Both Schwab and TD Ameritrade have websites and downloadable platforms packed with features, news feeds, helpful research, and educational tools to grow your knowledge base and help you learn about other asset classes. Both were ranked in our top 5; TD Ameritrade's slightly higher costs structure generated fewer points than Schwab's.
On November 25, 2019, Charles Schwab announced a buyout of TD Ameritrade’s online brokerage. The transaction itself is expected to close in the second half of 2020, and in the meantime, the two firms will operate autonomously. Schwab expects the merger of its platforms and services to take place within three years of the close of the deal.
In our 2019 Best Online Brokers Awards, Charles Schwab received awards for Best Overall Online Brokers, Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Options Trading, Best for Penny Stocks, Best for Roth IRAs, Best for IRAs, Best for International Trading, and Best Web Trading Platforms.
TD Ameritrade received awards for Best Overall Online Brokers, Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Options Trading, Best for Roth IRAs, Best for IRAs, Best for Day Trading, and Best Web Trading Platforms.
- Account Minimum: $0
- Fees: Free stock, ETF and options trading commissions in the U.S., as of October 7th, 2019. $0.65 per options contract.
- Account Minimum: $0
- Fees: Free stock, ETF, and per-leg options trading commissions in the U.S., as of October 3rd, 2019. $0.65 per options contract.
Choosing between these two comes down to personal preference, and perhaps the geographic availability of one of their offices. Very active derivatives traders may prefer TD Ameritrade's thinkorswim platform, while fundamental-minded stock and ETF traders will appreciate Charles Schwab's proprietary equity ratings and research.
TD Ameritrade lets you open an account for free. Schwab lets you open an account without funding it also, but there's a catch: clients must also open a free, no minimum High Yield Investor Checking account linked to the Schwab One brokerage account. Without the link, there is a $100 minimum with a $100/month direct deposit or $1,000 minimum for the Schwab One brokerage account.
Schwab has several platforms that you can launch after logging on to their flagship website, or you can download the StreetSmart Edge platform to your desktop, or run it from the cloud. StreetSmart Edge is Schwab’s advanced platform which features streaming real-time data and news along with a customizable charting toolkit. All of the platforms have the All In One Trade Ticket available, which lets you build an order using the asset class you choose in a flexible and intuitive way. Quotes update in real time. Schwab monitors its execution quality statistics, and the reports provided to clients after every trade include how much price improvement was achieved.
TD Ameritrade customers can choose from several platforms, from their standard "green site" on the web to their platform for frequent options traders, called thinkorswim. The downloadable thinkorswim platform is extremely customizable, allowing the client to define color schemes, layouts, and trading defaults. Over the last year or so, the standard website has added numerous customization options, including the Dock tool, which is a customizable dashboard. Trade tickets are ubiquitous on all platforms, so you can enter an order no matter where you are. TD Ameritrade’s order routing algorithms seek out price improvement, which can offset the cost of placing a trade. You’ll find streaming real-time data on all platforms.
- Several platforms from which to choose that offer streaming quotes and news
- All-in-One Trade Ticket lets you build an order using any asset class
- Trade execution reports include price improvement achieved on the order
- Streaming real-time data on all platforms
- Customization options abound on thinkorswim, and the dock on the standard website can also be customized
- The smart order router seeks out price improvement.
Mobile and Emerging Tech
Schwab clients' trading customizations and watchlists are stored in the cloud, providing the same setup no matter which platform is in use. Streaming video and almost all of the education resources can be accessed via mobile device as well. Options analysis and trading tools are built into the StreetSmart mobile apps.
TD Ameritrade has two mobile apps. The TD Ameritrade Mobile App is simple and mirrors most of the capabilities of the website. TD Ameritrade Mobile Trader is the mobile companion to the thinkorswim platform, letting you sync your watchlists, charts, and market scans between your desktop and your smartphone. Mobile Trader also gives you the tools to analyze and place complex options orders. You can watch streaming video produced by the TD Ameritrade Network on your mobile device as well. There are ways to connect with TD Ameritrade on Facebook Messenger, Twitter and WeChat.
- Customization choices stored in the cloud and persist across platforms
- Streaming video and education offerings available on mobile devices
- Complex options analysis and trading possible on StreetSmart app
- Streaming data on all mobile apps and websites
- Connect with TD Ameritrade's services on Facebook Messenger, Twitter, and WeChat
- Analyze and trade complex options strategies on TD Ameritrade Mobile Trade
News and Research
Schwab offers extensive equities research from a variety of sources including Credit Suisse, Morningstar, MarketEdge, Reuters and CFRA are available. For real-time news, you can pick up articles from the Associated Press, Globe Newswire, MT Newswires, Business Wire, and many others. Schwab’s proprietary rating system generates grades for over 3,000 companies. The Idea Hub on StreetSmart gives you several ways to seek out options trading ideas and links to deeper analysis that you can do before firing off the trade. Charts on the StreetSmart platforms use streaming real-time data, and you can place a trade from a chart if you’d like.
The thinkorswim platform lets you scan for trading opportunities using real-time data for equities and options, and place trades from charts. The TD Ameritrade website has multiple screeners, including an excellent bond screener and bond ladder builder. The news feeds can be filtered according to your portfolios and watchlists or by sector.
- A wide range of equities research and news available
- StreetSmart's Idea Hub helps sort for options trading ideas
- Charts on StreetSmart platforms use streaming real-time data
- Customizable charting on thinkorswim platform using real-time data
- Multiple screeners available on the website for stocks, ETFs, mutual funds, and fixed income
- News feeds and video content can be filtered by sector or by the contents of your watchlists
Education and Security
A recently launched initiative has led to Schwab Live Daily, which provides 4-7 hours of video content every trading day. Most of it can be viewed via a Webex broadcast, and it’s open to clients and non-clients as well. Schwab also offers its Choiceology podcasts, which include information about behavioral economics and how to make better decisions. The firm publishes a magazine, “On Investing,” four times per year. The Schwab Learning Center covers a wide and deep range of educational content that focuses on different skill levels. Trading Paths are a series of bite-sized lessons that combine articles, videos, and worksheets to help clients understand different investing-related topics in depth. Schwab's security guarantee covers 100% of any losses in any Schwab accounts due to unauthorized activity.
TD Ameritrade has made education a major focus, bringing it onto their trading platform and expanding the amount and depth of their content. They have produced hundreds of 2-minute videos that can be found all over the Internet. The TD Ameritrade Network produces original video content every trading day. Logging in from an unfamiliar device will prompt challenge questions and additional authentication.
- Schwab Live Daily provides 4-7 hours of video content every trading day
- The Schwab Learning Center covers a wide and deep range of educational content
- Schwab's security guarantee covers 100% of any losses in any Schwab accounts due to unauthorized activity.
- The TD Ameritrade Network streams original video content throughout the trading day
- Hundreds of short videos on a wide array of investing topics
- Logging in from an unfamiliar device generates challenge questions, plus TD Ameritrade offers a security guarantee
Schwab eliminated its base commissions for stock and ETF transactions as well as its per-leg fee for options trades. Commissions are also eliminated for OTCBB (penny stock) transactions, which is a differentiator. Options trades are now $0.65 per contract, which is a large price cut for smaller multi-leg trades. Their margin rates are average, though lower than TD Ameritrade and E*TRADE.
Previously the most expensive of the major online brokers, TD Ameritrade eliminated base trading commissions on equities, ETFs, and options for U.S.-based customers. Though they have cut trading commissions, their margin interest rates remain on the high end of the scale.
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In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
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