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 cost structure generated fewer points than Schwab's.

Important

On November 25, 2019, Charles Schwab announced a buyout of TD Ameritrade’s online brokerage. Schwab expects the merger of its platforms and services to take place within three years of the close of the deal.

Charles Schwab, both the man and the full-service brokerage that bears his name, had an extremely busy 2019. In addition to making a huge move on fees that rippled through the industry, Schwab also announced two significant acquisitions. In October, Schwab cut its equity and ETF commissions to $0 in conjunction with the publication of its eponymous founder’s book, “Invested.” Schwab acquired USAA’s Investment Management Co. in July, but that takeover was overshadowed by the planned acquisition of competitor TD Ameritrade, which was announced in November. Schwab was rated one of our best brokers for ETFs and ETF screeners.

TD Ameritrade remains one of the largest online brokers and it has continued to build on its edge with beginner investors. TD Ameritrade reaches customers and prospects with on-ramps to its services constructed on a variety of social media sites, including Twitter and Facebook. Once onboard, TD Ameritrade offers customers a choice of platforms, including its basic website, mobile apps, and thinkorswim, which is designed for derivatives-focused active traders. Although Charles Schwab announced that it was acquiring TD Ameritrade at the end of Nov. 2019, the merger of the two brokerage behemoths is expected to take several years to complete. In the meantime, TD Ameritrade is functioning as a separate entity. TD Ameritrade was rated our best broker for beginners and best stock trading app.

  • Account Minimum: $0
  • Fees: Free stock, ETF trading, $0.65 per options contract
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  • 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.
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Usability

Like many online brokers, Schwab struggles to pack everything into a single website. Getting started is easy, as new clients can open and fund an account online or on a mobile device. However, the website’s navigation involves two-level menus that are lengthy with dozens of choices, and occasionally cause confusion. Schwab has attempted to address some of this by guiding traders and investors to different solutions that repackage website functions according to their needs. Trade Source is meant for more buy-and-hold investing, with all the relevant charts and research displayed in a clean interface. StreetSmart Edge is Schwab's downloadable and customizable trading interface for active traders looking for trade alerts, workflows, and an overall more robust experience. StreetSmart Edge can also be launched from the cloud but it requires installing a third-party application, Citrix, the first time it's run on a particular device. Although StreetSmart Edge is easier to navigate and has streaming real-time data, it is missing some of the screeners available on the website. 

Navigation on Schwab's mobile app is very similar to the website. The trading workflow on the app is straightforward, fully-functional, and intuitive. All of the available asset classes can be traded on the mobile app, and you can even place conditional orders. Your watchlists are the same across all Schwab platforms unless you are using the downloadable version of StreetSmart Edge and choose to save the watchlist on your local device. 

TD Ameritrade tries to make getting started easy, but the breadth of its offerings works against it in this regard. New customers can open and fund an account on the website or mobile apps. The tricky part, however, is choosing the correct account type as TD Ameritrade has a lot to choose from. Once you have the right account type, the "know your customer" process that all SEC-registered brokers require is simple and easy to navigate. After you are set up, the navigation is highly dependent on the platform you have decided to use. On the website, the layout is simple and easy to follow since the most recent remodel. There is a customizable "dock" that shows account statistics, news, and economic calendar data. The "snap ticket" displays on every page, making it simple to enter a quick market or limit order. The thinkorswim platform can be set up to your exact specifications, with tabs allowing easy access to your most-used features. Customization options on the website are limited, while on thinkorswim, you can specify everything from the tools on each page to the font used to the background color. 

TD Ameritrade has native mobile apps for iOS and Android as well as a mobile web experience that resizes the screen according to the device you're using. If you set up a watchlist on one platform, it will be accessible elsewhere. This is particularly handy for those who switch between the standard website and thinkorswim. All available asset classes can be traded on mobile devices.

Trade Experience

Desktop Experience

Much of Schwab's trading experience is built around the All-In-One Trade Ticket, which works across platforms. Futures traders are welcome at Schwab, but that whole function is cordoned off under StreetSmartCentral rather than as part of the trade ticket system. Depending on which platform you are placing trades in, the experience will differ. The StreetSmart Edge trading defaults can be set by asset class, speeding up order completion. By comparison, there are fewer customization options on the website. In Trade Source, you’ll find a wide selection of user-defined alerts. If a stock you are watching drops below a specific threshold or crosses its 15-day moving average (MA), for example, you can quickly jump to the tab and enter an order.  

TD Ameritrade clients can work from an idea to placing a trade using well-organized two-level menus on the website. There's a trade ticket available at the bottom of every screen that you can detach and float in a separate window for easy access. Charts can also be detached and floated to set up a trading environment, but this is a more involved process compared to what is available through thinkorswim. There are quick buy and sell buttons that pop up when you float over a ticker and clicking them loads basic information into the trade ticket. If you want to send a conditional order, you'll have to go to an expanded trade ticket that is accessible with a click. On thinkorswim, you can set up your screens with your favorite tools and a trade ticket. On the web, you can customize the order type (market, limit, etc.), order quantity, order side (buy or sell), and tax-lot methodology. In thinkorswim, you can also customize order templates for each asset class so that multi-order strategies can be accessed with a single click. You can stage orders for later entry on all platforms.

Mobile Experience

Navigation on Schwab's mobile app is very similar to the website. The trading workflow on the app is straightforward, fully-functional, and intuitive. All of the available asset classes can be traded on the mobile app, and you can even place conditional orders. Your watchlists are the same across all Schwab platforms unless you are using the downloadable version of StreetSmart Edge and choose to save the watchlist on your local device. 

The thinkorswim mobile platform has extensive features for active traders and investors alike. The workflow for options, stocks, and futures is intuitive and powerful. You'll find lots of bells and whistles that make the mobile app a complete solution for most trading purposes, including streaming real-time data and the ability to trade from charts. The regular mobile platform is almost identical in features to the website, so it's an easy transition.

Range of Offerings

Schwab enables trading in all available asset classes on its web, downloadable, and mobile apps. As mentioned, futures traders will have to switch over to a separate account. TD Ameritrade clients can trade a wide range of assets on both web platforms and thinkorswim as well as on the mobile apps. Neither broker enables cryptocurrency trading but you can trade Bitcoin futures.

Order Types

Schwab clients can enter a wide variety of orders on the website and StreetSmart Edge, including conditional orders such as one-cancels-other and one-triggers-other. Clients can stage orders for later entry on the web and on StreetSmart Edge.

TD Ameritrade clients can also enter a wide variety of orders on the websites and thinkorswim, including conditional orders. There are no restrictions on order types on mobile platforms. Clients can stage orders for later entry on all platforms.

Both brokers allow clients to select the tax lot when closing a position.

Trading Technology

Charles Schwab utilizes a proprietary wheel-based router for order management purposes, such as handling exchange outages, performing real-time execution quality reviews and handling volatile markets. Most orders in stocks and multiple-exchange listed options are routed to third-party wholesalers, balancing execution quality in terms of increased price improvement and improved execution quality statistics with its own cost savings. This score could be higher if Schwab had responded to our queries as written, but some of the responses were impossible to interpret. Quarterly information regarding execution quality is published on Schwab's website. There is no trading simulator available to Schwab clients, nor is there the capability to automate and backtest a trading system.

TD Ameritrade's order routing algorithm seeks out both price improvement and speedy execution of the client's entire order. Price improvement statistics that the firm publishes show that most marketable equity orders receive, on average, a little more than 1½ cents per share ($0.015) in price improvement. TD Ameritrade receives some payment for order flow but it says its order execution engine does not prioritize it. It received, on average, $0.0012 per share in payment for order flow in the third quarter of 2019. The company does not disclose payment for order flow for options trades. Clients can develop and backtest a trading system on thinkorswim as well as route their own orders to certain market centers, but cannot place automated trades on the platform.

Costs

Schwab kicked off the race to zero fees by major online brokers in early October 2019, and TD Ameritrade joined in quickly. Neither Schwab nor TD Ameritrade charge commissions for online equity, ETF or per-leg on options trades. Per-contract commissions are $0.65 at both. Mutual fund commission for funds outside the No Transaction Fee program is $49.95 at Schwab and $49.99 at TD Ameritrade. Margin interest rates at both are higher than industry average. At Schwab, international trades incur a wide range of fees, depending on the market. 

Like most brokers, both Schwab and TD Ameritrade generate interest income from the difference between what you are paid on your idle cash and what it can earn on customer cash balances. Interest paid is very low at both brokers. Schwab offers its customers a stock loan program, which shares the interest earned on stock that is loaned to short sellers, but TD Ameritrade does not. Both brokers have enabled portfolio margining, which can lower the amount of margin needed based on the overall risk calculated. Typically, portfolio margining works best for customers who trade derivatives that offset the risk inherent in their equity positions. 

Research Amenities

Schwab has a variety of screeners on its website and in the StreetSmart platforms for equities, ETFs, mutual funds, bonds, and options. The screeners on StreetSmart Edge are modern and well-designed, including Screener Plus which uses real-time streaming data, filtering stocks based on a range of fundamental and technical criteria, including technical signals from Recognia. Screeners on the website are old-fashioned, though. Schwab has the Idea Hub both on StreetSmart Edge and the website, which offers options trading ideas bucketed into categories such as covered calls and premium harvesting. Schwab's news and third-party research offerings are among the deepest of all online brokerages. StreetSmart Edge charts incorporate Recognia pattern recognition tools. Charting on the web is serviceable but is best described as basic. Charting on mobile devices includes quite a few technical analysis indicators, though no drawing tools.

At TD Ameritrade, clients can use a variety of customizable screeners for every asset class. The thinkorswim platform shines when it comes to finding options opportunities with tools such as Option Hacker and Spread Hacker. The web platform has a Capital IQ Options Screener to screen for covered calls and calendar spreads. Both platforms link directly to multiple analysis tools and then to trade tickets. TD’s fixed income screener, the Bond Wizard, enables clients to search for individual bonds and CDs or build a bond ladder based on its answers to five questions. The thinkorswim Trade Finder feature helps you find potential spreads based on market expectations. On the web, you'll find CFRA stock research with its Stock Appreciation Research rankings as well as a MarketEdge idea generator and a TradeWise options idea generator. These each spawn a new window though, so it creates a cluttered desktop. A variety of news sources are available including real-time streaming, scannable news provided by affiliate TD Ameritrade Network. Charting on thinkorswim is excellent. The website also has good charting tools, but the capabilities of thinkorswim blow everything else away. 

Portfolio Analysis

Schwab clients can link their non-Schwab accounts (investment and bank accounts, plus credit cards, loans, mortgages, and real estate from over 15,000 financial institutions) to get a full picture of their finances and investments that is automatically updated. You can see the combined total of all included accounts with a chart that makes it easy to track changes over time. The Schwab Portfolio Checkup Tool allowing you to analyze your investments, including those held outside Schwab, and calculate an internal rate of return. Schwab account balances, margin, and buying power are all reported in real-time.

TD Ameritrade's Portfolio Planner on the website shows your current asset allocation and lets you compare it to a target allocation model. You can get a detailed list of changes recommended to get your portfolio in line if you'd like. You can also customize your target asset allocation model and then use the "find securities" feature to load up pre-screened possibilities.

Education

Schwab goes deep on investor education with their Schwab Live Daily broadcasts, research from the Schwab Center for Financial Research, an array of articles on the Insights & Ideas page, as well as webinars and in-person events for investors and traders. There are 4-5 hours a day of live video on Schwab Live, accessible from the web and StreetSmart Edge platforms. The website has numerous video-based classes and other educational content, plus you can sign up for one of their regularly-scheduled webinars on various investing topics. There are archived webinars, sorted by topic, in the Education Center. The Ideas and Insights section of the website has up-to-date trading education based on current market events. 

TD Ameritrade sets a high bar for trading and investing education. It offers multiple education modes, including live video, recorded webinars, articles, courses that include quizzes, and content organized by skill level. Much of the content is also available in Mandarin and Spanish. Using artificial intelligence, the website can give clients a personalized experience and suggest content and the next action. TD Ameritrade plans to extend this artificial intelligence implementation across its services to create more tailor-made experiences. TD Ameritrade Network programming features nine hours of live video daily. The network originally targeted advanced traders, but it has expanded to offer new traders ways to make their first move. You can view TDAN content on native apps for iOS, Android, Amazon Fire, and Roku.

Customer Service

Schwab’s customer service includes a phone line that is staffed 24/7. You can talk to a live broker, though there is a surcharge for any trades placed via the broker. There’s online chat with a human agent built into the web platform. Schwab’s customer service is quick to respond to complaints on Twitter, though most ask the customer to send a direct message with a phone number for an offline discussion. Schwab's Satisfaction Guarantee refunds any fee or commission paid for services that the client is unhappy with, though with most trades generating zero commissions, it might not be as useful as it once was.

TD Ameritrade also has a 24/7 phone support line. You’ll find chatbots deployed on Twitter, Facebook Messenger, Apple Business Chat, and WeChat (in Asia). Live chat support is built into the TD Ameritrade Mobile trader app. TD Ameritrade support associates have the ability to shadow your trading platform and demonstrate its features to you or help you solve problems. The virtual client service agent, Ask Ted, provides automated support by answering client's questions and directing them to content within the site.

Security

Schwab’s website and mobile apps use encryption and risk-based security technology to help defend against unauthorized account access. Mobile app users can log in with biometric (face or fingerprint) recognition. Clients can request two-factor authentication for logins and set up a challenge when accessing accounts from an unfamiliar device. Schwab carries excess Securities Investor Protection Corporation (SIPC) insurance provided by Lloyd's of London of $149,500,000 per account, which includes an aggregate $600 million for uninvested cash. Schwab has dedicated a page of its website to discuss what it does for online security and encourages its customers to do their part too.

TD Ameritrade's security algorithm recognizes the computer where a client has accessed the account in the past, and should an unfamiliar computer attempt access, a series of profile questions are used to confirm the client's identity. Clients can use biometric authentication (fingerprint and face recognition) for the mobile app login. TD Ameritrade provides each client $149.5 million worth of protection for securities and $2 million of protection for cash through supplemental coverage provided by London insurers.  

Our Verdict

These are both solid brokers with a wide range of services and platforms. Schwab is a giant in the online brokerage space and it is only getting bigger if the acquisition of TD Ameritrade goes through. Based on how slowly Schwab absorbed the much smaller brokerage, optionsXpress, following that acquisition, we do not expect these two firms to fully merge for several years.  

One of the biggest changes in both brokers’ businesses is the elimination of some trading fees. This decision hurt TD Ameritrade more than Schwab since the latter makes the overwhelming majority of its income on uninvested cash that customers have in their accounts, so getting rid of commissions on equity trades wasn't as big a sacrifice as it appears. 

Due to its size and reach, Schwab is able to offer investors a wide array of services and tools including a top-notch mobile app. Over the last few years, Schwab seems to be encouraging its customers to work with an advisor, whether human or robo, as opposed to investing by yourself. That said, self-directed traders and investors can still choose to go it alone as the StreetSmart Edge and Trade Source platforms provide all the tools you will need. Unlike some of its direct competition, Schwab even welcomes futures traders even if it does make them play on yet another separate platform. 

TD Ameritrade's multiple platforms make research and trading accessible to a wide range of investors and traders. Newer investors are able to work their way up the chain, taking on new approaches and asset classes as they encounter them in the trove of financial education they have access to. Traders and active investors will enjoy the capabilities of the thinkorswim platform, including the ability to create custom indicators and share asset screens in a wider community.  

Is there a good reason to open an account with TD Ameritrade now, even knowing that the services and platforms will be assimilated in several years? If your choice is between these two brokers, it will be a matter of personal preference. Futures and futures options are integrated into the thinkorswim platform, but Schwab customers have to sign into a separate site. TD Ameritrade is unlikely to make major changes to its technology and services going forward, so if you like the current iteration, you’re set until it all turns from purple to blue around 2024.

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Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.

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.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.