Which Brokerage Is Best for You?

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Vanguard vs. TD Ameritrade: The biggest differences

Vanguard and TD Ameritrade offer a wide array of account types and investment choices for both active traders and passive investors. However, the platforms differ when it comes to fees, features, and investment choices.

Overall, Vanguard is the best choice for retirement investing. It offers multiple types of low-cost mutual funds (eg, all-in-one retirement funds, index funds, and admiral share funds) that the brokerage itself manages, and its selection of retirement planning resources is hard to beat.

TD Ameritrade best suits active traders who want a wider variety of platforms and tools to utilize when making investment decisions. In addition to its web platform, it offers the thinkorswim web and desktop platforms for more advanced traders, and its options contract price ($0.65) is cheaper than Vanguard’s ($1).

Minimum Account

$0 ($3,000 for Vanguard Digital Advisor; $50,000 for Vanguard Personal Advisor Services)

fees

0% (0.20% to 0.30% for professionally managed portfolios)

Investment Types

Stocks, ETFs, options, bonds, mutual funds, and CDs

Minimum Account

$0 ($3,000 for Vanguard Digital Advisor; $50,000 for Vanguard Personal Advisor Services)

fees

0% (0.20% to 0.30% for professionally managed portfolios)

Investment Types

Stocks, ETFs, options, bonds, mutual funds, and CDs

pros

  • Commission-free stocks, ETFs, and options
  • Brokerage, automated, and advisor-managed accounts available
  • Thousands of low-cost mutual funds
  • Multiple resources with expert analysis and market insights
  • Several retirement accounts and services for retirement plan participants

Cons

  • Higher options contract fee than other discount brokerages (Vanguard charges $1 per options contract)
  • No separate trading platforms for advanced traders
  • not cryptocurrencies

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  • Promotion: None at this time.

Minimum Account

$0 ($5,000 or $25,000 for managed accounts through Schwab)

fees

0% ($300 one-time fee and $30/month for advisor-managed account through Schwab)

Investment Types

Stocks, ETFs, options, mutual funds, futures, forex, IPOs, and bonds

Minimum Account

$0 ($5,000 or $25,000 for managed accounts through Schwab)

fees

0% ($300 one-time fee and $30/month for advisor-managed account through Schwab)

Investment Types

Stocks, ETFs, options, mutual funds, futures, forex, IPOs, and bonds

pros

  • Free commissions on stock, ETF, and option trades
  • No minimum requirement to get started with brokerage account
  • Large investment selection
  • Research and educational resources available

Cons

  • No fractional shares
  • Robo-advice and managed portfolios are more expensive
  • not cryptocurrencies

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  • Promotion: None at this time.

Vanguard and TD Ameritrade’s features and account options also vary.

Is Vanguard right for you?

Founded in 1975, Vanguard is an


online brokerage

offering self-directed individual and joint accounts, automated investing portfolios, IRAs, small business retirement plans, education savings accounts, and much more. The platform also stands out due to its zero-commission stock, ETF, and option offerings.

When it comes to Vanguard’s other investment types, you’ll have the choice of mutual funds, bonds, international investments, and CDs. Most of the brokerage’s actively managed mutual funds have a $3,000 minimum, but you’ll only need $1,000 for investor shares in Vanguard Target Retirement Funds and the Vanguard Star Fund.

While Vanguard’s ETFs and options are generally commission-free, its ETFs still have a 0.6% average


expense ratio

, and options contracts cost $1 each. You’ll run into additional fees if you use either of its automated portfolios.

The first — and cheapest — option Vanguard offers for automated portfolio management is Vanguard Digital Advisor. You’ll be responsible for a $3,000 minimum and 0.20% annual fee, but you get access to a personalized portfolio of Vanguard ETFs that the platform allocates based on your investing preferences.

Its other automated investing account, Vanguard Personal Advisor Services, offers something more: one-on-one advisor guidance. This means you’ll have both computer algorithms and a Vanguard


fiduciary

advisor working on your behalf. This account comes with a $50,000 minimum and a 0.30% annual fee.

On the retirement side, Vanguard offers access to traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, 401(k)s, and 401(k) rollovers. Plus, individuals with dependents can open trust accounts, education savings accounts, and UGMA/UTMA custodial accounts.

Finally, Vanguard offers several market analysis resources, and it provides an entire library of expert guides and insights on all things investing. The Vanguard mobile app is available on both iOS and Android devices.

Read Personal Finance Insider’s complete review of Vanguard here »

Is TD Ameritrade right for you?

Like Vanguard, TD Ameritrade caters to all types of investors. Among its investment products are self-directed brokerage accounts, retirement accounts, managed and automated investing accounts, education savings accounts, and more. Charles Schwab acquired TD Ameritrade in October 2020, so the brokerage has merged many of its products with Schwab, but it still offers some separate products and services.

If you’re an active trader looking to save money while investing on your own, this brokerage could be a great choice. It also offers commission-free stocks, ETFs, and options. While Vanguard charges $1 per options contract, TD Ameritrade’s options contracts only cost $0.65.

In addition, its investment selection includes bonds, mutual funds, futures, annuities, IPOs, foreign investments (Forex), and other fixed income securities. And research-oriented investors will have access to Morningstar investment analysis, stock charts, securities screeners, and much more (see its complete suite of tools here).

TD Ameritrade also has accounts for hands-off investors (Selective Portfolios and Personalized Portfolios), but they’re no longer available to new clients. The brokerage redirects new clients to Schwab’s automated investing accounts, giving them the choice of Schwab Intelligent Portfolios or Schwab Intelligent Portfolios Premium.

When it comes to retirement accounts, the brokerage currently offers traditional IRAs, Roth IRAs, solo 401(k)s, SEP IRAs, SIMPLE IRAs, and pension or profit plans. Each account is devoid of account minimum requirements or maintenance fees.

TD Ameritrade outshines Vanguard when it comes to trading platforms. Its current suit of products — thinkorswim desktop, thinkorswim web, mobile trading, and the web platform — all give investors more flexibility when trading.

TD Ameritrade’s app is available on both iOS and Android devices.

Read Personal Finance Insider’s complete review of TD Ameritrade here »