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. In 2020, Charles Schwab announced it had acquired TD Ameritrade for $26 billion, a merger that’s expected to be complete in 2023.

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.

  • Account Minimum: $0
  • Fees: Free stock, ETF, and per-leg options trading commissions. $0.65 per options contract.
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  • Account Minimum: $0
  • Fees: $0/stock and ETF trade, $0 plus $1 per contract for options
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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 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.

TD Ameritrade continues to roll out new product enhancements, such as updated charting functionality and a portfolio digest feature. In addition, the company launched more innovative features, such as the Social Sentiment tool which measures social media trends. Vanguard recently redesigned its main menu and support center, all while improving the website's mutual fund purchase flow.

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

Even after a redesign meant to keep Vanguard in tune with the needs of its mobile clients, Vanguard's mobile app remains light in terms of common industry features. Similar to Vanguard's website, quotes for stocks and ETFs on the app show a delayed price until you get to order entry. You cannot access non-Vanguard mutual funds nor options from the app. The mobile app allows you to customize your "My Feed" which displays account information, news, blogs, transaction history, and performance, among other information. 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 111,000 reviews, and thinkorswim has a 4.7-star rating from about 285,000 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.

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 $1.80 per 100 shares. Unlike Vanguard, TD Ameritrade does accept payment for order flow: $0.0014 to $0.0025 per equity share and usually $0.50 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. In terms of margin rates, Vanguard comes in lower than TD Ameritrade, charging 11% on $10,000 and 10% on $100,000. TD Ameritrade charges 12.25% on $10,000 and 10.75% on $100,000.

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.

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 programming 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. 2022, neither brokerage reported any significant data breaches. Overall, investors can be confident in the security standards of either broker.

Account Types

TD Ameritrade and Vanguard both offer the full range of commonly used account types. This includes:

  • Taxable brokerage accounts
  • Traditional, Roth, inherited, SIMPLE, and simplified employee pension (SEP) individual retirement accounts (IRAs)
  • Individual and small plan 401 (k)
  • Corporate accounts
  • Custodial accounts, including Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) accounts
  • 529 college savings accounts
  • Health savings accounts (HSA)
  • Trusts

TD Ameritrade has a few more specialty accounts, such as the investment club account, but these same aims can be achieved with a Vanguard organization account. Overall, this is a tie as both brokers have every account the average investor needs.

Final Verdict

In our 2022 Best Online Brokers review, TD Ameritrade earned higher scores than Vanguard. Interestingly, we saw the gap between the scoring close significantly this year due to a new weighting of the scoring to focus more on the categories that matter to the average investor. 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 solely 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. This year, we revamped the review process by conducting an extensive survey of customers that are actively looking to start trading and investing with an online broker. We then combined this invaluable information with our subject matter expertise to develop the framework for a quantitative ratings model that is at the core of how we compiled our list of the best online broker and trading platform companies.

This model weighs key factors like trading technology, range of offerings, mobile app usability, research amenities, educational content, portfolio analysis features, customer support, costs, account amenities, and overall trading experience according to their importance. Our team of researchers gathered 2425 data points and weighted 66 criteria based on data collected during extensive research for each of the 25 companies we reviewed. 

Many of the brokers we reviewed also gave us live demonstrations of their platforms and services, either at their New York City offices or via video conferencing methods. Live brokerage accounts were also obtained for most of the platforms we reviewed, which our team of expert writers and editors used to perform hands-on testing in order to lend their qualitative point of view. 

Read our full Methodology for reviewing online brokers.