Published in: Buying Stocks | Dec. 3, 2018
Fidelity and TD Ameritrade are compelling choices for investors who want low commissions and a wide selection of investments. See how the two compare on fees, commissions, and trading platforms below.
No discussion of the top online brokerages would be complete without talking about Fidelity and TD Ameritrade, two of the industry's giants. With millions of account owners, these discount brokers can afford to invest heavily in feature-rich trading platforms, large fund selections, and customer service, making them top picks for investors who want all the bells and whistles at low prices.
Below, we'll take you through a head-to-head comparison of Fidelity vs. TD Ameritrade on prices, platforms, free perks, and more, to help you decide between two of the largest brokers on the block.
Fidelity and TD Ameritrade are highly competitive when it comes to the cost to place a trade. In fact, they both have the same prices (or lack thereof) for the three major trade types -- stocks and ETFs, options, and mutual funds. Here's a quick comparison of their basic commission schedules.
|Broker||Stocks and ETFs||Options||Mutual funds|
|Fidelity||$0 per trade||$0 plus $0.65 per contract||$49.95 (thousands for free)|
|TD Ameritrade||$0 per trade||$0 plus $0.65 per contract||$49.99 (more than 1,800 for free)|
Fidelity and TD Ameritrade both offer many different mutual funds you can trade without paying a commission. Given a typical commission of $49.99 to trade mutual funds at these two brokers, no-transaction-fee mutual funds can be a boon for cost-conscious investors.
Find the best stock broker for you among these top picks. Whether you're looking for a special sign-up offer, outstanding customer support, $0 commissions, intuitive mobile apps, or more, you'll find a stock broker to fit your trading needs.
|Fund type||Fidelity||TD Ameritrade|
|Total mutual funds||More than 10,000||Nearly 12,000|
|No-transaction-fee mutual funds||More than 3,500||More than 1,800|
Fidelity's core business of fund management and retirement-plan administration spills over into its online discount brokerage business. It offers one of the largest lists of no-transaction-fee mutual funds.
In addition, Fidelity has a highly competitive fund lineup that is getting better (and less costly) over time. In particular, its new ZERO line of mutual funds has taken the brokerage industry by storm. Its ZERO index funds are truly no-cost -- clients pay nothing to buy them, and nothing in management fees, making them a truly free index fund offering.
As a general rule, discount brokers won't turn you away just because you want to start small. Fidelity and TD Ameritrade are no-minimum discount brokers, so you can open an account without having to empty your bank account to do it.
TD Ameritrade is a clear leader in trading platforms. Its customers enjoy highly rated mobile apps on Android, iOS, and Windows devices, in addition to a web-browser platform and a full desktop platform. The desktop platform, thinkorswim, is the crown jewel, available to any TD Ameritrade customer regardless of how often they trade or how much they keep in their account. (You'll see why this is important in just a second.)
Fully customizable, thinkorswim's layout can be adjusted to show exactly what you want to see -- stock charts, historical earnings results for a favorite ticker, real-time streaming quotes, or a video feed of recent CNBC interviews. The layout is limited only by your imagination. The thinkorswim platform is also available on mobile devices, and app includes almost all of the functionality you'd find on the desktop platform.
Fidelity matches TD Ameritrade with a web-based browser trading tool and mobile apps. Its advanced desktop platform, Fidelity Active Trader Pro, is free just like TD Ameritrade's advanced offerings.
As far as free platforms go, Fidelity Active Trader Pro is tough to beat. Like thinkorswim, the homepage is completely customizable, with features that include hundreds of charting tools, real-time news, and optional columns to show the information that's most important to you (a stock's daily volume, high or low price, price-to-earnings multiple, and so on).
If you're just getting into the stock market, the first thing you'll need is a stock broker. Browse our pick list to find one that suits your needs -- as well as information on what you should be looking for.
Admittedly, assessing the quality of a trading platform is more of a subjective art than an objective science. Given that both brokers are no-minimum brokers, those who view a trading platform as particularly important in choosing a broker can easily "try before they buy," so to speak.
The short story here is that Fidelity offers far more than TD Ameritrade when it comes to trading foreign stocks. While both brokers will allow you to buy American depositary receipts (ADRs), which are basically foreign stocks with domestic tickers, only Fidelity offers the ability to place trades on overseas markets through an online account.
Fidelity customers can trade in 25 different countries and exchange between 16 different currencies. So if you want to buy a small-cap stock listed on the Australian Securities Exchange, Fidelity can get you there with a few clicks; TD Ameritrade cannot.
The discount brokers of today are nothing like those of the past. While the industry historically focused on eliminating extras like free research to reduce trading costs, electronic trading allows brokers to offer both low costs and excellent research.
Fidelity's value proposition is particularly strong in stock and fund research. With 12 independent third-party research providers for individual stocks, in addition to proprietary research reports on certain investment themes and top-down analysis of the U.S. stock market. Proprietary research is relatively rare with online discount brokers, as few have the scale to justify the cost of in-house analysis and commentary.
TD Ameritrade's size allows it to offer an assortment of proprietary research and commentary, as well as research reports from several third-party providers including CFRA, Ford Equity Research, and Market Edge. The brokerage is especially competitive in daily market reports, offering nearly 50 different pieces from content providers that include S&P Capital IQ and First Call.
If research is particularly important to you, Fidelity is a likely winner. The sheer volume and depth of its research offering (it has reports on more than 6,000 stocks) means that you'll be hard-pressed to find a ticker that isn't covered by one or many of its independent research providers.
Deciding between Fidelity and TD Ameritrade largely comes down to the features and functionalities that are most important to you. TD Ameritrade offers a best-in-class trading platform and zero-commission stock trades. It's also worth mentioning that TD Ameritrade has an extensive branch network, which makes it a good choice for investors who might want some face-to-face guidance.
Fidelity has also joined the zero-commission revolution, and the two brokers' pricing structures for other types of trading are nearly identical. Of the two, Fidelity is the only choice if you want the ability to trade on international stock markets. And as far as research goes, Fidelity is arguably the best of any discount broker, since it simply offers research from all the third parties that supply other brokers… and then some of its own on top!
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