fewer drawing tools in TD Ameritrade’s software.


TD Ameritrade or Schwab


Like Schwab, TD Ameritrade’s site has a trade bar. But it has the ability to submit orders, including in different modes. For example, a rapid mode can send orders simply by typing s200fb214.25 to sell 200 shares of Facebook at $214.25 or higher. In basic mode, the tool can be used to trade options.

Both websites offer watchlists, alerts, option chains, customer service tools, cash management features, and similar devices.

Pretty close here, too.


Category 3: Mobile Platforms


Schwab’s app comes with bill pay, mobile check deposit, and funds transfer. It functions on both tablets and phones. Some of the features we liked were heat maps, market movers, and a watchlist. Besides stocks and funds, options can also be traded on it. We did not find the ability to trade futures contracts, which apparently have to be traded on StreetSmart Central.


Schwab vs Ameritrade


TD Ameritrade customers can choose from among 3 mobile platforms. They all have their own unique advantages and can be used on phones and tablets. Two of the apps come with a simulated trading mode, something that’s missing on Schwab’s app. One platform can trade mutual funds, another offers Level II data (also not available on Schwab’s app), while another can be used to trade futures and forex.


TD Ameritrade vs Schwab


TD Ameritrade is the outperformer in this category.


Category 4: Desktop Software


Schwab’s desktop platform is called StreetSmart Edge. It is more powerful than its browser cousin. For example, it offers direct-access routing and Market Depth, a service that’s very similar to Level II quotes. We finally get a demo mode from Schwab on the desktop software. During our testing, we found the charting program easy to use. It has several technical indicators, six graph styles, right-click trading, and company events. A graph can be displayed the width of the monitor.


Ameritrade vs Schwab


On TD Ameritrade’s desktop software thinkorswim, users also get Level II quotes and direct-access routing. Like StreetSmart Edge, the software offers live streaming of CNBC free of charge. Unlike Schwab’s platform, it can be used to trade futures and forex. During our testing, we found more market makers under the direct-access menu on thinkorswim.


Ameritrade vs Schwab


Charting on thinkorswim is also somewhat more sophisticated than on StreetSmart Edge. For example, TD Ameritrade has incorporated four hundred technical indicators, far more than the number we found on Schwab’s platform. The maximum timeframe is 35 years, 15 more years than Schwab delivers.

TD Ameritrade wins another category.


Category 5: Research & Education


If you’re not quite familiar with all aspects of the investment world, both brokerage houses have you covered. On Schwab’s website, we found calculators, articles, and videos on a range of issues. These include retirement preparation, education saving, how to use the broker’s derivative tools, and how to trade preferred stock.

We found Schwab’s security screeners straightforward and uncomplicated. Some of the search variables include Morningstar rating, return history, sector exposure, tax cost ratio, and distribution yield. Stock profiles offer lots of data. We found 7 research reports on Microsoft, for example.

Over at TD Ameritrade, we found 8 research reports on the same company. The broker’s screeners are as easy to use as Schwab’s. Available search criteria include socially responsible funds, price/book ratio, portfolio turnover, and load status. For general learning, TD Ameritrade offers many articles and videos on a wide range of topics.

It’s a dead heat in this category.


Category 6: Other Services


There’s a free DRIP service at both Schwab and TD Ameritrade. Both brokers also have several retirement accounts, including self-employed 401(k)s and multiple IRA types. Neither broker charges any on-going account fees.

For mutual funds, auto investing is available at both investment firms. TD Ameritrade customers must fill out a hard-copy application and buy at least $50 worth of shares.

Looks like another tie.


Recommendations


Mutual Fund Traders: If you plan to mostly trade mutual funds, we recommend TD Ameritrade. Schwab has a smaller list of funds than its rival.

Beginners: If you don’t have a lot of experience trading, we can suggest either firm.

Retirement Savers: For building a nest egg, either broker would be a good call.

Trading Tools: We have to pick TD Ameritrade here.

ETF and Stock Trading: For its software, we once again suggest TD Ameritrade.

Global Trading: Schwab is our pick here as TD Ameritrade simply doesn’t offer very much.


Promotions


TD Ameritrade: Trade stocks and ETFs for free + get up to $600 bonus.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.



TD Ameritrade vs Charles Schwab: Results


Taken as a whole, these two brokers are pretty even. Now with virtually the exact same commission schedule, it’s hard to award one as the overall better value. If you know what investments you plan to trade, you’ll be able to pick the right broker with our research.