TD Ameritrade vs Vanguard


Compare Vanguard versus TD Ameritrade - which firm is better in 2022? IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences comparison.


Overview of TD Ameritrade and Vanguard


While Vanguard is mostly known for its fund lineup, and TD Ameritrade is mostly known for its software, both brokerage firms offer much more. Take a look at this comparison:


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) 11% $0 $0
Vanguard $0 $20 10% $20* $20*


Services


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


Open Account


TD Ameritrade: $0 commissions + transfer fee reimbursement.

Vanguard: Open a Vanguard investment account.



Tradable Assets


Besides mutual funds and ETFs, Vanguard customers also can trade:

- Bonds and cash equivalents
- Stocks
- Closed-end funds
- Option contracts

TD Ameritrade delivers every asset class that Vanguard does and then adds futures contracts and forex.

Winner: TD Ameritrade


Mutual Funds and ETFs


If you’re planning on opening an account at Vanguard for its mutual funds and ETFs, you may want to reconsider.


Vanguard or Ameritrade


Using TD Ameritrade’s mutual fund screener, we found 10,376 funds. Of these, 3,823 have neither load nor transaction fee. Using Vanguard’s screener, we found 6,549 mutual funds open to new investors; 3,418 have no transaction fee, although some of them have a load.

TD Ameritrade offers 128 Vanguard mutual funds. Every one of them has a transaction fee. Vanguard of course charges no transaction fee on its funds.

Needless to say, both brokers offer every U.S.-listed ETF, but resources vary considerably. TD Ameritrade’s ETF profiles provide free reports from CFRA, TheStreet.com, MarketEdge, and New Constructs. Star ratings are also available from Morningstar.

On Vanguard’s ETF profiles, we did not find any reports at all. Vanguard’s profiles do have news articles and price performance. For SPY, we found a trade recommendation from one analyst.

TD Ameritrade’s profiles have much more information on them, including top 10 holdings, sector breakdown, and valuation metrics.

Winner: TD Ameritrade


Stock Research


If you’d rather trade stocks than funds, both firms offer multiple research tools. The TD Ameritrade website has multiple predefined stock screens. If you want to run your own screen, the DIY screener offers many search variables. For example:

- Sector
- EPS Growth
- Price to cash flow
- MACD Histogram

Stock profiles come with many useful data points, including news articles, SEC filings, and peer comparisons. An Analyst Reports tab displays trade recommendations and price targets in graphical format, and this allows for quick views. We found 6 downloadable reports for Alcoa.


TD Ameritrade or Vanguard


Over at Vanguard, we found 2 downloadable reports for Alcoa (from MarketGrader and Argus). Other helpful information on stock profiles includes a list of related companies, price history, and financial statements.

For Alcoa, TD Ameritrade’s news articles were more recent than Vanguard’s.

Winner: TD Ameritrade


Websites


Once you’ve found the specific asset you want to trade, it’s time to submit an order. Both brokerage firms in this bout have user-friendly websites to accomplish the task.

TD Ameritrade’s site has a trade bar. Called SnapTicket, it sits at the bottom of the screen. It can submit orders for stocks and ETFs. Order types include trailing and stop. A small graph appears on the trade bar, which also has a rapid order mode.

If you need more complex orders, like OCA (order cancels another) or bracket orders, you can use the regular trading ticket that is available on a web page.

If you want to look at price action, the TDA website has full-screen charts with technical indicators, trendlines, and company events. There are 5 graph styles.

Vanguard’s website is much more plain than TD Ameritrade’s, although this simplicity doesn’t mean it’s easier to navigate. There is no trade bar on the Vanguard site, and in fact, there is no trade button. There is a link on a stock’s profile that says Trade this stock. You’ll need to click on this link to get the order form.


Vanguard vs Ameritrade


Trade types at Vanguard include stop and stop limit; there are no trailing types. Charts have 4 display styles and a handful of technical studies. A chart cannot be displayed the full width of the computer monitor, and there are no drawing tools of any kind.

Winner: TD Ameritrade


Desktop Software


If you don’t care for TD Ameritrade’s very well-designed website, you could download and install thinkorswim. This is the company’s desktop software, and it’s completely free to use.

The program has many advanced tools not available on the website. For example, it can submit orders for futures and forex (the website cannot). Furthermore, thinkorswim has professional-level charting not found on the website. During our inspection, we found roughly four hundred technical studies, an amazing number.


TD Ameritrade versus Vanguard


Other notable features on thinkorswim include live streaming business news, another stock screener, direct-access routing, and Level II quotes.

Vanguard has no desktop platform at all.

Winner: TD Ameritrade


Mobile Apps


Although Vanguard forgot about desktop software, it remembered to develop a mobile app. The broker has discontinued its Kindle Fire app, so Apple and Android phones are the two remaining options.

TD Ameritrade’s app functions on iPad. Another advantage over Vanguard is a platform for Apple Watch and iMessage. There are actually 2 versions: a regular app and a thinkorswim app. The latter is trading power on steroids. But don’t forget about the regular version; it has many good resources including watchlists, Level II quotes, and horizontal charting.


Ameritrade or Vanguard


Vanguard’s app has no charting at all, which is a major blunder. Nevertheless, Vanguard funds do have lots of information (non-Vanguard funds have very little). There is a watchlist on the Vanguard app, and a mobile check deposit widget makes depositing checks trouble free.


Vanguard or Ameritrade


Winner: TD Ameritrade


Margin Borrowing


If you don’t have much money on the sidelines to trade with, you could always open a margin account. Available at both firms, this is a great way to increase your trading power. The $64 million question is: How much does it cost?

TD Ameritrade’s margin top tier rate is 11%.

Vanguard’s margin top tier rate is 10%. Neither broker provides margin details like initial or maintenance requirements on its software.

Winner: Vanguard


Miscellaneous Services


IRAs: If you’re trying to save for retirement, Vanguard and TD Ameritrade have IRAs. Vanguard continues to charge fees on some IRA types. TD Ameritrade does not.

Dividend reinvestment program: Both broker-dealers have DRIP services, and they’re really easy to set up.

Automatic mutual fund investing: At TD Ameritrade, you can establish recurring, automatic investments into mutual funds. Vanguard offers this service only for Vanguard funds.

Fractional-share trading: Whole-dollar investing in stocks and ETFs is not available at either broker.

IPO availability: TD Ameritrade clients with sufficient assets or trading history can participate in IPOs before they begin trading. Vanguard only accepts IPO orders on the morning an offering goes live.

Extended hours: TD Ameritrade customers get to trade in pre-market and after-hours sessions. Vanguard only has an after-hours period.

Winner: TD Ameritrade


Now, Our Recommendations


Stock/ETF trading: With thinkorswim and better research materials, TD Ameritrade is an easy pick.

Beginners: We like TD Ameritrade’s educational materials much better. Plus, it has branch locations and better customer service.

Small accounts: Despite adopting $0 commissions for online trades of stocks and ETFs, Vanguard continues to have policies that benefit large accounts. We recommend TD Ameritrade.

Retirement savers and long-term investors: Vanguard has fees on its SIMPLE IRAs and solo 401k plans. So we think TD Ameritrade has a slight edge. We also like TD Ameritrade’s financial planning services better.


Open Account


TD Ameritrade: $0 commissions + transfer fee reimbursement.

Vanguard: Open a Vanguard investment account.



TD Ameritrade vs Vanguard Results


Vanguard just doesn’t have the resources to stand up to TD Ameritrade. Perhaps most surprisingly, it underperforms in the fund category. It does offer good values, though, in investment advice and margin borrowing.




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.