Investing

E*Trade Vs TD Ameritrade: A Full Comparison With Pros And Cons

Aaron Webber

Published: April 26, 2024 11:30 am

Last Updated: July 18, 2024 6:16 pm

IMPORTANT NOTE:

So, you want to become a professional trader. Maybe you started trading with a mobile app and want to graduate to a wider range of stocks and trading tools. Perhaps your office buddies convinced you to get into trading stocks so you can feel like you fit in. Do you feel like the rat race is leaving you behind and you need to have a trading profile in order to feel like a successful participant in capitalism? Well, we’re here to help you decide between two of the most popular online trading platforms: E*Trade and TD Ameritrade. What are the differences and what are the pros and cons of each?

Why Are We Covering This?

It’s natural to feel apprehensive about trading platforms, or any of America’s financial institutions for that matter. They don’t exactly have the most trustworthy or successful track records. But trading stocks can be a reliable way to protect your money for the future or to make extra money for today. In order to help aspiring traders make the best decision for their financial goals, we compared two of the most popular trading platforms.

Comparing E*Trade and TD Ameritrade

To the new customer, both trading platforms are nearly identical and are functionally the same until you dive into the more complicated details. Both companies charge minimal fees, with the only differences being in the rate of margin fees, and that TD Ameritrade charges mutual fund fees and a higher futures contract fee. On the other hand, E*Trade does not offer international stocks or access to foreign markets.

E*Trade is a subsidiary of Morgan Stanley (NYSE:MS) and was founded in 1991. It was created as an option for people who wanted to trade stocks professionally but did not have the amounts of funds necessary to outsource their trading and wealth management to an asset manager. E*Trade also offers a premium savings account that pays many times more than the average interest rate.

TD Ameritrade began as Ameritrade way back in 1971 and has operated as an all-in-one stock broker offering a wide range of domestic and international stocks, currency trades, futures, options, forex trading, and much more.

The main area where TD Ameritrade outperforms E*trade is with its famous thinkorswim desktop application, allowing traders to create their own in-home trading floor without the need to log into a web browser every time.

It is very important to note that TD Ameritrade was acquired by Charles Schwab (NYSE:SCHW) in 2020, and the integration between the two companies is far from complete. As a result, TD Ameritrade isn’t actually accepting any new customers. Any attempt to create a new account on the TD Ameritrade website is automatically routed to the Charles Schwab website to create an account there. While TD Ameritrade continues to exist, the comparison is valid, but whether it will open to new accounts in the future or be completely absorbed into Charles Schwab remains to be seen.

There is no telling what the future holds for these accounts, but if you are dead-set on picking TD Ameritrade as your platform, your only choice is to wait until the platform is open for new customers. However, as all TD Ameritrade customers are slowly being transitioned into Charles Schwab customers, this is unlikely to happen.

Which One Should You Choose?

New traders will find very little to differentiate between the two platforms, with only experienced and heavy traders finding much to sway their decisions. As TD Ameritrade services are being rolled into Charles Schwab, any comparison should include the service offered by that company as well, along with any uncertainty or loss of services as a result of the acquisition.

Both platforms offer different educational and planning tools, with TD Ameritrade offering far more watch list customization.

Neither platform lets its customers trade cryptocurrencies or digital assets. So, if you are planning on trading or using cryptocurrencies, you will want to use a separate platform for that. If you want to keep all your trading confined to one app or platform, then neither E*Trade nor TD Ameritrade would be the right choice for you.

If you simply want to dabble in trading stocks and some more complicated investment options, we would recommend E*Trade since it is still accepting customers and has been tailored to the digital-first ecosystem.

If you’re curious about any other part of the E*Trade platform, check out this page: a regularly updated list of all our E*Trade guides, news coverage, and lists of benefits.