No discussion of the top online brokerages would be complete without talking about TD Ameritrade vs. Fidelity, two of the industry's giants. With millions of account owners, these discount brokers can afford to invest heavily in feature-rich trading platforms. They also both offer large fund selections and great customer service. Either brokerage firm is a top pick for any investor who wants all the bells and whistles at low prices.
Below, we'll take you through a head-to-head comparison of TD Ameritrade vs. Fidelity. We'll look at prices, platforms, free perks, and more to help you decide between two of the largest brokers on the block.
Comparing TD Ameritrade vs. Fidelity, both are highly competitive when it comes to the cost to place a trade. In fact, they charge the same prices for the three major trade types -- stocks and exchange traded funds (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)|
TD Ameritrade and Fidelity both offer many mutual funds and ETFs that you can trade without paying a commission. The typical commission to trade a mutual fund at these two brokers is about $50. A no-transaction-fee (NTF) mutual fund is clearly a boon for cost-conscious investors.
|Fund type||Fidelity||TD Ameritrade|
|Total mutual funds||More than 10,000||More than 13,000|
|NTF mutual funds||More than 3,500||More than 4,100|
Fidelity's core business of fund management and retirement plan administration spills over into its online brokerage business. It offers one of the largest mutual fund selections with no transaction fee, including Fidelity Funds.
Fidelity has a competitive fund lineup that keeps getting better (and less costly) over time. Its ZERO℠ line of mutual funds has taken the brokerage industry by storm. Fidelity's ZERO℠ index funds are truly no-cost index fund offerings. Clients pay nothing to buy them, and nothing in management fees.
As a general rule, a discount broker won't turn you away just because you want to start small. Looking at TD Ameritrade vs. Fidelity, neither online broker has a minimum commitment. You can open an account without having to empty your savings account to do it.
When we look at TD Ameritrade vs. Fidelity, TD Ameritrade is the clear leader in trading platforms. Its customers enjoy highly rated mobile apps on Android, iOS, and Windows devices. They can also use a web browser platform and a full desktop platform, thinkorswim. The thinkorswim platform is their crown jewel. It's available to any TD Ameritrade customer, regardless of trading volume or account balance.
TD Ameritrade's thinkorswim's layout is fully customizable. You can adjust it to show exactly what you want to see. That could be stock charts, historical earnings results for a favorite ticker, real-time streaming quotes, a video feed of recent CNBC interviews, or something else. The layout is limited only by your imagination. The thinkorswim platform is also available on mobile devices. The app includes almost all of the functionality of the desktop platform.
Fidelity matches TD Ameritrade with a web browser trading tool and mobile apps. Its advanced desktop platform, Fidelity Active Trader Pro, is free to anyone with a Fidelity account.
As far as free platforms go, the Fidelity Active Trader Pro is tough to beat. Like thinkorswim, the homepage is completely customizable. Features include hundreds of charting tools, real-time news, and optional columns. You can view the information that's most important to you (a stock's daily volume, high or low price, price-to-earnings multiple, and so on).
Admittedly, assessing the quality of a trading platform is more of a subjective art than an objective science. Neither broker has a minimum required investment. So if you view a trading platform as particularly important in choosing a broker, you can easily "try before you buy," so to speak.
Some investors want to know how TD Ameritrade and Fidelity measure up on trading foreign stocks. The short story is that Fidelity offers far more than TD Ameritrade when it comes to trading foreign stocks. Both brokers allow you to buy American depositary receipts (ADRs). ADRs are basically foreign stocks with domestic tickers. But only Fidelity offers the ability to place trades on overseas markets through your online brokerage account.
Fidelity customers can trade in 25 countries and exchange between 16 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 unlike those of the past. Historically, the industry focused on eliminating extras like free research to reduce trading costs. Now, electronic trading allows brokers to offer both low costs and excellent research.
Fidelity's value proposition is particularly strong in stock and fund research. Customers get access to 12 independent third-party research providers for individual stocks, proprietary research reports on certain investment themes, and top-down analysis of the U.S. stock market. Proprietary research is relatively rare when you work with an online discount broker. That's because 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. It also offers research reports from several third-party providers including CFRA, Ford Equity Research, and Market Edge. The brokerage is especially competitive in daily market reports. TD Ameritrade offers nearly 50 pieces from content providers that include S&P Capital IQ and First Call.
When you compare TD Ameritrade vs. Fidelity on research, Fidelity is hard to beat. It has reports on more than 6,000 stocks. The sheer volume and depth of its research offering means you'll be hard-pressed to find a ticker that isn't covered.
Deciding between TD Ameritrade and Fidelity 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 trading. TD Ameritrade also has an extensive branch network. That makes it a good choice for investors who want some face-to-face guidance.
Fidelity has also joined the zero-commission revolution. The two brokers' pricing structures for other types of trading are nearly identical.
Fidelity comes out on top if you want the ability to trade on international stock markets. As far as research goes, Fidelity is arguably the best of any discount broker. That's because it offers research from all the third parties that supply other brokers -- and then some of its own on top.
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