For anyone interested in trading and investing in popular assets such as stocks and ETFs you have to start with an online trading platform that suits your needs. TD Ameritrade and Robinhood are two stockbrokers that come to mind.
Throughout this TD Ameritrade vs Robinhood comparison, we will examine the key metrics that make a great discount broker. These include fees, non-trading costs, markets and products, regulation, and user experience. So, read on to find out who we will crown the best overall broker in 2021.
In This Guide
Your capital is at risk.
In short, both Robinhood and TD Ameritrade are online trading platforms that allow you to trade financial instruments from the comfort of your own home. Once you’ve opened a brokerage account, and deposited funds you will have unfettered access to a range of markets and products.
Firstly, Robinhood is a US-based discount broker that was launched in 2013 and offers commission-free trading. This broker is regulated by leading financial authorities including the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
Robinhood also offers Cash Management which enables its users to earn interest on uninvested capital.
On the other hand, TD Ameritrade, one of the most widely recognised online trading platforms in the US, was established in 1975. This broker is regulated by the US SEC, FINRA, and CFTC. It is also listed on the NASDAQ stock exchange under the ticker symbol AMTD.
TD Ameritrade is a trusted broker because it has a lengthy history, publishes its financials, is listed on one of the largest stock exchanges in the world, and is supervised by top financial authorities.
In this section of our review, we will examine the types of financial instruments that are on offer and just how you can go about trading and investing in them.
When it comes to markets and products at TD Ameritrade you can choose from a variety of popular asset classes from stocks, ETFs, and forex to options and futures. Other unique and useful features include robo-advisory services and social trading via its desktop trading platform Thinkorswim. Our extensive review found that TD Ameritrade offers financial products from the US market. These include 4 stock markets, more than 2,000 ETFs, and 40,000 bonds.
TD Ameritrade also offers social trading through its Thinkorswim trading platform. By navigating to the tools menu you can create a public trading profile and track other investors, interact with them via chatrooms and even share the outcomes of your trades.
This is a great feature for beginners who want to sample different trading ideas and would like to copy the trading strategies of other more advanced traders. Copying trades can be made with a couple of clicks. Additionally, you can find research and charts created by the TD Ameritrade community.
In comparison, Robinhood’s asset portfolio is smaller as it only supports stock, cryptocurrency, options trading, and ETF trades. Moreover, these assets are mostly limited to US markets. Robinhood offers roughly 5,000 stocks and ETFs which are traded on a zero-commission basis. For those of you who want access to international stocks, you can find some non-US stocks which are provided through American depositary receipts. Simply put, ADRs are stocks that can be traded on US exchanges but represent shares in non-US companies.
If you are a trader with a preference for digital currencies then Robinhood is definitely going to impress. This discount broker offers 100% commission-free crypto investing. From Bitcoin to Ethereum trading, there are 7 cryptos in total that you can access. Furthermore, Robinhood Crypto also provides live market data for a range of digital currencies such as Bitcoin Gold, Monero, NEO, Stellar, and Qtum. Currently, this broker does not offer Initial Coin Offerings.
If you’re interested in forex trading, our TD Ameritrade vs Robinhood review found that the former offers more than 70 currency pairs covering all forex categories – minors, majors, and exotics. TD Ameritrade offers transparent pricing without hidden costs. You can trade forex currency pairs in increments of 10,000 units with 0% commission. The fees are included in the spread. The spread is the gap between the bid and ask price of the currency pair.
When it comes to account types our comparison found that TD Ameritrade has a wider range of accounts to suit almost any situation. Whether you’re looking for a standard, retirement accounts (Roth IRA accounts), education, specialty, managed portfolio, or margin trading account, TD Ameritrade has you covered.
For US-based traders, there are no account minimums when you choose the standard account. However, the minimum deposit varies depending on the type of account you open and your trading preferences. For example, if you open a margin account with this brokerage firm there is a $2,000 minimum deposit.
Alternatively, Robinhood keeps it simple when it comes to account types. You can choose from 3 main accounts: Cash Account, Robinhood Instant, or Robinhood Gold. With a Robinhood Gold account, the minimum deposit is $2,000.
By default when you sign up to the Robinhood trading platform you open a Robinhood Instant account. You can then downgrade to a Cash Account or upgrade to a Gold account whenever you wish. It’s worth noting here that for the latter there is a $5 monthly fee and comes with extra features that are not available with the other accounts.
For example, Robinhood Gold account holders have access to analyst research from third-party providers including Morningstar, and can deposit any amount up to $50,000 instantly. This type of account also gives you the ability to trade with leverage of 2:1.
Most traders and investors around the world will look to pick a trading platform based on their fees and commissions. In other words, you will benefit the most from keeping your trading fees as low as possible. As well as commissions and dealing costs, you will need to consider other non-trading fees such as withdrawal and overnight fees.
Having said this, we compare the trading and non-trading fees of both online brokers below.
Both brokers offer ETF and stock trading with zero commission. This means that you can trade and invest in stocks and ETFs without having to pay a penny in dealing commissions. Additionally, Robinhood also gives you access to fractional shares which allow you to invest in a wide range of stocks with as little as $1. This is perfect for diversifying your investment portfolio and those of you who have a tight investment budget.
It is perhaps worth noting that for online OTC stock trading TD Ameritrade charges a commission of $6.95.
Robinhood doesn’t provide forex trading, so this section is devoted to TD Ameritrade. In short, TD Ameritrade offers forex trading from 6 pm – 5 pm ET every day of the week and all on a commission-free basis. As we have already mentioned there are over 70 forex currency pairs to pick from and are traded in 10,000 unit increments. The trade fees are included in the spread, with 1.2 pips being the average spread fee throughout peak trading hours.
TD Ameritrade does not offer cryptocurrency trading therefore our focus will be entirely on Robinhood in this section. When trading Bitcoin or Ethereum on Robinhood there are no added commissions however you will incur an order flow fee that changes depending on the trade. Robinhood offers 7 different cryptos which are as follows:
TD Ameritrade charges $49.99 per trade for mutual funds with a zero commission No-transaction-Fee. Simply put, NTF mutual funds are no-load funds that this US-based broker does not charge a transaction fee for. Additionally, this broker has a wide offering of more than 13,000 mutual funds a quarter of which are free to trade.
Here’s a rundown of the key trading and non-trading fees charged by both TD Ameritrade and Robinhood.
All in all, both free trading platforms give you access to low-cost trading from the comfort of your own home. But, Robinhood is more cost-effective when it comes to option trading. Furthermore for those of you with a preference for Bitcoin trading then Robinhood is the go-to broker for 0% commission on crypto trading.
With regards to user experience, our comparison guide found that Robinhood is much better suited to new traders with little experience of online investing. This is apparent once you land on the website for the first time. For instance, there is no complex trading terminology and the layout is very simple and user-friendly.
Despite being unable to customize the Robinhood trading platform it is easy to navigate your way around and is very well designed. When it comes to finding an asset all you have to do is enter the name of the stock or cryptocurrency into the search bar and you will be presented with a relevant selection of results.
Furthermore, the user experience on Robinhood is particularly good when opening a position. For instance, let’s say you wanted to buy stocks, all you would need to do is enter your stake. This means that you wouldn’t need to calculate how many shares you could afford because Robinhood offers fractional shares. This means that if you wanted to buy $25 worth of stock you can.
On the other hand, the user experience at TD Ameritrade is tailored for all types of investors from the experienced to the beginner. Firstly, this US-based broker provides web, desktop, and mobile trading platforms. The web and mobile trading apps are great for placing trades, fundamental data, and researching certain financial instruments. Whereas if you are looking to trade more complex assets TD Ameritrade’s desktop trading platform called Thinkorswim might be the perfect fit for your trading objectives. The Thinkorswim platform supports a wider range of assets including forex trading and futures trading, as well as offering advanced technical research tools.
The web trading platform is well designed and very user-friendly but does not offer customizability which can be a hindrance if you are the type of trader who prefers to set things up as you see fit. Along with relevant search functionality, the trading platform allows you to place different order types and you can set a variety of price alerts and push notifications to help you stay updated with the latest developments and market movements in the financial sphere.
Both TD Ameritrade and Robinhood have native mobile trading apps that allow you to invest in financial instruments wherever you are on your mobile device. Both apps are compatible with Android and Apple devices. When it comes to user experience, both offer more or less the same functions and design as the web trading platforms.
Turning our attention to the Robinhood mobile app, the only thing that differentiates the mobile app from the web platform is the fact that stock screeners are not supported on mobile. In terms of safety, the Robinhood app uses a two-step authentication, as well as the option to use biometric authentication, which is very convenient.
TD Ameritrade, on the other hand, offers two mobile trading platforms: TD Ameritrade Mobile and its in-house developed Thinkorswim Mobile Trader. Both are available on Apple and Android devices but there are a few elements that separate the two apps.
Firstly, you can only access futures and forex trading via the Thinkorswim mobile app, and secondly, the Thinkorswim Mobile Trader provides paper trading, charting tools, and conditional trading. During our review, we found that the Thinkorswim Mobile Trader is targeted towards advanced traders who have experience trading complex assets like futures. Secondly, if you are looking for a demo account then your only option is the Thinkorswim app.
Thus far we have explored key metrics including tradable assets, fees, and the general user experience. Now, let’s take a look at what educational resources and tools that both brokers have to offer.
Are you just stepping into the world of online trading? Or do you want to test out your investment strategies? Starting with TD Ameritrade, you can access investment and trading ideas from third-party providers such as Reuters, Morningstar, and TD Group for popular asset groups including ETFs, stocks, and mutual funds.
On the other hand, Robinhood users have access to analyst ratings of financial instruments by experienced investors helping them to make more informed decisions. These analyst ratings present assets that have been rated by experts as either buy, sell or hold. There is also a section entitled ‘people also bought’ which displays alternative and relevant products that are related to the one you have searched for.
TD Ameritrade provides fundamental data predominantly on stocks. After choosing the stock of your choice, simply navigate to the tab that says fundamentals and explore the financials for the past 5 years as well as other rating metrics. Active traders also have access to 400 technical indicators when it comes to TD Ameritrade’s charting tools.
In comparison, Robinhood offers a handful of fundamental data including the number of employees, market capitalization, and Price-Earnings ratios. Furthermore, in keeping with the notion that Robinhood is designed for beginner traders, it is perhaps no surprise that its charting features are simple and straightforward. You can explore past price movements of your chosen stock and have access to a couple of technical indicators when pressing the expand button. But, if you favor a more advanced and in-depth chart analysis then your safest bet will be with TD Ameritrade.
When it comes to education, our comparison review found that TD Ameritrade simply has tons more to offer when compared to Robinhood.
With TD Ameritrade there are many ways you can develop your investing experience and knowledge:
If you use the Thinkorswim desktop platform you also have access to a dedicated learning section that provides other educational materials and FAQs.
On the flip side, Robinhood’s educational materials are very limited. Traders and investors have access to articles that go through the basics of investing and are aimed at beginner traders with little to no experience of the financial sector or online trading.
Having said this, the articles are easy to comprehend, relevant, and perfectly suited to people just entering the world of online trading.
Our extensive research found that Robinhood does not offer a demo account which therefore puts TD Ameritrade ahead when it comes to educational resources.
For those of you who are new to this, a demo account is simply a paper trading account that allows you to test and strengthen your trading strategies without the added risk of losing your capital. TD Ameritrade offers a demo account called ‘paperMoney’ via the Thinkorswim desktop trading platform. As well as $100,000 worth of virtual funds you also have access to a wide variety of advanced trading and charting features giving you the chance to test your trades without the threat of suffering financial losses.
There are no deposit or withdrawal fees with both brokers and the only available deposit option is via bank transfer as credit/debit cards, and e-wallets are not supported. It typically takes 1 business day with an ACH transfer on TD Ameritrade with a $50 minimum transfer.
With Robinhood, your funds arrive straight away when using the instant deposit option. Alternatively, this can take between 4 to 5 working days to process. The instant deposit option has some restrictions: for example, if you are using an Instant account you are allowed to deposit any sum up to $1,000 without delay, whereas Gold account holders are limited to $50,000.
When it comes to customer support TD Ameritrade takes the number one spot because Robinhood’s customer services can only be contacted via email and are not available 24/7. Having said this there is an entire Robinhood support page dedicated to FAQs and other helpful content that can sometimes offer the answers to your questions.
But, in terms of accessibility TD Ameritrade’s customer support can be reached via telephone, email, and live chat 24 hours 7 days a week. The live chat function offers relevant and fast answers. In addition, there is a virtual assistant that can guide you to relevant pages.
Overall, Robinhood is perfectly suited to new investors with little trading experience who want to buy and sell US shares and ETFs on a commission-free basis. However, these aren’t just empty words, as we have pinned Robinhood against other widely popular online brokers in the following comparison reviews:
When selecting an online trading platform, evaluating safety and regulation should be your number one priority. As we already mentioned at the beginning both brokers in question are regulated by widely recognized financial authorities including the SEC and FINRA. It is worth noting here that TD Ameritrade is also regulated by the Commodity Futures Trading Commission, the Monetary Authority of Singapore, and the Hong Kong Securities and Futures Commission.
TD Ameritrade clients are covered by the Securities Investor Protection Corporation. In short, this protection scheme protects up to $500,000 of investor funds as well as $250,000 for cash claims.
Robinhood Crypto LLC is not covered by the SIPC protection and therefore should the company go bust your funds will not be covered. On the other hand, Robinhood Financial LLP is covered by the SIPC client fund protection.
Moreover, both brokers do not offer negative balance protection, which means that you can lose more capital than you have invested.
All in all, our review found that Robinhood is better suited to new investors who are just stepping out of their comfort zone and into the world of online trading. However, TD Ameritrade simply has a lot more to offer than Robinhood in terms of tradable assets, account types, and educational materials and resources such as the paperMoney demo account. Both are user-friendly and have well-designed features and interfaces. Furthermore, if you are the type of trader who is always out and about, then you can trade wherever you are with the mobile trading apps.
But, there is a third broker that we recommend as the best overall social trading platform in 2021. That broker is of course eToro which now offers its services to more than 20 million users worldwide, and there’s no surprise as to why.
With eToro you can trade on 17 different international markets such as Asia, Europe, North America, and many more. eToro also has several unique trading tools in its arsenal including CopyPortfolios and Copy Trading.
The former is an expert-managed diversified investment portfolio that is monitored by eToro itself and the latter is an innovative online trading feature that allows you to copy the strategies and trades of advanced investors. These features are perfect for investors looking for more of a hands-off approach to trading.
In terms of tradable assets, there are hundreds of financial instruments to trade on eToro, spanning multiple different categories from commodities and cryptocurrencies to indices and stocks. Some positions on eToro are made through CFDs which give you access to leverage, short positions, fractional shares, and more.
Here’s a breakdown of eToro’s main trading and non-trading fees:
This TD Ameritrade vs Robinhood review has examined all the key metrics that need to be considered before choosing a broker. We have focused on tradable assets, available payment options, customer services, user experience, mobile trading, fees, and more. Therefore, you should be in a position to decide which broker can help you achieve your trading goals.
Additionally, if you want to find out how Robinhood does when compared to another online trading platform then you might just want to read our Robinhood vs eTrade review.
Nevertheless, during our research, we found that eToro is the best option for almost all your needs. eToro offers 100% commission-free trading with competitive tight spreads, as well as a myriad of social and copy trading features.
So, if you want to get started with zero-commission trades from the comfort of your own home, simply click the link below and trade with the click of a button!
Trade with eToro Now
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Both brokers offer mobile trading apps that allow you to trade financial instruments with the click of a button wherever you may be in the world. However, with TD Ameritrade’s Thinkorswim Mobile Trader you also have access to conditional and virtual trading as well as charting tools. Additionally, TD Ameritrade’s Mobile Trader also provides forex and futures trading.
Charles Schwab, which is a US-based and NYSE-listed broker, announced its $22bn purchase of TD Ameritrade on October 6th 2020.
TD Ameritrade is a US-based stockbroker which was established in 1975. It is regulated by the US SEC, FINRA, and CFTC. It offers free stock and ETF trading as well as low non-trading fees including no account or inactivity fees.
To sell stocks short you will need a margin trading account. To short a stock you need to sell it for a higher price than you will buy it for later on. For example, you place an order to sell short 200 shares of Apple stock at the price of $50. The broker of your choice then borrows the shares, fills your order, and puts them in your brokerage account; now you are net short $10,000 worth of Apple stock. Then, let’s say that the price of Apple stocks drops to $45. You sold your stocks at $50 and decide to take advantage of the price drop. So, you purchase at $45 to close your position making a profit from the difference of $1000.
Robinhood makes money from rebates from Market Makers and Trading Venues, monthly account fees, 2.5% annual interest charge on margin greater than $1,000 and from uninvested funds that are not put into the cash management network.
Dassos Troullides is an experienced finance writer who specializes in CFD, stock, and crypto trading. In particular, Dassos is skilled at breaking down complex financial topics to help new and advanced investors make better trading decisions. Dassos also writes for BuyShares.com, InsideBitcoins.com, LearnBonds.com, ForexCrunch.com, and EconomyWatch.com
Best UK Stock, Forex, CFD, Crypto, Social or Day Trading Platform that meets your needs.