TD Ameritrade vs E*TRADE: Which Investment Brokerage Should You Go For in 2021?
TD Ameritrade and E*TRADE are two of the most famous and widely used investment brokerages in the market today. Investment brokerages help consumers with online trading and investment. TD Ameritrade vs E*TRADE is a battle for supremacy among the top investment brokerages. In case you were looking for the right investment brokerage for yourself, you must’ve come across these two names. If you are a little confused about which among the two to choose, this post is going to help you fix that. In this post, we will discuss the fees, services, online experiences, mobile features and other benefits offered by these popular investment brokerages. Let’s get started.
TD Ameritrade vs. E*TRADE 2021: Important Things to Know
What is TD Ameritrade?
Ranging from its Web Platform for all investing levels, to its think-or-swim platform for serious traders, TD Ameritrade offers a wide range of options through its robo advisor, making it an attractive option for both investing professionals and novices.
TD Ameritrade has a $0 account minimum, and as of October 2019 it offers free stock, ETF, and per-leg options trading commissions in the U.S. For options trades there is a $0.65 per contract fee. One of the country’s highest rated investment brokerages, TD Ameritrade comes with many mobile apps designed for investors, such as its famous thinkorswim app. With this app, users can trade a wide variety of investments, including stocks, options, foreign currencies and futures. TD Ameritrade also comes with some extremely customizable features. Users can generate charts, monitor trends and simulate more complex trading options. This is carried out based on the user’s risk tolerance, goals and overall investing strategy. TD Ameritrade also offers a vast base of educational tools and resources so that users can become more well versed with the world of investing.
What is E*TRADE?
E*TRADE is another highly popular investment brokerage that has a wonderfully streamlined and easy to use day trading app. Investors also have the option to trade stocks and ETFs. Future and option trading is also available. It’s very well priced (quite cheap actually) and the app comes with a built-in risk assessment tool that helps users gauge the potential risk factor associated with specific trade strategies.
TD Ameritrade vs. E*TRADE: Fees
E*TRADE and TD Ameritrade provide commission free trading for online equity, options, and ETF trades for U.S.-based customers. Both the investment brokerages come with per-contract options fees of $0.65, and $25 for broker-assisted trades, but mutual funds outside the no-fee list will cost $49.99 through Ameritrade versus E*TRADE’s $19.99.
Both brokers also generate interest on the difference between what you’re paid on your idle cash and what the brokerages earn on customer balances. Both brokers allow you to move your cash into a money market fund to get a higher interest rate. E*TRADE also comes with a stock loan program that allows you to share the revenue that it generates from lending the stocks held in your account to other traders or hedge funds (usually for short sales). Unfortunately, TD Ameritrade does no such thing and doesn’t share its revenues with its customers.
TD Ameritrade vs. E*TRADE: Trading Technology
E*TRADE’s order routing technology utilizes both spray and sequential routing, sending most orders to market makers. Over 95% of the S&P 500 Stocks orders enjoy price improvement. The router looks for a combination of execution speed and quality, and the company states it takes measures to get the best execution available in the market. The order routing report is updated quarterly on E*TRADE’s website.
TD Ameritrade’s order routing algorithm is focused on fast execution and price improvement. The company publishes price improvement statistics that demonstrate how a majority of the marketable orders get slightly more than 1½ cents per share ($0.015) in price improvement. TD Ameritrade also receives a small but significant payment for order flow but claims its order execution engine does not prioritize it. During the fourth quarter of 2019, TD Ameritrade received $0.0017 per share on average in payment for order flow.
Both companies offer backtesting capabilities. This is a great feature for investors looking to develop trading systems or test an idea before risking their hard earned cash.
E*TRADE vs. TD Ameritrade: Online & Mobile Experience
Both investment brokerages come with user-friendly web and mobile interfaces and proprietary apps. Users have the option to trade via mobile apps or online tools. Both the investment brokerages come with strong online resources available to teach beginners about using the platforms, research stocks and more.
E*TRADE comes with two mobile apps: E*TRADE Mobile App, which is designed for all E*TRADE customers to help simplify investing and trading via a mobile device. The Power E*TRADE app is available on both mobile and desktop devices that comes with much more detailed info about trading and investing.
Like E*TRADE, TD Ameritrade also comes with two mobile apps: TD Ameritrade Mobile App has all the essentials that customers need to manage their accounts from their mobile devices. This app can also sync with Apple’s smartwatches. The other TD Ameritrade app is the famous thinkorswim. It is available on mobile and desktop devices and provides a lot of trading tools that can be used by clients to make wiser investment decisions.
E*TRADE vs. TD Ameritrade: Who should use it?
TD Ameritrade is a turnkey financial product. It is very usual friendly and doesn’t charge any fees/commission for stock/ETF trading. On top of that, users don’t need to maintain any kind of account minimum or pay any base commissions in order to use TD Ameritrade. TD Ameritrade also comes with intuitive platforms to help investors, whether novice or not, research stocks, place trades and manage their portfolios. Another great feature of TD Ameritrade is the fact that you can bank with them as well.
E*TRADE can be used by beginner investors as well. However, they must be ready and willing to spend some time and effort learning the app properly. They can benefit from a vast array of educational resources. E*TRADE’s ease of use on its desktop and app is another salient feature of this popular investment brokerage.
It’s also a solid choice for options traders looking for some of the lowest commissions on the market. Options traders can also enjoy the support of E*TRADE Options Specialists. These specialists are easily available and can help you execute a trade you are struggling with. The brokerage’s service – particularly the mobile app and the OptionsHouse trading platform, are more specifically meant for active traders. While it can be used by everyone, only experienced, active traders can extract the most out of it. E*TRADE also sets itself apart by virtue of having a robust, user-friendly app and over 200 futures products available.
While TD Ameritrade and E*TRADE are both reputable and easy-to-use platforms where both new and seasoned investors can trade, they have a lot of other great features. . Both the investment brokerages don’t charge a single penny as brokerage and are known for their glowing customer reviews.
E*TRADE vs. TD Ameritrade: Security
E*TRADE and TD Ameritrade’s security systems are well up to the industry standards. Both the apps have biometric recognition options (both fingerprint and face). Both the brokerages are armed with protection measures against account losses due to unauthorized or fraudulent activity. Neither of these two brokerages have reported any significant data breach over the last few years.
E*TRADE comes with excess Securities Investor Protection Corporation (SIPC) insurance provided by London insurers. The aggregate limit of that insurance is $600 million.
TD Ameritrade’s excess SIPC insurance, also provided by London insurers, gives a protection of $149.5 million for each client when it comes to securities. There is a $2 million protection for cash as well.
E*TRADE vs. TD Ameritrade: Conclusion
Because TD Ameritrade comes with a fantastic collection of educational offerings, live events, and in-person help via a widespread network of branch offices, it is brilliant for beginners. On the other hand, E*TRADE is an excellent option for traders and investors with experience, especially because of the significant upgrade to its options analysis and trading capabilities.