Advertiser Disclosure

Investing

E*Trade vs. TD Ameritrade

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

E-Trade and TD Ameritrade are two of our picks for the best online brokers available in the market today. While these firms share broad similarities in the services they offer, there are some important differences that can hopefully help you make an informed choice between these two key industry players.

Based on our comparison, TD Ameritrade seems to offer a wider range of trading options, including foreign exchange and cryptocurrency, plus more portfolio management options for larger balance accounts.

E-Trade vs. TD Ameritrade: Feature comparison

E-Trade TD Ameritrade
Current promotions New accounts with a deposit of at least $5,000, may be eligible for a cash bonus, which can range from $100 to $2,500 depending on the amount deposited. Get up to $600 when you open and fund an account within 60 calendar days of account opening, depending on deposited amount.
Stock trading fees
    • $0.00 per trade
  • $0.00 per trade
Minimum deposit to open account
  • $500
  • $0
Tradable securities
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
  • Futures/Commodities
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
  • Futures/Commodities
  • Forex
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $75 full account transfer fee
  • $25 partial account transfer fee
  • $0 yearly inactivity fee
  • $0 annual fee
  • $75 full account transfer fee
  • $0 partial account transfer fee
  • $0 inactivity fee
Commission-free ETFs offered
Mutual funds (no transaction fee) offered
Offers automated portfolio/robo-advisor
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Coverdell Education Savings Account(ESA)
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • Custodial IRA
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Guardianship or Conservatorship
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • 529 Plan
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Coverdell Education Savings Account(ESA)
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • Custodial IRA
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Guardianship or Conservatorship
Ease of use
 
 
Mobile app iOS, Android iOS, Android, Windows phone
Customer support Phone, 24/7 live support, Chat, Email, 30 branch locations Phone, 24/7 live support, Chat, Email, 364 branch locations
Research resources
  • SEC filings
  • Mutual fund reports
  • Earnings press releases
  • SEC filings
  • Mutual fund reports
  • Earnings press releases
  • Earnings call transcripts
  • Earnings call recordings

E-Trade vs. TD Ameritrade: Fees & account minimums

Some brokers charge an annual or monthly fee to maintain your account. Neither E-Trade nor TD Ameritrade impose such a fee, nor do they charge a fee if your account is inactive during the year. However, E-Trade does impose a $500 minimum to open an account at the firm. TD Ameritrade requires no minimum account balance.

Neither E-Trade nor TD Ameritrade charge commissions for U.S. stock trades. Both firms offer a range of commission-free exchange traded funds (ETFs) and the ability to purchase mutual funds without a transaction fee.

Both brokers charge fees for professional account management services. At E-Trade, fees range from 0.30% to 1.25% of assets under management, depending on the services chosen by the investor. At TD Ameritrade fees are similar, ranging from 0.30% to 0.90% of assets under management.

E-Trade charges a $75 fee for a full account transfer and a $25 fee for a partial transfer. TD Ameritrade charges the same $75 fee for a full account transfer. However, at TD Ameritrade, partial account transfers are free, offering investors additional flexibility.

Many online brokers offer special incentives to attract investors, and these offers can vary over time. E-Trade and TD Ameritrade currently offer $600 bonuses for deposits of $250,000 or more. E-Trade also offers a $2,500 bonus if you deposit $1,000,000 or more.

E-Trade vs. TD Ameritrade: Tradable securities

In addition to trading stocks and bonds, E-Trade and TD Ameritrade offer their customers a wide range of investable asset classes to choose from:

  • Mutual funds: For investors interested in the professional management that mutual funds offer, at E-Trade you can invest in more than 4,400 mutual funds with no transaction fee. Meanwhile, TD Ameritrade offers more than 13,000 mutual funds.
  • Options: An option allows an investor to sell a security at a predetermined price for a certain period of time. At E-Trade investors can trade options free of any commission, although there is an additional fee of $0.65 per contract. This fee drops to $0.50 with 30 or more trades per quarter. TD Ameritrade charges no commissions to trade options, but charges an additional fee of $0.65 per contract.
  • ETFs: Including ETFs in your portfolio is a great way to add an element of diversity. E-Trade gives investors access to more than 250 ETFs free of commission. At TD Ameritrade, investors have access to more than 550 ETFs that are commission-free.
  • Foreign exchange trading. At TD Ameritrade, investors can access the currencies of more than 20 countries. E-Trade does not offer foreign exchange trading.
  • Futures. If you decide to trade in futures you are essentially agreeing to sell a security or other asset at a set price at a predetermined time in the future. E-Trade offers futures trading for $1.50 per transaction. TD Ameritrade gives investors access to more than 70 futures products.
  • Cryptocurrency. TD Ameritrade recently began offering cryptocurrency investing through ErisX, a regulated exchange for cryptocurrency trades. E-Trade does not offer the ability to invest in cryptocurrency.

E-Trade vs. TD Ameritrade: Special features

E-Trade offers three levels of managed account services. Core Portfolios is the company’s robo-advisor product, which offers you an automated portfolio of ETFs customized to your investment goals. Just complete a five-minute online questionnaire to get started, which includes information about your goals, timelines and attitudes about risk. The minimum investment is just $500 and the annual fee is 0.30% with no commissions.

Blended Portfolios is E-Trade’s second level of managed accounts. Investors work with a financial consultant to tailor a portfolio that meets their needs, however you need a $25,000 minimum balance to gain access to Blended Portfolios. Annual management fees range between 0.65% and 0.90%, depending on the total amount of money invested under the service.

E-Trade’s third level of managed accounts, Dedicated Portfolios, includes an ongoing one-on-one relationship with a dedicated financial consultant, and it requires a $150,000 minimum investment. Annual management fees range between 0.95% and 1.25%.

TD Ameritrade also offers investors three levels of managed portfolios. Essential Portfolios is the firm’s robo-advisor option, offering five goal-oriented ETF portfolios. The minimum investment is $5,000 and the annual management fee is 0.30%.

Selective Portfolios offers more personalized service, and invests in both ETFs and mutual funds. A financial consultant helps you set investing goals, and a support team that regularly updates you on how the account is tracking towards those goals. The minimum investment is $25,000, while annual fees range from 0.55% to 0.90% depending on account balance.

Personalized Portfolios provides TD Ameritrade’s highest level of service, with tailored advice and portfolio construction. It gives you a one-on-one relationship with a financial consultant, plus extra guidance and support from a team of investment professionals. The minimum investment is $250,000, and annual fees range from 0.60% to 0.90%, depending on portfolio type and the total amount invested.

E-Trade advantages

  • If you are a high-volume options trader, after you do 30 trades in a quarter, the fee per contract drops to $0.50 from $0.65. TD Ameritrade offers only a flat fee of $0.65 per contract.
  • E-Trade offers its clients access to solid research tools including market news, recordings and transcripts of earnings calls as well as the ability to analyze companies with fundamental stock research, technical research and bond, mutual fund and ETF research tools.
  • E-Trade has a “better” bonus for new clients. For a deposit of only $10,000 you get $600 and up to 500 free trades. While TD Ameritrade offers 60 days of free trades for only a $3,000 deposit, you need to deposit $250,000 to get a $600 cash bonus.

TD Ameritrade advantages

  • TD Ameritrade does not impose a minimum balance to open an account. At E-Trade, the minimum initial investment to open an account is $500.
  • Some transfer fees at TD Ameritrade are lower. For example, there is no charge for a partial account transfer while E-Trade imposes a $25 fee.
  • TD Ameritrade has 364 branches located around the country to provide customer support. E-Trade has only 30 branches.
  • TD Ameritrade offers investors access to more mutual funds and ETFs that are free of transaction fees. For example, TD Ameritrade offers more than 13,000 mutual funds, nearly three times the number of mutual funds at E-Trade(4,400).

E-Trade vs. TD Ameritrade: Which is best for you?

With both companies offering $0 stock trading, E-Trade is likely to appeal to heavy options traders, since the cost per trade drops after 30 trades in a quarter. TD Ameritrade will appeal to investors who are looking to trade foreign exchange and cryptocurrency. And for investors who are looking for stronger portfolio consulting options, TD Ameritrade offers a wider choice of customized investing advice for larger account balances.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Peter Fleming
Peter Fleming |

Peter Fleming is a writer at MagnifyMoney. You can email Peter here

Advertiser Disclosure

Investing

Robinhood vs. E*TRADE: Which Should You Choose?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

With free trades for virtually all asset classes but minimal extra trading resources or managed account services, Robinhood is for investors who do their own research and are simply looking for a place to trade. E-Trade is for investors who want the full investment experience, including access to research and other plenty of account services. Read on to discover more about these leading investing platforms.

Robinhood vs. E-Trade: Feature comparison

Robinhood E-Trade
Current promotions Share of stock for new customers who are referred by an existing Robinhood account holder New accounts with a deposit of at least $5,000, may be eligible for a cash bonus, which can range from $100 to $2,500 depending on the amount deposited.
Stock trading fees
  • $0 per trade
  • $0.00 per trade
Minimum deposit to open account
  • $0 per trade
  • $500
Tradable securities
  • Stocks
  • ETFs
  • Options
  • Crypto-currency
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
  • Futures/Commodities
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $75 full account transfer fee
  • $0 inactivity fee
  • $0 annual fee
  • $75 full account transfer fee
  • $25 partial account transfer fee
  • $0 yearly inactivity fee
Commission-free ETFs offered
Mutual funds (no transaction fee) offered
Offers automated portfolio/robo-advisor
Account types
  • Individual taxable
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Coverdell Education Savings Account(ESA)
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • Custodial IRA
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Guardianship or Conservatorship
Ease of use
 
 
Mobile app iOS, Android iOS, Android
Customer support Email Phone, 24/7 live support, Chat, Email, 30 branch locations

Robinhood vs. E-Trade: Fees & account minimums

Some brokers charge an annual or monthly fee to maintain your account. Neither Robinhood nor E-Trade impose such a fee. And neither charges a fee if your account is inactive during the year. However, while Robinhood requires no minimum balance to open an account, E-Trade imposes a $500 minimum.

There are zero commission fees for trading U.S. stocks or exchange traded funds (ETFs) at both Robinhood and E-Trade. Note that E-Trade offers users the ability to purchase mutual funds without a transaction fee, while Robinhood does not offer access to any mutual funds.

Robinhood does not currently offer professional account management services. At E-Trade, annual fees for account management range from 0.30% to 1.25% of assets under management, depending on what services the investor chooses.

Both Robinhood and E-Trade charges a $75 fee for a full account transfer. While Robinhood does not list a separate fee for partial account transfers, E-Trade imposes a $25 fee for a partial transfer.

Many online brokers offer special incentives to attract investors, and these offers may vary over time. E-Trade gives new customers $100 for a $5,000 deposit, and up to $2,500 for a deposit of $1,000,000 or more. Robinhood does not offer any special incentives currently.

Robinhood vs. E-Trade: Tradable securities

In addition to trading stocks and bonds, both Robinhood and E-Trade offer their customers a range of investable asset classes to choose from. At E-Trade, the range of securities offered is wider and more diverse.

  • Mutual funds: For investors interested in the professional management that mutual funds offer, at E-Trade you can invest in more than 4,400 mutual funds with no transaction fee. Robinhood does not offer investors access to any mutual fund products. This makes E-Trade the clear choice for investors who want to buy mutual funds.
  • Options: An option allows an investor to sell a security at a predetermined price for a certain period of time. At Robinhood, listed option trades are free. At E-Trade, investors can trade options at regular commission rates plus an additional fee of $0.65, which drops to $0.50 with 30 or more trades per quarter.
  • ETFs: Including ETFs in your portfolio is a great way to add an element of diversity. Robinhood offers ETF trading free of commissions. E-Trade gives investors access to more than 250 ETFs free of commission. This makes Robinhood significantly less expensive for ETF traders.
  • Foreign exchange trading. Neither Robinhood nor E-Trade offer access to foreign exchange trading.
  • Futures. If you decide to trade in futures you are essentially agreeing to sell a security or other asset at a set price at a predetermined time in the future. Robinhood does not make futures trading available to its investors. E-Trade offers futures trading for $1.50 per transaction.
  • Cryptocurrency. This is another of the products that Robinhood offers free of commission. The firm offers cryptocurrency in 38 states and Washington, D.C.
    E-Trade does not offer the ability to invest in cryptocurrency.

Robinhood vs. E-Trade: Special features

E-Trade offers three levels of managed account services. Core Portfolios is the company’s robo-advisor product, which offers you an automated portfolio of ETFs that are customized to your investment goals. To get started, just complete a five-minute online questionnaire, which includes information about your goals, timelines and attitudes about risk. The minimum investment is just $500 and the annual fee is 0.30% with no commissions.

Blended Portfolios is E-Trade’s second level of managed accounts. Investors work with a financial consultant to tailor a portfolio that meets their needs, however you need a $25,000 minimum balance to gain access to Blended Portfolios. As of the date of publishing, annual management fees range between 0.65% and 0.90%, depending on the total amount of money you invest in the program.

E-Trade’s third level of managed accounts, Dedicated Portfolios, includes an ongoing one-on-one relationship with a dedicated financial consultant, and it requires a $150,000 minimum investment. Annual management fees range between 0.95% and 1.25%.

Robinhood advantages

  • At Robinhood, investors can invest in cryptocurrency. This is not the case at many online brokers, including E-Trade. An added advantage is that Robinhood does not charge a commission for cryptocurrency trades.
  • Robinhood has an easy-to-use website that makes trading with the firm quick and easy. You can literally be trading within minutes.

E-Trade advantages

  • E-Trade offers access to mutual funds, which are not available through Robinhood.
  • E-Trade offers its clients access to solid research tools including market news, recordings and transcripts of earnings calls as well as the ability to analyze companies with fundamental stock research, technical research and bond, mutual fund and ETF research tools.
  • E-Trade offers bonuses for new customers, while Robinhood doesn’t offer any bonuses.

Robinhood vs. E-Trade: Which is best for you?

In the final analysis, the differences between Robinhood and E-Trade are significant. If you are simply looking for a platform to trade stocks and other securities that you research on you own, then Robinhood is the choice for you. But if you want your brokerage firm to support your investment efforts with research, a fuller range of products, including mutual funds, and the option of access to professional management, then E-Trade is likely to be a better option.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Peter Fleming
Peter Fleming |

Peter Fleming is a writer at MagnifyMoney. You can email Peter here

Advertiser Disclosure

Investing

Smart Investment Choices for Your Roth IRA

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

three people in financial planner meeting
iStock

Roth IRAs are retirement savings vehicles that allow participants to make after-tax contributions (as opposed to pretax contributions to traditional IRAs). Account earnings then grow tax-deferred. If the account holder meets certain requirements, withdrawals after age 59 and a half are entirely tax-free, including earnings.

Roth IRA: contribution limits

For the 2020 tax year, investors can contribute a maximum of $6,000 to a Roth IRA. This is the same as the 2019 contribution limits, but up $500 from the 2015-2018 contribution limits of $5,500. Taxpayers who are 50 years of age or older can contribute an additional $1,000 in catch-up contributions for 2020.

For 2020, Roth IRA contributions phase out at between $124,000 and $139,000 in income for single taxpayers and between $196,000 and $206,000 in combined income for married taxpayers.

Roth IRAs: a popular way to save for retirement

Roth IRAs remain a popular choice for retirement savings. According to a recent report by the Investment Company Institute (ICI), Americans held $810 billion in Roth IRAs at the end of 2017. Some 34% of IRA investors had a Roth IRA at year’s end in 2016 (the latest year available). The ICI found that 31% of Roth IRA investors are under the age of 40. That same report said stocks and stock mutual funds represent 65% of Roth IRA assets as of 2016. If you include the stock portion of so-called target-date mutual funds, that number increases to 78%.

Roth IRA tax benefits

As a Roth IRA investor, you can invest your account assets in virtually any available investment vehicle. This includes alternatives such as stocks, bonds, put and call options, mutual funds, bank deposits, and exchange traded funds (ETFs). However, because of the unique tax characteristics of Roth IRAs, conventional wisdom argues that some investments may offer more advantages than others.

As noted earlier, Roth IRA investors get no upfront tax break. But when you take distributions, all withdrawals (including earnings) are tax- free as long as you are at least 59 and a half and the account has been in existence for at least five years (as opposed to traditional IRAs, where all distributions are taxable, including earnings).

The unique tax treatment of Roth IRAs, where you pay no tax on distributions, suggests that you consider choosing investments that have the potential to pay high taxable income (and hopefully a higher yield) and concentrate on finding vehicles that offer those characteristics.

Smart investments for a Roth IRA

Here are three investment characteristics that may be well-suited to your Roth IRA:

  • They have high dividends, including real estate investment trusts (REITs), utility stocks and the stocks of companies. Of course, some mutual funds also hold these kinds of investments.
  • They are actively managed or traded, meaning there is high potential for taxable capital gains. This might include an actively managed mutual fund or a portfolio of stocks that you expect to trade regularly.
  • They offer the potential for high growth. Examples might include so-called small-cap stock mutual funds as well as international stock mutual funds that are known to have the potential to grow over the long term. “Small-cap” refers to companies with a small market capitalization. While many consider small-cap companies to have a high potential for growth, they also carry more risk and are more volatile than larger companies.

In contrast, putting investments such as bank deposits, money market funds or low-growth stock mutual funds that pay low dividends into a Roth IRA may not be the best idea because these investments grow slowly and won’t ultimately result in a particularly high tax bill. That means there are few advantages to putting them in a Roth IRA, where all investment income — including dividends and capital gains — ultimately will be tax-free.

Kenneth F. Robinson, a certified financial planner for Practical Financial Planning in Cleveland, takes a narrower view on the best Roth IRA investments. In his mind, a tax-focused approach to investing can make a difference. His first suggestion is that investors put “investments that will grow the most” in Roth IRAs. For Robinson, those include small-cap stock mutual funds as well as international stock mutual funds. Robinson explained how holdings in these two investment categories “have historically earned the most over time.”

Robinson emphasized that if stocks are investments for the long run, “you have to look at them in the long run.” Over a period of, say, 15 years, he said, small-cap and international stocks and mutual funds “typically come out at or near the top” in comparison to their peers in terms of performance. Overall, Robinson thinks investors should look for investments with the potential for the greatest long-term growth.

High-growth investments in a Roth IRA are particularly appropriate for younger investors. Someone who is, say, 35 years old, will have 30 years or more for their Roth IRA to grow. The growth period can be even longer, as Roth IRA owners aren’t required to take minimum distributions based on their life expectancy from their account beginning at age 70 and a half. As a result, the growth period could be 40 years or more, emphasizing the importance of selecting investments that have the greatest potential for long-term growth.

The bottom line

Investing in a Roth IRA can be a great way to accumulate tax-free retirement income. However, the key to that strategy is choosing investments for your Roth IRA that have the potential to grow significantly over time. Doing so will ensure that you take maximum advantage of the tax benefits Roth IRAs offer.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Peter Fleming
Peter Fleming |

Peter Fleming is a writer at MagnifyMoney. You can email Peter here