You can get a leg up on your retirement savings by opening an IRA. Traditional accounts grow tax-deferred, while Roth IRAs can grow tax-free, keeping more of your money from Uncle Sam. But to get started with an IRA, you'll need to decide where to open one.

Let's see how Charles Schwab and TD Ameritrade, two brokerages that millions of people use for retirement accounts, compare for individual retirement accounts.

Commission prices

The cost to make a trade is declining with each passing day. You'll find that most trades are now priced at less than $10 at TD Ameritrade and Charles Schwab. The following table shows how their commissions compare by investment type.


Stocks and ETFs

Stock Options

Mutual Funds

Charles Schwab

$8.95 per trade

$8.95 + $0.75 per contract

$76.00 per purchase

TD Ameritrade

$9.99 per trade

$9.99 + $0.75 per contract

$49.99 per purchase

Data source: company websites.

Ultimately, the difference in trading costs boils down to little more than $1 for most trades. The biggest differences are on mutual funds, but fund commissions may be irrelevant for many investors. Both brokerages allow their clients to trade select ETFs and mutual funds completely fee-free.

Mutual fund selection and commission-free choices

Charles Schwab and TD Ameritrade are leaders in the industry when it comes to no-transaction-fee mutual funds and commission-free ETFs. The following table summarizes fund choices by brokerage, including no-transaction-fee mutual funds and commission-free ETFs.


Total Mutual Funds

No-Load, No-Transaction-Fee Funds (NTF)

Commission-Free ETFs

Charles Schwab

More than 5,400

More than 3,200

More than 200 (Schwab, Guggenheim, PowerShares, and more)

TD Ameritrade

More than 11,800

More than 3,800

101 (iShares, Vanguard, VanEck, etc.)

Data source: companies.

Not every fund is available in a fee free format, but many brokers offer enough choices to create a diverse portfolio at a low cost. Schwab's commission-free ETFs include its own low-cost funds that offer broad exposure by market cap. TD Ameritrade's list includes a number of Vanguard and iShares funds that track well known indexes for rock-bottom expense ratios. Depending on how you invest, you could go far with the fee-free funds list offered by TD Ameritrade or Charles Schwab.

Minimum deposit requirement for IRAs

You won't have to empty your savings to open a retirement account. TD Ameritrade doesn't have a minimum account requirement. Charles Schwab requires a minimum deposit of $1,000 for IRAs, which is waived for investors who make automatic monthly deposits of at least $100.

Three jars of coins with seedlings growing out of them

Images source: Getty Images.

International stocks and ADR investments

If foreign stocks are important to you, you may need to be pickier when you open an IRA through an online brokerage. While many brokers allow you to buy ADRs, not all brokerages route orders to international stock exchanges. A summary of foreign investments appears in the table below.

Type of Investment

Charles Schwab

TD Ameritrade

American depositary receipts (ADRs)



Stocks traded on international stock markets

Yes (12 markets electronically, and up to 30 via its Global Services Desk)


Mutual funds and ETFs of foreign stocks



Data source: company websites.

To summarize the differences succinctly, both brokers enable you to trade foreign companies with U.S. tickers, but only Schwab can route trades to international exchanges. Be advised that trading overseas can be costly, as it is standard for brokers to charge higher fees and commissions that vary based on the stock exchange.

Mobile app reviews

Mobile apps for phones and tablets make it possible to trade from anywhere you have an internet connection. Here's how users recently rated Charles Schwab's and TD Ameritrade's apps, as of Jan. 23, 2017:


Apple App Store

Google Play

Charles Schwab

4.0 stars

4.0 stars

TD Ameritrade

5.0 stars

3.5 stars

Data source: relevant app stores

IRA fees: maintenance and inactivity fees

All else equal, it pays to avoid fees if possible. Luckily, we have nothing to warn you about here. Charles Schwab and TD Ameritrade do not charge maintenance or inactivity fees, which means you don't have to worry about being getting nickel and dimed with unexpected charges just for having an account.

Research tools

When it comes to making investments, having access to second opinions from research providers can help you make better decisions. We tend to think that access to research is good, especially if you can get it for free. Charles Schwab and TD Ameritrade both offer research from S&P, Credit Suisse, and Morningstar, among others.

For retirement investors, both brokers have their own proprietary tools to help you make better decisions. TD Ameritrade's Portfolio Planner can be used to score your portfolio's performance over time, and select from a pre-built target allocation based on your goals.

Charles Schwab also provides calculators and worksheets to score your retirement portfolio, plus a portfolio profile to give you a deep dive into the makeup and performance of your portfolio compared to model portfolios.

In either case, we've just scratched the surface. Both brokers have an large research library that is free for account holders.

Where to open an IRA: Charles Schwab or TD Ameritrade?

Depending on how you invest, either brokerage could be a good place for your IRA. Charles Schwab offers slightly lower commissions, and more commission-free funds, but it lags on mutual fund commissions and NTF mutual fund choices. TD Ameritrade delivers with lax initial deposit requirements and lower commissions for some mutual funds, but it doesn't offer as many international investment options.

Truthfully, there isn't one broker to rule them all. It all depends on how you manage your portfolio. To be clear, The Motley Fool does not endorse any particular brokerage, but we can help you find one that is a good fit for you. Visit's IRA Center to see how several leading brokerages compare on key features all on one page!