Charles Schwab vs. TD Ameritrade

Editor’s Note: Schwab acquired TD Ameritrade in 2019 and has since migrated TD Ameritrade accounts onto its own platform. Former TD Ameritrade clients now have access to the thinkorswim trading platform and other educational resources through Schwab.

Before Charles Schwab acquired TD Ameritrade, both companies offered very similar online trading platforms. They provided full-service trading that allowed you to access most mainstream securities and research using all or almost all mainstream forms of data. Whether you’re a veteran or a newcomer, either of these products would have serve you well. If you want help planning ahead for your investments, a financial advisor can help.

Charles Schwab vs. TD Ameritrade: Fees

There are usually four types of fees to look out for when choosing a trading platform. You should look out for these when evaluating any investment or trading service:

Trading fees: Any fixed charge attached to each trade that you make. This can come in the form of a flat fee or what’s known as the spread. This is when your broker charges you based on the difference, if any, between the buying and the selling price of an asset.
Trading commissions: This is when a broker will charge you a percentage based on the volume or value of each trade.
Inactivity fees: Any fees that the broker charges you for not trading, such as for keeping money in a brokerage account.
Non-trading/Other fees: Any form of fee for trading on this platform not covered above. For example, a brokerage might charge you for making deposits into your brokerage account, taking money out of it or signing up for additional services.

Like most full-service trading platforms, Schwab and Ameritrade followed the trend pioneered by Robinhood and other upstart services. They dropped the traditional model of making money primarily off of fees and commissions. Before Schwab bought TD Ameritrade, both services offered $0 trading for stocks and exchange-traded funds (ETFs), and charged $0.65 per contract to trade options.

Schwab and Ameritrade also offered the two-tiered mutual fund pricing common to full-service brokerages. Each had its own no-fee fund list and charged users nothing to trade funds on this list. For mutual funds not on a firm’s no-fee list, both Schwab and Ameritrade charged $50 per trade.

Since both firms have had extensive no-fund lists, however, it’s unlikely that an average investor would have needed to pay for mutual fund trading. Unless you were looking for a specific fund in particular, you would have found mutual funds to match just about any trading strategy on either platform’s no-fee list.

Neither firm charged an inactivity fee nor fees for standard transactions such as depositing and withdrawing money. They also both charged $2.25 per contract to trade futures.

Charles Schwab vs. TD Ameritrade: Services & Features

As full-service trading platforms, Schwab and Ameritrade offered most conventional securities for investors. Among other securities, both platforms allowed you to trade stocks, ETFs, options, bonds and forex.

Novice investors should likely avoid high-risk/high-sophistication investments like futures contracts and options trading, while income investors may want to seek out products like bonds and funds.

Both platforms also offered a wide array of data and indicators for both fundamental and technical analysis. For any given asset both Schwab and Ameritrade allowed you to research all mainstream forms of information such as pricing and volume data, key indicators, key ratios, and going back to the lifetime of the asset. However, there was a small, but meaningful, difference between these two firms.

For sophisticated investors, Schwab offers a second platform alongside its flagship product. This is known as “StreetSmart.” It is a trading platform with its own app and website that Schwab has designed for more experienced traders.

StreetSmart offers several small features which make it better suited for this market, from increased customizability in the charts and data that users can create to better real-time data on various markets. These features come at the cost of accessibility, however, and StreetSmart is noticeably more dense and difficult to navigate.

While this will not be a problem for investors with the experience and time to learn the system, less experienced investors will find this product difficult to use (and, at the same time, will get little value out of its additional options).

For less experienced investors, Ameritrade offered a wider set of brokerage services directly through its investment platform. You could get advice on your long-term planning, overall position or even specific investments from individual advisors, or you could set up robo-advising on your investment portfolio.

This automated option was designed to help you create a portfolio of securities according to your goals and personal preferences (such as your tolerance for risk). These options are a potentially valuable asset to investors still trying to fully understand the market and may help set Ameritrade apart.

Charles Schwab & TD Ameritrade: Online & Mobile Experience

Schwab (and Ameritrade when it existed separately) offer website and app-based trading options. As noted above, Schwab offers two different brands: its flagship Schwab platform, as well as StreetSmart for sophisticated investors. Ameritrade also offers two trading options. In addition to its flagship Ameritrade platform, the firm offered thinkorswim – which is now available through Schwab.

Like StreetSmart, thinkorswim is a trading platform meant for sophisticated and other experienced investors. Both of these platforms offer some more data sets and a higher degree of customizability than is available on standard trading platforms, but at the cost of a significant degree of usability. They are complex systems and will overwhelm the retail investor.

For ordinary investors, Schwab continues to offer highly usable, well-laid-out products. You will be able to navigate easily to your portfolio, search for securities quickly and get the basic information you want such as pricing, current trading data and how to buy or sell. More sophisticated information can get a little bit more difficult. Getting additional information beyond the basics is not entirely intuitive and may confuse novice investors at first.

Charles Schwab vs. TD Ameritrade: Who Should Use It?

Small differences distinguished these two products. Generally speaking, sophisticated investors may have found Schwab’s trading platform somewhat more useful. StreetSmart has a small edge over thinkorswim when it comes to customizing data. The All-In-One Trading Ticket may prove useful to an investor who can use a big-picture overview of their positions.

Generally speaking, less experienced investors still learning how the market works may have found Ameritrade’s interface a little bit more intuitive. This platform offered somewhat better advising options. That may have come as a value-add to investors still trying to learn the market. But overall, there was little difference between these two products when they existed separately.

Bottom Line

Before Charles Schwab acquired TD Ameritrade, the brokerages offered two of the best full-service online trading platforms on the market. They were strong options for investors of just about any skill level.

Investing Tips

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