E*TRADE vs. TD Ameritrade

E*TRADE and TD Ameritrade have followed similar paths over the last three decades, all the way up to being acquired in October 2020. Their track records of trustworthiness and efficient order execution date back to the advent of online trading in the early 1990s. These financial powerhouses have grown exponentially in customer base and service offerings over the years to provide comprehensive trading, investment, and research services for individual investors.

In our 2020 Best Online Brokers reviews, TD Ameritrade earned higher scores than E*TRADE in our Best for Beginners, Best Stock Trading Apps, Best for Day Trading, Best for International Trading, Best for ETFs, and Best for Low Cost categories. Meanwhile, E*TRADE nudged out TD Ameritrade in our Best for Options rankings. Overall, TD Ameritrade was Investopedia’s top pick for beginners, while E*TRADE ranked high for active traders and experienced investors.

Usability

E*TRADE and TD Ameritrade are both considered powerhouses in the industry, and they ranked closely for nearly all our metrics. Here’s a quick look at the differences and similarities the brokers share across the various features we analyzed.

For account setup, we found it’s easier to get started with E*TRADE, as you can open and fund an account quickly and intuitively on your computer or mobile device. While TD Ameritrade also offers account setup through its website and mobile app, it can be challenging to pick the right account type—a consequence of TD Ameritrade’s breadth of offerings.

Both brokerages support easy-to-navigate websites. However, TD Ameritrade offers a broader range of educational content, which may be an essential feature for newer investors. And both offer robust, intuitive, and easy-to-navigate platforms with streaming real-time data and plenty of customization options.

E*TRADE and TD Ameritrade have both put effort into creating well-designed, fully functional mobile apps. Still, TD Ameritrade comes out ahead in terms of the types of orders you can place through the app—11 for TD Ameritrade versus just four for E*TRADE. Both brokerages provide access to watchlists, streaming real-time data and news, charting and research, and trade tickets on mobile. With TD Ameritrade, you can trade the same asset classes on any of its platforms. E*TRADE offers the same except for single name bond trading, which is not available through its app. 

Trade Experience

Desktop Experience

E*TRADE’s official website can be difficult to navigate due to its two-level menus. However, the fully customizable Power E*TRADE platform is more intuitive, and you can access all your favorite tools in a single layout. You have access to streaming real-time quotes across all platforms, and you can stage orders and send a batch simultaneously. You can also place orders from a chart and track them visually.

Like E*TRADE, TD Ameritrade’s web platform has a two-level menu, and you can customize the order type, order quantity, order size, and tax-lot methodology. The thinkorswim interface is more intuitive, easier to navigate, and you can create analysis tools using thinkScript. Streaming real-time quotes are standard across all platforms, as well as free Level II quotes for non-professionals—a nice feature that’s not standard on every trading platform. It’s possible to stage orders and send multiple orders from one screen.

Mobile Experience

E*TRADE and TD Ameritrade both support robust apps with useful functionality and modern layouts. Streaming real-time data is included, and you can trade the same asset classes that each broker offers through its respective web platform (except for single name bonds for E*TRADE). 

E*TRADE offers two apps: The E*TRADE mobile app and the more advanced Power E*TRADE app.  TD Ameritrade also supports two apps: the beginner-friendly TD Ameritrade Mobile App and thinkorswim Mobile—designed for active traders.  

Range of Offerings 

E*TRADE and TD Ameritrade both offer short sales, mutual funds, bonds, futures, commodities, options, complex options, and cryptocurrency (Bitcoin futures). However, foreign currency traders take note: Only TD Ameritrade supports Forex.  And if you’re a mutual fund trader, it might interest you that E*TRADE has more no-load, no transaction fee funds in its line-up: 4,599 versus 4,273 for TD Ameritrade. 

Order Types

E*TRADE clients have access to a wide variety of order types on the website and E*TRADE Pro platforms, including conditional orders. While mobile users can enter a limited number of conditional orders, you can stage orders for later entry on all platforms. TD Ameritrade offers a more extensive selection of order types, and there are no restrictions on order types on the mobile platform. Like E*TRADE, TD Ameritrade lets you stage orders for later entry on all platforms.

Trading Technology

E*TRADE’s order routing technology uses both spray and sequential routing, and most orders are sent to market makers. About 95% of orders for S&P 500 stocks receive 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. E*TRADE publishes its order routing report on its website and updates it quarterly.

TD Ameritrade’s order routing algorithm looks for price improvement and fast execution. The company publishes price improvement statistics that show most marketable orders get slightly more than 1½ cents per share ($0.015) in price improvement, on average. TD Ameritrade receives some payment for order flow but claims its order execution engine does not prioritize it. The company received, on average, $0.0017 per share in payment for order flow in the fourth quarter of 2019. 

Both companies offer backtesting capabilities, a feature that’s essential if you want to develop trading systems or test an idea before risking cash. 

Costs

E*TRADE and TD Ameritrade charge no commissions for online equity, options, and ETF trades for U.S.-based customers. Both have 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 generate interest income from the difference between what you’re paid on your idle cash and what they earn on customer balances. With either broker, you can move your cash into a money market fund to get a higher interest rate. E*TRADE has a stock loan program in which you can share the revenue it generates from lending the stocks held in your account to other traders or hedge funds (usually for short sales). TD Ameritrade does not share its revenues.

Research Amenities

While each platform offers unique features, they’re comparable in terms of research and charting. Both have robust stock, ETF, mutual fund, fixed-income, and options screeners to help you find your next trade. And both have numerous (equally useful) tools, calculators, idea generators, news offerings, and professional research.

You’ll find powerful and customizable charting on Power E*Trade and thinkorswim, and both offer chart trading and plenty of drawing tools.  However, TD Ameritrade comes out way ahead in its technical indicators and studies offerings, with nearly 500 compared to 120 or so for E*TRADE. 

Portfolio Analysis

E*TRADE and TD Ameritrade’s portfolio analysis offerings are similar. You have access to real-time buying power and margin information, plus real-time unrealized and realized gains. Both offer tax reports (capital gains) and the ability to aggregate holdings from outside your account. However, only E*TRADE allows you to calculate the tax impact of future trades. And if you want access to a trading journal or real-time internal rate of return (IRR), you’ll only find that with TD Ameritrade.

Education

Both brokerages offer educational content, including articles, glossaries, videos, and webinars. However, the depth of TD Ameritrade’s offerings far exceeds that of E*TRADE. In addition to a robust library of content, TD Ameritrade averages 500-plus webinars a month and offers more than 1,500 live events each year. E*TRADE has significantly expanded its webinar program in 2020, holding one to seven live events each day.

Customer Service

E*TRADE offers 24/7 phone line support with access to brokers as well as to retirement specialists, financial consultants, active trader consultants, and product specialists. You can chat online with a human representative, and mobile users can access customer service via chat. There’s limited chatbot capability, but the company plans to expand this feature in 2020.

TD Ameritrade offers 24/7 phone support, as well as chatbots on Twitter, Facebook Messenger, Apple Business Chat, and WeChat (in Asia). Live chat is supported on its app, and a virtual client service agent, Ask Ted, provides automated support online. 

Security

E*TRADE and TD Ameritrade’s security are up to industry standards. You can log into any app using biometric (face or fingerprint) recognition, and both brokers protect against account losses due to unauthorized or fraudulent activity. E*TRADE carries excess Securities Investor Protection Corporation (SIPC) insurance provided by London insurers with an aggregate limit of $600 million. TD Ameritrade’s excess SIPC insurance, also provided by London insurers, provides each client with $149.5 million worth of protection for securities and $2 million of protection for cash.

Through Nov. 2019, neither brokerage had any significant data breaches reported by the Identity Theft Research Center.

Our Verdict

Due to its comprehensive educational offerings, live events, and in-person help available at a vast network of branch offices, TD Ameritrade is our top choice for beginners. With a significant upgrade to its options analysis and trading capabilities, E*TRADE is an excellent choice for experienced active traders and investors.