Interactive Brokers is a leader for active investors who are ready to jump into a platform and stick with it. Their robust proprietary trading software has excellent back-end support. However, learning all the details of their platform's interface can be challenging for novice users. They often have the best prices in the game for frequent traders.
TD Ameritrade has been a pioneer in the online brokerage industry since the 1990s. It provides compelling platforms for traders of all types. Eleven million clients trust TD Ameritrade's wide selection of products, excellent customer support, and their free customizable platforms. Compared to Interactive Brokers, they are somewhat more expensive. However, that money buys Ameritrade's outstanding customer service and access to over 275 branch offices.
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, Interactive Brokers received awards for Best Overall Online Brokers, Best for Low Costs, Best for Options Trading, Best for Penny Stocks, Best for Day Trading, and Best for International Trading.
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: $0.005 per share for the standard platform, $0 for IBKR Lite
- 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.
TD Ameritrade's desktop platform is split into two tiers, and both of them are free for all account holders. Their web-based platform is easy to use, but their My Dock feature also makes it customizable. The firm's advanced thinkorswim software platform is well known for excellent charts, options analysis tools, and trading functions.
Interactive Brokers offers advanced traders the powerful tools of their Trader Workstation. Trader Workstation is less usable for typical retail investors, and the web-based Client Portal is not as well developed. They also have one of the best order execution engines in the business if you are looking for price improvement.
- Powerful tools for traders
- Lightning-fast trade execution
- IB Key technology for more security
- Feature-rich thinkorswim platform
- Easy to use website platform
- Comprehensive options chains and in-depth charting functionality
Mobile and Emerging Tech
The Interactive Brokers mobile app can't compare to the desktop platform's trading functions, but it works well for casual users. The mobile app makes options trades particularly easy. The app also features Interactive Brokers' IBot to help users find advanced orders and tools.
TD Ameritrade offers two mobile apps. The TD Ameritrade Mobile App is for casual investing, and it is similar to the website. The TD Ameritrade Mobile Trader is ideal for active traders, and it acts as a companion to thinkorswim. Both apps offer the basics of trading and banking, but the TD Ameritrade Mobile Trader app adds more than 300 technical charts and indicators. Stocks, options, futures, forex, and price quotes are all available through Ameritrade's Mobile Trader.
- Trade anywhere across PCs, webpages, and mobile apps
- Easy options trading
- Separate mobile apps for typical investors and active traders
- Mobile Trader offers stocks, options, futures, and forex
News and Education
Interactive Brokers offers several useful features that help investors think about risks and decipher options markets. The Probability Lab built into Trader Workstation is one of the best of these research tools. Unfortunately, the tools are difficult to access through the platform because of the Java-based menu drilling needed to find them. In the education department, Interactive Brokers offer Traders' University and Traders' Academy. They have video and interactive courses on subjects including options, forex, and technical analysis.
TD Ameritrade's tools for options and technical analysis through the thinkorswim software platform are excellent. Traders can choose from different types of charting applications, look at hundreds of technical studies, and save their favorite layouts. Ameritrade offers paper trading and sophisticated options analysis tools. The tools are complemented by a full range of educational resources and support services.
Interactive Brokers provides quality educational material for more advanced traders, but it is weaker for novice users. New traders will find TD Ameritrade’s educational courses and lessons very helpful. Videos, articles, quizzes, and exercises from both Investools and thinkorswim cover investing topics at all levels in great depth.
- Educational resources available to members through Traders' Academy and Traders' University
- Educational materials are useful for advanced traders with an international focus
- A broad range of educational information for investors at all levels
- A wide array of technical analysis studies and charting applications
With Interactive Brokers, U.S. stock trades are only half a cent (or $0.005) per share. The spread cost for EUR/USD spot at Interactive Brokers was .8 pips, close to the industry average. IBKR Lite clients pay no commission on U.S.-based equities, but they are restricted to the web-based Client Portal and IB's mobile apps. The usual commission schedule applies to all other trades. IB has not charged a base fee for options contracts; infrequent traders will pay $0.70 per contract.
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.
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.