TD Ameritrade and Charles Schwab are two of the most popular trading platforms in the market right now. TD Ameritrade is a one-stop discount broker that is available for all kinds of investor, as it has zero minimum balance requirements and free research tools. On the other hand, Charles Schwab is great for investors of all experience levels, with all the information needed for someone to get started and the sophisticated trading tools. So, which one is better? See the comparisons between TD Ameritrade vs Charles Schwab below!
First of all, let us start the comparisons between TD Ameritrade vs Charles Schwab by taking a look at their commission fees. When choosing a trading platform, it is very important to consider the commission fees, which will directly affect the total profit that you can get from your trades. If you are planning to invest in just one specific type of investment, you can focus on comparing just one specific type of commission fee. See also: Thinkorswim vs TD Ameritrade.
We should point out that both TD Ameritrade and Charles Schwab do not implement any maintenance or inactivity fee. So, you don’t need to worry about getting unexpectedly charged just for having an account.
TD Ameritrade has higher commission fees for stocks, ETFs, and options, but the commission fee for mutual funds is significantly lower. The commission fee for stocks and ETFs is $9.99 per trade, whereas the commission fee for options is $9.99 + $0.75 per contract. Meanwhile, the commission fee for mutual funds is as much as $49.99 per purchase.
On the other hand, Charles Schwab has slightly lower fees for stocks, ETFs, and options, but the fee for mutual funds is quite higher. The fee for stocks and ETFs is $8.95 per trade, and the fee for options is $8.95 + $0.75 per contract. Meanwhile, the fee for mutual funds is $76.00 per purchase.
If you only want to invest in stocks, ETFs, or options, Charles Schwab is definitely the clear winner here. However, if you want to invest in mutual funds, the fee difference may make something to consider. But the fee difference is actually irrelevant for many investors because, if you want to invest in mutual funds, you’ll be looking for commission-free choices.
Both TD Ameritrade vs Charles Schwab are the leaders of the industry when it comes to no-transaction-fee mutual funds and commission free ETFs. Although not all funds are available in the fee-free format, both brokers here provide enough choices to create a low-cost diverse portfolio.
The total number of mutual funds available in Charles Schwab is more than 5,400. There are more than 3,200 no-load, no-transaction-fee funds and more than 200 commission-free ETFs. Charles Schwab includes the company’s own low-cost funds which provide broad exposure by market cap. There are also Guggenheim and PowerShares ETFs available.
On the other hand, TD Ameritrade comes with more than 11,800 mutual funds. It has more than 3,800 no-load, no-transaction-fee funds, and at least 101 commission-free funds. It features iShares and Vanguard funds, which are known to track well-known indexes to provide rock-bottom expense ratios.
ADR Investments and International Stocks
If you are interested in foreign stocks, the next thing between TD Ameritrade vs Charles Schwab that you may need to consider is the availability of international stocks or ADR investments. In general, many brokers do allow you to buy ADRs so that you can trade foreign companies with US tickers, but not all brokers can give you access to international stock exchanges.
Both TD Ameritrade and Charles Schwab have American depository receipts (ADRs) as well as mutual funds and ETFs of foreign stocks. So, with either broker, you can still invest in foreign companies that are large enough to enter the US market.
However, TD Ameritrade does not provide direct access to the international stock markets. If you want to be able to route your trades to international exchanges, Charles Schwab is the way to go. It can give you access to 12 markets electronically and up to 30 markets through the Global Services Desk.
Minimum Deposit Requirement
TD Ameritrade does not have a minimum requirement for an account. So, you can make an account with as little as one dollar. On the other hand, Charles Schwab has a minimum deposit of $1,000 for IRAs. It is waived for investors who have automatic monthly deposits of at least $100.
When you are planning to make an investment, it is important to do your researches. An in-depth research done by using quality tools and features can help you make better decisions. A trading platform is good if equipped with research tools, great if equipped with free research tools.
Both TD Ameritrade and Charles Schwab offer access to research tools provided by Credit Suisse, Morningstar, S&P, and many others. So, both are great. However, they also come with different proprietary tools.
TD Ameritrade comes with the Portfolio Planner, which you can use to determine the score of your portfolio’s performance. You can select a pre-built target allocation based on your goals. This feature is really great for beginners who need some help in planning their portfolios.
On the other hand, Charles Schwab comes with worksheets and calculators to score your retirement portfolio. It also has its own portfolio profile where you can deep-dive into your portfolio’s makeup and performance and compare them to model portfolios. This feature can be quite more powerful, but the advanced tools may be a little confusing for beginners.
Last but not least, we will compare the mobile apps of TD Ameritrade and Charles Schwab. In general, both brokers have good mobile apps for Android and iOS. Having a mobile app ready in your smartphone is very important, as it will allow you to take actions immediately to respond to events wherever you are.
TD Ameritrade has a highly rated iOS app. Apparently, the users of the iOS app are very satisfied with the usability and usefulness. However, the Android app is rated just slightly above the median rating, which means that it is pretty good but not great.
On the other hand, Charles Schwab is more consistent with the iOS and Android apps. Both the iOS and Android apps are generally rated positively.
|TD Ameritrade||Charles Schwab|
|- Commission fee: $9.99 per trade, + $0.75 per options contract, $49.99 per purchase of mutual funds||- Commission fee: $8.95 per trade, + $0.75 per options contract, $76.00 per purchase of mutual funds|
|- 11,800 funds; more than 3,800 no-load, no-transaction-fee funds and at least 101 commission-free ETFs (iShares, Vanguard, VanEck)||- 5,400 funds; more than 3,200 no-load, no-transaction-fee funds and more than 200 commission-free ETFs (Schwab, Guggenheim, PowerShares)|
|- ADRs, funds with foreign stocks||- ADRs, funds with foreign stocks, access to international markets|
|- No minimum account requirement||- At least $1,000 deposit for IRAs|
|- Portfolio Planner to determine your portfolio’s performance||- Worksheets, calculators, and model portfolios for comparisons and analysis|
Both TD Ameritrade and Charles Schwab are great brokers. However, TD Ameritrade can be your choice if you can benefit from the lack of a minimum account requirement – you can start an account with as little as one dollar. TD Ameritrade has more fee-free funds. This platform is suitable for beginners who need help in building their portfolios. On the other hand, Charles Schwab is great for the more experienced investors; it has lower fees and access to the international exchanges. Charles Schwab has more sophisticated tools to analyze your portfolio.