• Account Minimum: $0
  • Fees: $0/stock and ETF trade, $0 plus $1 per contract for options
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  • Account Minimum: $0
  • Fees: Free stock, ETF, and per-leg options trading commissions. $0.65 per options contract.
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Vanguard and TD Ameritrade are among the largest brokerage firms in the U.S.—but the similarities stop there. Vanguard offers an impressive lineup of low-cost mutual funds and exchange-traded funds (ETFs) aimed at buy-and-hold investors and retirement savers. Meanwhile, TD Ameritrade offers several trading platform including regular web platforms, a primary mobile app for regular users, and the professional-level thinkorswim which is available for web, desktop, and mobile. While Vanguard and TD Ameritrade have a few similarities, we'll compare the two to help you determine which broker might be a better fit for your investing needs.

Charles Schwab purchased TD Ameritrade a few years ago. The firms have continued to operate separately, but are working towards completing the merger and the migration of TD Ameritrade accounts to Schwab. This is expected to be completed in mid-2023. The thinkorswim platform will be kept.

Usability

You can open a Vanguard account online, but there is a several-day wait before you can log in. We found it's easier to open and fund an account at TD Ameritrade. You can do so either through its website or mobile app, although it can be challenging to pick the right account type due to the range of offerings. With either broker, you need to sign additional documents—and wait a bit longer—if you want to trade options or access margin.

Vanguard and TD Ameritrade offer a good variety of educational content, including articles, videos, webinars, and a glossary. Vanguard's website has (finally) been updated and is now more user-friendly and modern-looking. However, there's still work to be done to make the website less complicated, and you can't get very far unless you log into your account. TD Ameritrade's website is fresh, well-organized, and easy to navigate.

Overall, we found Vanguard works well for long-term investors—especially those who want access to professional advice and some of the lowest-cost funds in the industry. At the same time, TD Ameritrade is a better fit for investors and traders of all experience levels who want a more robust and customizable trading experience.

Trade Experience

Desktop Experience

Vanguard and TD Ameritrade offer very different trading experiences—but that's to be expected considering the brokers' target customers. Vanguard's platform is geared toward buy-and-hold investors, not active traders. While the platform gets the job done (i.e., you can enter orders), there aren't any bells and whistles. The order entry process is clunky and not particularly intuitive, and there's no real-time data until you open a trade ticket. Overall, the trading platform is adequate for passive investors, but it falls predictably short for traders and investors who want a responsive and customizable experience.

Casual traders will find everything they need on TD Ameritrade's web-based trading platform. More experienced and tech-savvy investors and traders will gravitate toward thinkorswim, TD Ameritrade's flagship platform. Thinkorswim is a fully customizable, modern-looking platform that offers a full suite of analysis tools. There's also a trading simulator that lets you create and test studies using the thinkScript programming language. Overall, TD Ameritrade has a solid lead in terms of features and functionality.

Mobile Trade Experience

Vanguard's mobile app is a bit outdated and light in terms of features. There is no charting, and the quotes are again delayed until you open an order ticket. Still, as a buy-and-hold investor, you can monitor your positions, analyze your portfolio, read the news, and place basic orders—albeit for limited asset classes.

TD Ameritrade supports two mobile apps: the beginner-friendly TD Ameritrade mobile app and the active trader-focused thinkorswim. Both are robust and offer a great deal of functionality, including charting and watchlists. Streaming real-time data is included, and you can trade the same asset classes on mobile as on the other platforms.

According to user ratings on the App Store, both brokers' apps are well-received. Vanguard has 4.7 stars from about 170,000 reviews. TD Ameritrade Mobile has 4.5 stars from over 105,000 reviews, and thinkorswim has a 4.7-star rating from about 272,000 reviews. Overall, we found that TD Ameritrade offers a superior mobile trading experience in terms of features and functionality.

Range of Offerings

Vanguard and TD Ameritrade offer equities, ETFs, bonds, options, and thousands of no-load, no-fee mutual funds. TD Amertirade offers better access to OTC stocks which Vanguard recently discontinued in most cases. Vanguard offers a robo-advisor. TD Ameritrade offered one, but has shut it to new clients ahead of the migration to Charles Schwab. TD Ameritrade also supports trading in futures, futures options, crypto futures, and forex, giving it a wider range of offerings.

Vanguard vs. TD Ameritrade Range of Offerings
Asset Vanguard TD Ameritrade
Short Sales  Yes Yes
No-Load, No-Fee Mutual Funds  160+ (the rest tend to have very low fees) 1,690+
Bonds  Yes Yes
Futures/Commodities  No Yes (futures only)
Futures Options  No Yes
Complex Options  Limited if any 4 legs
Robo Advisory Yes Closed to new clients ahead of migration to Schwab
Cryptocurrency  No Crypto futures only
International Exchanges No Yes
Forex  No Yes
Fractional Shares  Only via dividend reinvestment Only via dividend reinvestment
OTCBB and Penny Stocks No in most cases Yes

Order Types

Predictably, Vanguard supports only the order types that buy-and-hold investors traditionally use, including market, limit, stop, and stop-limit orders. You can select specific tax lots (including partial shares within a lot) to sell, but you can't stage orders for later entry. TD Ameritrade offers a larger selection of order types, including all the usual suspects, plus trailing stops, and conditional orders like OCOs. There are no restrictions on order types on the mobile platform, and you can stage orders for later entry across all platforms.

Trading Technology

Vanguard does not use smart order routing technology, and customers can't route their orders. Still, the broker reports an average net price improvement of $2.31 per 100-share order. We did not find any ready details about Vanguard's execution speed, but keep in mind its target customer is playing the long game (and won't be concerned about nanoseconds). Although its approach to routing is basic compared to many other brokers, it scores points for not accepting payment for order flow.

TD Ameritrade's order routing algorithm looks for fast execution and price improvement. Third-party execution quality statistics show an execution speed of 0.04 seconds and an average net price improvement of $2.09 per 100 shares. Unlike Vanguard, TD Ameritrade does accept payment for order flow: $0.0014 to $0.0025 per equity share and usually $0.51 per options contract. These payment for order flow values are subject to change and fluctuate.

While Vanguard comes out ahead in terms of payment for order flow (by not accepting it), TD Ameritrade is the overall winner in trading technology because of its smart order routing technology.

Costs

Vanguard and TD Ameritrade charge $0 commissions for online stock, ETF, and options trades for U.S.-based customers. TD Ameritrade has a $0.65 per contract option fee; it's $1 at Vanguard. For OTC stocks you'll pay a commission of $6.95 at TD Ameritrade. Vanguard isn't accepting OTC orders anymore in most cases. Mutual fund purchases will cost between $0 and $20 at Vanguard and between $0 and a steep $74.95 at TD Ameritrade. Finally, broker-assisted trades cost $25 at TD Ameritrade and between $0 and $25 at Vanguard, depending on your account balance.

Overall, Vanguard is considerably cheaper if mutual funds are your focus. Alternatively, you might save money at TD Ameritrade if you trade a lot of options. The costs are the same if you are mainly looking at stocks and ETFs, making this category too close to call.

Account and Research Amenities

Vanguard and TD Ameritrade offer screeners for stocks, ETFs, and mutual funds, but only TD Ameritrade has one for options and bonds. TD Ameritrade's screeners are also considerably more robust and customizable. Both brokers also offer various news sources—but here again, TDA comes out ahead in terms of offerings.

Vanguard's charting capabilities are limited, and there's no technical analysis. Conversely, TD Ameritrade offers advanced charting tools that should be more than adequate for most retail investors and traders. Overall, TD Ameritrade offers more versatile account and research amenities. Still, Vanguard scores points for having a dedicated area on its website for socially responsible investing—something TD Ameritrade lacks.

Portfolio Analysis

Vanguard and TDA both provide access to buying power and margin information, plus unrealized and realized gains. You can access tax reports (capital gains) and see your internal rate of return (IRR) too. Overall, the portfolio analysis offerings at the two brokers are too similar to pick a clear winner.

Education

The focus of Vanguard's educational content is to help you set and reach your financial goals. Much of the content is in the form of articles. That said, you'll also find commentary and research papers, videos, and webcasts on investment products, retirement, industry news, financial planning, and the economy.

TD Ameritrade offers articles, videos, webinars, and live programing on the TD Ameritrade Network. A range of immersive courses covers basic investing and trading ideas, plus a few advanced topics. Overall, TD Ameritrade comes out ahead due to its breadth of topics and beginner-friendly content.

Customer Service

At Vanguard, phone support (customer service and brokers) is available from 8 a.m. to 8 p.m. (Eastern) Monday through Friday. Live chat isn't supported, but you can send a secure message via the website. Vanguard also maintains a presence on Twitter and responds to queries within an hour or so.

TD Ameritrade offers 24/7 phone support and chatbots on Twitter, Facebook Messenger, Apple Business Chat, and WeChat (in Asia). Live chat is supported on its app too. Overall, TD Ameritrade's customer service is more flexible with higher availability. You can count on reliable help from either broker, but TD Ameritrade has a clear edge when it comes to customer service.

Security

Vanguard and TD Ameritrade's security is up to industry standards. You can log into either broker's app with biometric (face or fingerprint) recognition, and both brokers protect against account losses due to unauthorized or fraudulent activity.

Both brokerages are covered by SIPC which provides up to $500,000 in protection should a firm fail or go bankrupt. There is a $250,000 limit on cash. Additionally, both carry insurance to provide coverage beyond SIPC's limits. Vanguard did not post the details of their coverage, but carries it. TD Ameritrade's customers are covered with $149.5 million worth of protection for securities and $2 million of protection for cash.

Through Sept. 2021, neither brokerage had any significant data breaches reported by the Identity Theft Research Center. Overall, investors can be confident in the security standards of either broker.

Our Verdict

In our 2021 Best Online Brokers reviews, TD Ameritrade earned higher scores than Vanguard in every category we ranked. To be fair, it isn't easy to compare two brokers that have such distinct business models and target customers. Vanguard is a niche player built exclusively with buy-and-hold investors in mind, similar to how some brokerages have zeroed in on options traders. TD Ameritrade is a generalist aiming to serve new investors all the way to advanced traders on its thinkorswim platform. 

Overall, however, buy-and-hold investors who value simplicity over bells and whistles and want access to some of the best (and lowest cost) funds in the business may still prefer Vanguard as the limitations of the platform won’t take away from their main purpose of creating a low-cost, diversified portfolio. In fact, if we scored a category for passive, buy and hold investors, Vanguard would likely take it just on the value they deliver through their funds. TD Ameritrade, of course, can do all things Vanguard can do—and much more. Overall, TD Ameritrade is the better choice whether you're a beginner who wants a broad range of educational content or an active trader or investor looking for a more robust trading experience.

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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 months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.

Read our full methodology.