Both TD Ameritrade and Vanguard are among the largest brokerage firms, but the resemblance ends there. Vanguard is a reluctant participant in the online brokerage space, preferring to direct its customers toward its mutual funds and exchange-traded funds (ETFs). Vanguard is not interested in frequent traders.
TD Ameritrade is one of the largest online brokers and has several trading platforms. They range from the main website to thinkorswim, which is designed for very active traders. TD Ameritrade offers copious education content, which helps new investors to become more confident and trade additional asset classes as their skills grow. TD Ameritrade allows its customers to trade a wide variety of asset classes, including futures and sophisticated options strategies.
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, Vanguard received an award for Best for ETFs.
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/stock and ETF trade, $0 plus $1 per contract for options
- 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.
Vanguard focuses its considerable energy on helping its high wealth clients plan for retirement and other long-term goals. As such, its trading technology is lacking. There is little of interest to active traders or derivatives traders. There are no streaming quotes; you must manually refresh the screen to get updates. You cannot trade complex options strategies on Vanguard without a live broker.
TD Ameritrade customers have multiple platforms to choose from. The downloadable thinkorswim platform is extremely customizable, allowing the client to define color schemes, layouts, and trading defaults. Even the standard website boasts numerous customization options. The My Dock tool on the website is a customizable dashboard. Trade tickets are available on all platforms so that you can enter an order anywhere. TD Ameritrade also has specialized order routing algorithms that search for better prices. Finally, real-time securities data is streamed to users on all platforms.
- No streaming quotes
- No complex options
- Very simple trading experience with few creature comforts
- Streaming real-time data on all platforms
- Customization options abound on thinkorswim, and My Dock on the standard website can also be customized
- The smart order router seeks out price improvement.
Mobile and Emerging Tech
Vanguard offers mobile apps for iOS, Android, and Kindle Fire devices. The mobile apps are much more modern and easier to use than the website. They now accept mobile check deposits too. Quotes are still delayed, unlike Ameritrade's real-time data. There is still no online chat capability for contacting customer service.
TD Ameritrade boasts two mobile apps. The TD Ameritrade Mobile App is very straightforward and focuses on the same essential functions as the website. TD Ameritrade Mobile Trader is a mobile companion to the thinkorswim platform. It lets you sync your watchlists, charts, and market scans between your desktop and your smartphone. Mobile Trader even provides tools to help you examine and place complex options orders. Streaming video produced from the TD Ameritrade Network is available on mobile devices too. Ameritrade can also be reached on Facebook Messenger, Twitter, and WeChat.
- Very simple app, most useful for checking balances
- Delayed data
- Mobile check deposit available
- Streaming data on all mobile apps and websites
- Connect with TD Ameritrade's services on Facebook Messenger, Twitter, and WeChat
- Analyze and trade sophisticated options strategies on TD Ameritrade Mobile Trader
News and Research
Vanguard offers several screeners, including a stock screener and a separate ETF screener. There is also a very basic mutual fund screener. The mutual fund screener only searches for Vanguard funds, but they carry funds from many more fund families. Options research is limited to looking at options chains, which are significantly less informative than chains on other sites. Charting for short-term traders is extremely basic and includes no customization or technical studies. However, there are plenty of calculators and planning tools for long-term investors.
TD Ameritrade's thinkorswim platform lets you scan for trading opportunities using real-time data for equities and options. The TD Ameritrade website has multiple screeners, including an excellent bond screener. The news feeds can be filtered according to your portfolio, watchlists, or selected sector.
- Stock, ETF, and mutual fund screeners are available
- Planning tools for long-term investing are plentiful
- Extremely basic charting, which lacks customization or technical analysis
- Customizable charting on the 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, your watchlists, or your portfolio
Education and Security
Vanguard's education offerings are relatively basic and are aimed at very long-term investing. They host occasional webinars, which focus on the long run. The website features industry-standard encryption, and Vanguard also supports YubiKey for advanced hardware-based multi-factor authentication.
TD Ameritrade makes education a major focus. They produced hundreds of 2-minute videos, which can be found all over the Internet. In the security department, they offer basic two-step verification in the form of codes via text or voice messages.
- Education is limited, aimed at long-term investing and goal setting
- Webinars are occasionally offered for long-term planning
- Supports YubiKey for advanced hardware-based multi-factor authentication
- 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
Vanguard's standard commission schedule is very high. They charge $7 per equity trade and $7 plus $1 per contract for options. Margin rates are on the high side. On the plus side, there are 1,800 ETFs that you can trade without paying a commission. Clients with very high account balances are also treated to much lower commissions.
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. Unfortunately, margin rates are high.
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