Three of the most popular brokerages for online investors are E*Trade, TD Ameritrade and Schwab. They are some of the largest financial services companies with stellar reputations and strong financial backing. These online brokerages offer commission-free trading, valuable tools to analyze investments and a wide array of investment choices. SmartAsset compares E*Trade, TD Ameritrade and Schwab based on usability, trade experience, offerings and cost.
If you’re looking for a hands-on approach to investing, a financial advisor can help you create a financial plan for your needs and goals.
Overview of E*Trade vs. TD Ameritrade vs. Schwab
When comparing these three financial services companies, it helps to understand their origins and what sets them apart. E*Trade began as an independent online brokerage company in the 1980s, but it was acquired in October 2020 by Morgan Stanley. As part of one of the leaders in the wealth management industry, E*Trade’s financial strength increases with the financial backing of an industry leader. Before combining with Morgan Stanley, E*Trade had 5.2 million accounts with $360 billion in assets.
TD Ameritrade was founded in 1975 and has been an innovator in the brokerage industry many times over. The company was the first to offer touch-tone phone trading, complete an online trade and enable trading on a mobile device. In 2020 TD Ameritrade was purchased by Charles Schwab for about $26 billion.
Schwab was launched in 1975 with the idea of helping individual investors manage their money and reach their financial goals. As a discount brokerage company, Schwab focuses on access, convenience and low cost by offering an array of no-load funds and commission-free ETFs, stocks and options trades. Schwab services almost 34 million brokerage accounts with $7.3 trillion in total client assets.
E*Trade vs. TD Ameritrade vs. Schwab: Fees
Like most online brokerage firms, E*Trade, TD Ameritrade and Schwab have also eliminated many of the costs of online trading. All three companies offer commission-free online trading on most stocks, mutual funds and ETFs. However, if you need assistance from a broker representative, you may pay a small fee or service charge.
The firm requires a minimum balance of $500 to start investing on its platform. If you’re doing your own trading of stocks, options, and other investments, you’ll be charged commissions for each trade. The standard commission for stocks, options, and ETFs is $0 per trade. There are also no-load-no-transaction fee mutual funds available. If you make at least 30 trades per quarter, your options contract fee will go down from $0.65 to $0.50 per trade.
TD Ameritrade has $0 online trading fees. This free trading covers equities (stocks), exchange-traded funds (ETFs) and options traded over the firm’s website and app. At time of writing, this full-service firm offered many features that Robinhood didn’t, leading to a more complicated price structure. For example, broker-assisted trading will typically cost $25 per trade, while placing an order over the telephone involves a $5 trading fee. Some mutual funds will incur a $50 trading fee. Options can cost $0.65 per contract in some cases, while futures cost $2.25 per contract over this service. The firm charges a $75 transfer fee to move your portfolio to another service.
Schwab collects no commissions for online trades of stocks and exchange-traded funds (ETFs). Options trades are commission free, but there’s a fee of $0.65 per options contract. OTC trades are free. Schwab’s robo-advisor accounts have a $5,000 minimum with no fees. Investors with a minimum of $25,000 will incur a $300 charge upon opening an account plus a $30 monthly advisory fee. Schwab charges no commissions for bonds, but futures cost $1.50 per contract. Customer service is free.
E*Trade vs. TD Ameritrade vs. Schwab: Services and Features
All three investment firms offer similar services for investors. On their platforms, you can search for potential investments, analyze them and invest based on your unique criteria.
With its acquisition by Morgan Stanley, E*Trade offers a variety of financial products, including managed portfolios, company retirement accounts, bank accounts and loans. TD Ameritrade focuses almost exclusively on investing, but they do offer a collateral lending program where you can borrow against your assets. Schwab offers brokerage accounts, retirement accounts and a high-yield checking account that’s linked to client brokerage accounts.
Although all three brokerage accounts do not have a minimum investment amount, investors with larger balances may qualify for a bonus.
E*Trade vs. TD Ameritrade vs. Schwab: Online and Mobile
Whether you’re using E*Trade, TD Ameritrade or Schwab for your online trades, you’ll have access to your account through their website or mobile apps. For customer service and broker-assisted trades, you can also reach them over the phone.
The E*Trade mobile app is available for both Apple and Android devices. Customers can make commission-free trades with mutual funds and U.S.-listed stocks, ETFs and options. Plus the app offers streaming quotes, charts and portfolio information where you can set alerts, access comprehensive tools and stream live Bloomberg videos. Customers can also deposit checks, pay bills and transfer money through the app.
TD Ameritrade customers also have a mobile app for Apple and Android mobile devices. The app features mobile check deposits, the latest news and research and educational content. Customers can view their portfolio through the app’s dashboard, make trades and keep up on the market with price alerts, real-time streaming quotes and more. Third-party research and on-demand videos from Thomson Reuters and CNBC are also available.
Customers can buy and sell stocks, ETFs, mutual funds, options and more with the Schwab mobile app. Using either the Apple and Android mobile apps, customers can open a brokerage account, Roth IRA, traditional IRA or a checking account. You can view your balances, transfer money, see breaking news, real-time quotes and in-depth charts. Plus, you can build customized watchlist, monitor market trends and access videos, podcasts and articles from investing experts.
Who Should Use E*Trade, TD Ameritrade and Schwab?
E*Trade, Ameritrade and Schwab offer many of the same features that investors need to manage their portfolios, trade securities and research potential investments. All three offer low-cost or no-fee options for every level of investor, which makes them an excellent choice whether you’re just starting or have years of experience. However, each online brokerage firm has something different to offer its customers.
E*Trade is a good choice for investors who want a more well-rounded financial institution. Through its relationship with Morgan Stanley, not only can E*Trade meet all of your investing needs, but you can also take advantage of the company’s small business retirement accounts, checking and savings accounts and lines of credit.
TD Ameritrade may be an ideal choice if you want to invest in a wider array of investments. Not only can you invest in traditional asset classes, like stocks, bonds, ETFs, mutual funds and options, but they offer alternative investments as well. Customers can invest in futures, forex, crypto, annuities and more through their accounts. Its thinkorswim platform is particularly appealing to sophisticated and active traders.
Schwab, which plans to move TD Ameritrade accounts to its own platform in 2023, also offers a complete financial package beyond investing in stocks, bonds, options and funds. It also offers crypto, bank accounts, home loans and credit cards so investors can handle most of their financial needs under one roof.
When comparing E*Trade vs. TD Ameritrade vs. Schwab, all three can handle most of your needs for researching investments, making trades and monitoring portfolios. All three offer commission-free trading on the most common investments and typically have no minimums to start an account. What sets them apart is the online and mobile experience and the complementary financial products that they offer. You can use these online brokerages purely for investing or take advantage of their banking and lending products for a more complete financial relationship.
- When investing your money, it helps to forecast how your savings and performance will meet your future needs. Our investment calculator forecasts how your investments will grow based on the current balance, ongoing contributions, timeframe and performance. With this information, you can determine the adjustments needed to meet your goals.
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