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TD Ameritrade vs. Fidelity vs. Vanguard


If you’re considering opening a brokerage account to buy and sell equities, chances are you’ve come across TD Ameritrade, Fidelity or Vanguard in your research. The three firms are among the biggest names in the financial services industry, and the reason why is hardly a mystery. Each firm has its own strengths and weaknesses that may make them more or less attractive to different types of investors. If the options feel overwhelming, consider working with a financial advisor who can help you with asset allocation and portfolio management for you. 

Overview of TD Ameritrade vs. Fidelity vs. Vanguard

Something that TD Ameritrade, Fidelity and Vanguard have in common is that each offers a wide range of financial instruments and investment products. Regardless of which of the three you choose, you’ll likely be able to find a combination of products that suits your needs.

Fidelity first opened up shop in Boston in 1946, assisting clients with their investments in the aftermath of World War II. The brokerage account is arguably the firm’s flagship offering, but Fidelity is also well-known for products such as retirement accounts and its educational resources

You may have first heard of Vanguard in the context of one of its mutual funds or index funds, which are widely available for purchase even via non-Vanguard brokerage accounts. However, the firm also has other options like bonds and CDs that make it attractive to  passive investors.

TD Ameritrade has been around in some form since 1975, although back then it was called First Omaha Securities. Since October 2020, the firm has operated as a subsidiary of Charles Schwab, and TD is currently in the process of integrating more fully into the financial services behemoth, with an expected completion date sometime in 2023. TD Ameritrade is a full-service firm, offering brokerage accounts as well as a robo-advisor experience.

TD Ameritrade vs. Fidelity vs. Vanguard: Fees

Investors looking for a low-fee experience shouldn’t have trouble finding one at any of the three firms covered in this article, provided they stick to each firm’s strengths, as we’ll explore in further detail.

For example, investors with a brokerage account at Vanguard can trade any Vanguard mutual fund or ETF (as well as thousands of non-Vanguard funds) commission-free, provided you place the trade online.

If however, you want to trade individual stocks, you’ll face a $7 fee per trade, and that fee will increase if you make enough individual equity trades in a year. A brokerage account at Vanguard also comes with a $20 annual service fee, but this can be waived quite easily by fulfilling one of several conditions, such as choosing electronic statements.

TD Ameritrade also makes it possible for investors to trade in earnest without encountering many fees. The firm offers $0 commissions for online stock, ETF, mutual funds and options. Bond transactions have a $1 transaction fee, and foreign securities can be traded for a $15 fee.

Fidelity operates with a similar structure, allowing for no-fee trades on all U.S. equities, new issue bonds, ETFs, options and Fidelity mutual funds. If you wish to buy or sell non-Fidelity mutual funds (perhaps from Vanguard), you’ll face a $49.95 fee.

TD Ameritrade vs. Fidelity vs. Vanguard: Services and Features

SmartAsset: TD Ameritrade vs. Fidelity vs. Vanguard

TD Ameritrade, Fidelity and Vanguard have a lot in common when it comes to the types of accounts and other offerings they provide to their clients. Prospective investors, in addition to the standard brokerage account, can also find individual retirement accounts, 529 plans and educational investment resources at each firm. That isn’t to say, however, that the offerings in each firm are identical.

When it comes to Vanguard, it may be beneficial to draw a distinction between what is possible and what provides the best experience. For instance, investors with a Vanguard brokerage account do indeed have the ability to trade individual stocks from their accounts. However, due to the fees that such action will engender, a Vanguard brokerage account is much better suited to the passive investing of things such as mutual funds.

Additionally, if you are interested in an even more passive investing experience, Vanguard also offers a robo-advisor service known as Vanguard personal advisor services. This offering charges a 0.3% management fee, and it also requires a minimum investment of $50,000.

If you are in fact looking to take a more active role in the day-to-day training that takes place within your brokerage account, both Fidelity and TD Ameritrade have structures that might be more attractive.

Fidelity, in addition to the fee-free trading that can take place in a brokerage account, also offers a robo-advisor service called Fidelity Go. There is no minimum balance requirement, but if the balance in your account is between 10,000 and $50,000, you will face a monthly fee of $3. If your balance surpasses $50,000, an annual fee of 0.35% of your account balance will apply.

TD Ameritrade vs. Fidelity vs. Vanguard: Online and Mobile Experience

For all three of the firms covered in this article, investors should have no trouble accessing and managing their accounts from whatever platform is the best fit for them, be it mobile, desktop or otherwise. All three have mobile apps that are available on both the Apple App Store and the Google Play Store.

While the investment products it offers stack up quite similarly to the other two firms, one thing that sets TD Ameritrade apart is its award-winning investment platform, thinkorswim. Available as a desktop app, a mobile app and a web application, this platform makes day trading and complex transactions a dream for advanced investors looking for tools that will help them customize the discovery and execution aspects of managing their portfolios.

Who Should Use TD Ameritrade vs. Fidelity vs. Vanguard?

If you’re looking to engage in a good deal of trading and you’ve left your beginner status in the rearview mirror, Fidelity could be the place for you. Its fee structure is well-suited for active traders, and its breadth of news, analytical tools and educational resources will ensure that you always have the latest trends at your fingertips.

TD Ameritrade, thanks to its attractive fee structure and wide service offerings, is something of a jack of all trades for investors. Whether you want to trade from your phone or have a full-fledged advisor relationship, there’s likely a path forward for you.

If you’re looking for a brokerage account to assist you in some passive investing, you likely won’t be bothered by the biggest drawbacks of Vanguard, since you probably won’t be trading many individual equities. This will allow you to take full advantage of Vanguard’s top-of-the-line fund offerings.

Bottom Line

SmartAsset: TD Ameritrade vs. Fidelity vs. Vanguard

Despite the details that differentiate these firms, all three have become well-known in the financial services industry for providing great products to their customers. Investors at each firm are able to manage their portfolios in a manner that fits into their lives and without excessive fees. If you are looking to incorporate a brokerage account into your financial life, it’s hard to go wrong with any firm.

Tips for Investing

  • Even with any of these great investment firm options, you’ll still need to make all of the choices of what you’re investing in. If you, instead, are looking to automate your investments then you may want to work with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now
  • If you are trying to work with one of the firms above and determine what your asset options might look like and what you could have in a few years, use our free investment calculator.

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