TD Ameritrade vs Fidelity: Which online brokerage wins out?
I totally get it. Choosing an online brokerage firm means researching an exhausting, dizzying array of options. It’s like trying to survive finals week in college—it’s that taxing.
Well, whether that’s a gross exaggeration or not, I think what leaves investors stymied is the literally hundreds (thousands?) of options available to them, and especially for beginners, that vast array makes this all of this investment stuff so overwhelming.
I’ll attempt to slug through the murk (as concisely as possible!) and compare two brokerages that are my absolute favs – TD Ameritrade vs Fidelity.
We’ll compare everything each brokerage firm offers—from products, services, platforms, to promotions, bonuses, margin rates, mobile apps, etc. At the end of each section, I’ll end with the header TD Ameritrade vs Fidelity and discuss the pros/cons within that section.
Let’s get started!
Investments and products: TD Ameritrade vs Fidelity
Here’s the list of investments and products that TD Ameritrade offers:
- Retirement planning
- Managed portfolios
- Bonds and fixed income
- Cash management
- Mutual funds
TD Ameritrade’s website gives you a great overview of each product, just in case you don’t have a clue what an IPO is: https://www.tdameritrade.com/investment-products.page.
To compare, here is the list of investments and products that Fidelity offers:
- Mutual funds
- Retirement and IRAs
- Fixed income, bonds and CDs
- Sector investing
- Cash management and credit cards
- Managed accounts
- 529 college savings plans
- Life insurance and long term care insurance
Fidelity also offers awesome explanations of each investment product on their website. For example, check out “sector investing” at https://www.fidelity.com/sector-investing/overview.
TD Ameritrade vs Fidelity…Where We Stand
It’s tough to compare and measure the range of services that each offers, though Fidelity’s offerings seem more geared toward beginning investors. TD Ameritrade seems to be for intermediate to expert investors. Not too many beginning investors are going to dive right into forex trading, much less know what that means. (Speaking of that, TD Ameritrade does offer forex and futures trading, and Fidelity does not, which definitely gives TD Ameritrade a slight edge thus far.)
Commissions, Fees and Minimum Deposit
I liken fees to the sneaky monsters that get into my kids’ teeth when they refuse to brush. Fees can truly take the punch out of your overall investment.
When researching funds, sure, take a look at the overall return on investment (ROI), but what if the fees are grabbing up your money left and right?
In the fees fight with TD Ameritrade vs Fidelity, who comes out on top? Let’s explore:
|Stocks and ETFs||$6.95|
|Stocks and ETFs, broker assisted||$44.99|
|Options||$6.95 + $0.75 per contract|
|No-load mutual funds||$49.99|
|Treasuries at auction||$25|
|All other bonds and CMOs, CDs||On a net-yield basis|
|Futures||$2.25 per contract plus exchange and regulatory fees|
|Forex||Non-commission currency pairs trade in increments of 10,000 units. There are no additional fees and charges.|
Minimum deposit for TD Ameritrade:
Stocks, mutual funds, options, ETFs, bonds, CDs, UITs, futures, and forex: The minimum deposit to open an account is $0 for a cash account and $2,000 for a margin account.
|Stocks and ETFs||$4.95|
|Stocks and ETFs, broker assisted||$29.95|
|Options||$4.95 + $0.65 per contract|
|Mutual funds||$49.95 ($75 for some); Fidelity family funds are commission-free|
|Bonds and primary market CDs||On a net-yield basis|
|Bonds||$1 per bond ($250 max; $50 max if maturing in one year)|
|Commercial paper||$50 per transaction|
Minimum deposit for Fidelity:
Stocks, bonds, mutual funds, options, commercial paper, UITs, ETFs: The minimum deposit to open an account is $2,500, though it’s $0 for a rollover IRA. $2,500 (or $200 per month) for Roth or Traditional IRA.
Even if you’re like me and a tad mathematically challenged, you can see that across the board, Fidelity wins the fight. Fidelity’s commissions are lower (and in some cases, much lower) compared to TD Ameritrade.
TD Ameritrade’s base margin rate is 8.00%, and above $999,999 invested is -1.50% below the base rate. The range increases continually until investors with under $10,000—their margin rates are +1.25% above the base rate.
Fidelity touts margin rates among the most competitive in the industry, as low as 4.00%. (Yes, as long as the debit balance is $1 million.) From $0 to $24,000, the effective rate is 8.325%.
TD Ameritrade vs. Fidelity: Fidelity is the clear winner in this department.
Now this stuff is cool – with these nifty tools, you can see the magic happening (aka your money growing!) right before your eyes. A broker is only as good as its funds’ ROI, true, but if it has a pretty awesome trading platform, well, that’s worth something, right?
Here’s a quick summary:
TD Ameritrade’s IT people are completely spot on. TD Ameritrade has three platforms that’ll knock your socks off: Trade Architect, Thinkorswim, and honestly, their website is an amazing platform as well, which allows you to have a range of tools at your disposal, from beginner to advanced—your choice.
Fidelity has easy-to-use platforms including its website as well as Active Trader Pro (which does require you to make 36 active trades in a consecutive 12-month period).
TD Ameritrade vs Fidelity: Because of TD Ameritrade’s range of options within its platforms, the winner here is clear.
In the TD Ameritrade vs Fidelity app department, both brokerages offer virtual trading. Each has iPhone, iPad and Android apps.
However, TD Ameritrade has three different apps that clients can choose, depending on experience level – for beginners, a mobile app; for intermediates, a mobile trader app, and finally, for experienced investors, the same Thinkorswim platform is incorporated into an app as well.
TD Ameritrade vs Fidelity: Because of its expansive app repertoire, TD Ameritrade wins, hands-down.
When you need answers, you gotta have them now. How does each broker stack up?
TD Ameritrade offers phone service 24/7, and there are more than 100 actual branches located all over the United States.
Fidelity offers 24/7 phone service with an investment professional or a chat option with a representative. (The chat option is only available from 8 a.m. to 10 p.m. EST, not 24/7.) For more personalized service, Fidelity also has over 100 branch locations.
In this category, it appears that Fidelity wins out. For millennials or younger investors, there’s no doubt that the chat option is appealing. It’s a great way to get younger people comfortable with investing, and in general, the multiple ways you’re able to contact, the better.
TD Ameritrade vs Fidelity Bonus offers
TD Ameritrade touts a “trade commission-free for 60 days and get up to $600” bonus offer—the catch is, that’s only for a deposit of $250,000 or more. For a $3,000 up to $25,000 deposit, there’s no bonus cash offer—just free trades. In addition, they also offer a “refer a friend, get up to $1,000” bonus—as long as your deposit amount is anywhere from $25,000 to $250,000 or more.
Five promotions, five bullets (depending on the size of your investment, of course):
- Get up to $2,500 cash bonus
- Get up to 200 free trades
- Apple gift card up to $500
- 500 free trades for two years
- “IRA Match” from Fidelity
For both, you need to pony up big bucks to take advantage of the promotions. In this category, they’re pretty even.
Final score: TD Ameritrade vs Fidelity
Technically, TD Ameritrade has a slight edge on all things techy, with its Thinkorswim platform and easy-to-use website. TD Ameritrade’s downsides are, without a doubt, high fees and products geared toward more savvy investors.
Conversely, Fidelity’s website and platforms are helpful, with in-depth information and products geared toward investors just learning the ropes. Low fees are a huge upside to using Fidelity, and actually, if you want to get really nit-picky, Fidelity offers 13,204 mutual funds compared to TD Ameritrade’s 12,851! Also, you can’t beat Fidelity’s family mutual funds, which are commission-free.
Downsides? Those pesky $75 mutual funds. Expensive! Also, account minimums are kind of high, at $2,500—many other brokerages require less money for a minimum investment.
Ultimately, Fidelity’s fees can’t be beaten, and that’s the bottom line.