E-Trade Versus TD Ameritrade: Comparing Investing Apps

With the rise of stock trading apps, consumers are only a few taps away from participating in the stock market. Between E-Trade and TD Ameritrade, two of the largest online stock trading platforms, is there a winner? Reviewers seem to favor TD Ameritrade.

Investopedia said that TD Ameritrade is good for investors who are getting started, while it suggests E-Trade for experienced investors and active traders. In Investopedia's 2020 Best Online Brokers reviews, TD Ameritrade scored better than E-Trade in the Best for Beginners, Best for Day Trading, Best for International Trading, Best Stock Trading Apps, Best for Low Cost, and Best for ETFs categories. However, E-Trade fared better than TD Ameritrade in the Best for Options category.

StockBrokers.com also ranked TD Ameritrade as the best overall online broker of 2020 — above E-TRADE, Interactive Brokers, Merrill Edge, Fidelity, Charles Schwab, and TradeStation. The website said that TD Ameritrade is better for beginner investors compared to E-Trade.

E-Trade and TD Ameritrade don't charge commissions for trading stocks, options, and ETFs. Customers don't have to pay annual or inactivity fees at either broker. E-Trade and TD Ameritrade charge $25 for broker-assisted trades. Both brokerages have a per-contract option fee of $0.65.

However, E-Trade charges a reduced commission on options trades to active traders. Investors who trade about 30 times a quarter qualify for a lower fee of $0.50 per options contract at E-Trade. Mutual funds outside the no-fee list will cost $19.99 through E-Trade compared to TD Ameritrade’s fee of $49.99.

E-Trade and TD Ameritrade generate interest income from the difference between what they earn on customer balances and what you are paid on your idle cash. Both of the brokers allow you to transfer your cash into a money market fund to earn a higher rate of interest. E-Trade shares the revenues it generates from lending the securities held in your account to other traders, while TD Ameritrade doesn’t share its revenues.

E-Trade and TD Ameritrade both offer short sales, bonds, mutual funds, futures, options, commodities, complex options, and cryptocurrency. However, only TD Ameritrade supports forex trading. E-Trade discontinued its forex trading platform in 2015. Mutual fund investors should note that as of June 2020, E-Trade has a larger number of no-load, no transaction fee funds in its line-up — 4,599 compared to 4,273 for TD Ameritrade.

TD Ameritrade and E-Trade both offer web browser, mobile app, and desktop platform capabilities. TD Ameritrade’s desktop platform, Thinkorswim, is a favorite among active traders. Thinkorswim doesn’t require a minimum balance for access and it's free to use.

The Thinkorswim platform offers powerful options strategy builders and advanced charting tools. Thinkorswim also offers an earnings report tool that shows how a particular stock has performed before and after an earnings release. E-Trade’s fully-customizable Power E-Trade desktop platform is more intuitive and a favorite among active investors.

TD Ameritrade and E-Trade both offer educational content, which includes glossaries, articles, videos, and webinars. However, TD Ameritrade’s depth of offerings significantly exceeds E-Trade. Both of the brokers' security is up to industry standards.