You’re considering trading online, and you’re considering your options. There are many choices out there, and it can be overwhelming when you’re ready to make a choice. Today, we are comparing Interactive Brokers vs. TD Ameritrade.
We believe that Interactive Brokers is the better online trading platform choice. With two levels of participation and commission fees as low as zero dollars for US-listed stocks and EFTs, they offer a wide selection of products and services to help you meet your financial goals.
At a Glance: Interactive Brokers vs. TD Ameritrade
Both of these online trading platforms have been around for at least 40 years. If we start the challenge of TD Ameritrade vs. Interactive Brokers comparing longevity, TD Ameritrade edges Interactive Brokers by two years.
Which is Better?
Interactive Brokers is one of the premier securities firms with over $9 billion in equity capital while conducting broker and dealer business on over 135 market destinations across the globe. The company and its affiliates execute 3,308,000 trades daily.
TD Ameritrade, created initially as First Omaha Securities in 1975, has strived to improve the online trading experience for self-directed investors and provides investing and trading services for 11 million clients that total more than $1 trillion in assets and custodial services for more than 6,000 independent registered investment advisors.
Ameritrade certainly has some advantages over Interactive Brokers, but, as we’ll see below, the transparency of Interactive Brokers combined with its international networking options earns it our top pick for those trading online.
What Each Broker is Best Suited for
Investopedia rated Interactive Brokers as their best for low margin categories in reviewing these two online trading platforms best for international trading and best for day trading.
TD Ameritrade earned ratings for best for ETF Research rankings, best stock trading apps, and best for beginners.
Depending on your level of expertise, you may be inclined to choose TD Ameritrade; however, as you continue reading, you’ll see why you are an experienced trader or not, Interactive Brokers is the better choice. In our in-depth analysis of TD Ameritrade vs. Interactive Brokers, we compare both companies in the categories of products, services, pricing, education, and ratings.
Interactive Brokers vs. TD Ameritrade
Of course, different companies may excel in different areas. Whether it’s the unique products they offer, their expanse of services, how much they charge, what education they provide, or how they’re rated. Depending on what you’re looking for, you may think one is superior to the other.
Let’s take a closer look at how these two stack up against each other.
Both companies offer slightly different products. To know which is best, we need to look at them all.
TD Ameritrade offers trading in annuities, bonds and CDs, cash management, managed portfolios, Forex, futures, mutual funds, ETFs, options, and stocks.
They also provide portfolios that professionals manage. These experts create portfolios to help you pursue your financial goals as they change and grow.
For their stocks, they offer order ratings designed to seek price improvements continuously. Their mutual funds’ customers get access to Morningstar Research Services, which allows them to view and select top fund performers chosen by the company.
Interactive Brokers trades stocks in 135 markets and trades options and futures on more than 35 market centers. They also trade 23 currencies worldwide, and those transactions don’t have hidden price spreads or markups. The commissions paid are low and transparent.
Their IBKR Spot Gold and IBKR Spot Silver provide clients with access to the London bullion market center for the international over-the-counter market for gold and silver. Clients also have access to trade futures options, commodities, and futures on more than 35 market centers.
Interactive Brokers offer fully transparent, low commissions with no markup on prices when it comes to bonds. They have access to 25,799 corporate bonds, 1,016,681 municipal securities, and 20,686 CDs.
Interactive Brokers also offers ETFs, mutual funds, and hedge fund investing.
When it comes to product offerings and TD Ameritrade vs. Interactive Brokers, both companies offer a wide variety, but we believe Interactive Brokers comes out on top thanks to the added bonus of their commitment to transparency.
Of course, no two brokers provide identical services. Let’s analyze which company has the better offerings.
TD Ameritrade offers investment management services broken down into a selective portfolio and a personalized portfolio. They also provide goal planning and independent advisor referral.
This company also has different platforms to do what you need to do, including mobile trading, thinkorswim® web, thinkorswim® desktop, and web platform.
Interactive Brokers offers services like the Bonds Marketplace, where you can search bonds for free and see how much you can save. They also provide the Mutual Funds Marketplace, the Investor’s Marketplace, portfolio analyst, and interactive advisors.
Interactive Brokers marketplace gives clients a way to inform themselves on how they can make their money work for them.
When we look at Interactive Brokers vs. TD Ameritrade and services, we believe Interactive Brokers is the winner thanks to its interactive marketplace.
The cost of doing business can be a deal-breaker for some. It’s important to know who charges what before making any agreements.
When clients make a trade online, TD Ameritrade offers a $0 commission. Clients can access all of the company’s platforms and products without deposit minimums, trading minimums, or hidden fees. They charge fees ranging from $0.65 per contract on options to $49.99 on no-load mutual funds.
Interactive Brokers has clients split into two different categories: IBKR Lite Clients, who have commissions as low as $0 for US stocks, and ETFs and IBKR Pro Clients who can access the IB Smart Routing system, which provides $0.47 per share price improvements when compared with the industry.
According to Stockbrokers.com, Interactive Brokers offers the lowest margin loan interest rate of any broker.
Once again, Interactive Brokers comes out on top when comparing the pricing of TD Ameritrade vs. Interactive Brokers.
When it comes to educating their clients, both companies recognize the importance of providing the information needed to remove any confusion and instill confidence in a prospective investor.
TD Ameritrade offers education through its Market News, a daily market update provided by Chief Market Strategist JJ Kinahan. They also have the TD Ameritrade Network that provided programming to educate clients on strategy in today’s market provided by industry experts.
Additionally, they provide what they call a fully immersive curriculum where clients can access experienced coaches who will walk them through various trading and investing topics to help them become better-informed investors. The courses are self-directed, easy to follow, and full of information.
TD Ameritrade also offers articles and videos, webinars, and in-person events to educate their clients.
Interactive Brokers offers a variety of ways for clients to educate themselves on the world of online trading. Their IBKR campus offers the Traders’ Academy, Traders’ Insight, IBKR Quant, and Student training labs.
Interactive Brokers designed the IBRK Traders’ Academy to help clients better understand the tools, products, and available markets through their Trader Workstation (TWS), Client Portal, Trader Workstation API applications, and IBKR Mobile.
Through Traders’ Insight, clients can read or watch observations and analyses on the market from industry experts, including IBKR’s Senior Analyst Steve Levine and Chief Strategist Steve Sosnick.
IBKR Quant is a blog for the quantitative professional interested in artificial intelligence, IBKR API, Blockchain, programming, and other new technologies that influence modern markets.
The Student Training Labs are a complimentary resource for teachers who want to combine finance or computer work lessons with real-world trading experiences.
They also provide webinars and short videos as a Traders’ Glossary and Traders’ Calendar.
After comparing TD Ameritrade vs. Interactive Brokers, it’s clear that Interactive Brokers is the winner of this one as well. They not only offer more educational options than TD Ameritrade, but their resources are more in-depth, too.
It wouldn’t be a complete comparison of the two companies without looking at their ratings. A lot of the reviews we found were subjective, so we figured that the best place to go and look at how each of these companies is doing was to check with the Better Business Bureau.
Interactive Brokers has a rating of A+, which means they scored from 97 to 100 based on the same BBB rating scale.
Clearly, this is another category that Interactive Brokers wins.
TD Ameritrade vs. Interactive Brokers: The Winner
After looking at the different products and services offered by both companies, it’s easy to see that you can see if you’re looking for a platform that will allow you to do online trading; both companies fit the bill.
What you need to consider is how much help you need and want. You also have to be honest with yourself about your level of expertise and comfort in trading. You may want to start with some help and a little hand-holding before you gain the confidence to do things independently.
Which is the Best Overall?
Based on our analysis, we believe Interactive Brokers is the best choice for online trading. The company strongly values transparency, low markups, and believes in teaching their clients, not just advising them.
Finding the Best Online Trading Platform for You
Depending on your level of experience and how much time you have to dedicate to trading, you may find one is better than the other.
If you are a trader that makes a lot of international trades or spends much time doing day trading, then Interactive Brokers is the online trading platform you’re looking for. With transparent, low commissions on currency trades and access to 35 market centers when trading futures options, commodities, and futures.
The fact that Interactive Brokers trades stocks in 135 markets make it an excellent platform for day traders.
For people new to trading, TD Ameritrade may be the best platform. Their thinkorswim® platform is perfect for clients who want to trade derivatives and equities while accessing essential tools. This app is available on desktop, via web browser, and mobile app.
TD Ameritrade might be the best platform for those who may not have much experience and appreciate the guidance of an app when making trades.
However, Interactive Brokers is the best platform for traders who want a variety of trading options and markets to invest in. If you want to expand your portfolio, then choose Interactive Brokers.
Interactive Brokers is the better overall online trading platform. If you’re ready to get started on growing your finances for your future goals, whether it’s for retirement or an education fund, now is the time to get started. Click here and to start building your future!