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Investing

Vanguard Review 2019

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

Vanguard has made its reputation by lowering the cost of investing. The company touts the fact that the average expense ratio for its Mutual funds and ETFs is 82% less than the industry average. This means more earnings for investors, which is especially good for long-term investors who have decades to let their money grow. Whether you are investing for retirement or long-term wealth accumulation, Vanguard offers one of the lowest-cost and time-tested methods for consistently growing with the market.

However, since the investment philosophy that guides Vanguard’s business is to minimize the cost of investing and maintain long-term discipline, active traders may find that Vanguard is not right for them. You will not find trading tools or platforms on Vanguard, and the commission schedule is onerous for most investors who make more than 25 trades per year. In addition, if you need more hands-on advice, you must have $50,000 invested to make use of their financial advisor service.

Vanguard
Visit VanguardSecuredon Vanguard’s secure site
The bottom line: Vanguard provides excellent value to passive investors who are happy to allow their money to grow with the market, but the brokerage is not set up logistically or financially for very active traders, nor does it provide financial advising for low-volume investors.

  • Low investment fees preserve investment gains.
  • Passive investment in index funds is encouraged.
  • Active trading is difficult and expensive on this platform.

Who should consider Vanguard

Vanguard really shines as a brokerage for investors building retirement portfolios. It encourages investors to choose from a number of investment options that mitigate potential risk, such as index funds. These funds are set up to track the performance of a specific market index, such as the S&P 500. Such funds do not need an active manager, which keeps the fees low, and the investor can expect to do about as well as the market overall.

Anyone who is investing for retirement may be well-served by the basic strategy behind index funds, which were invented by Vanguard’s founder, Jack Bogle. A retirement investor’s funds will grow in a relatively low-risk and low-cost investment that will benefit from the long time frame that passive index fund investing requires.

Vanguard’s wide variety of accounts and investment options includes Stocks, Bonds, exchange-traded funds (ETFs), and Mutual funds. The company also has developed its own branded Mutual funds and ETFs.

Vanguard fees and features

Stock trading fees
  • $7 per trade for the first 25 trades per year, $20 per trade thereafter for accounts with less than $50,000
  • $7 per trade for accounts with $50,000 to $500,000
  • $2 per trade for accounts with $500,000 to $1M
  • $0 per trade for accounts with $1M to $5M for the first 25 trades per year, $2 per trade thereafter
  • $0 per trade for accounts with more than $5M for 100 trades per year, $2 per trade thereafter
Amount minimum to open account
  • $1,000 for Vanguard Target Retirement Funds and Vanguard STAR® Funds; $3,000 for most other Vanguard funds
Tradable securities
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
  • Forex
  • Crypto-currency
Account fees (annual, transfer, inactivity)
  • $20 annual fee for account balances below $10,000; waived if you have at least $10,000 in Vanguard funds or ETFs or sign up for statement e-delivery
  • $0 full account transfer fee
  • $0 partial account transfer fee
Commission-free ETFs offered
Mutual funds (no transaction fee) offered
Offers automated portfolio/robo-advisor
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • 529 Plan
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
Ease of use
Mobile appiOS, Android, Fire OS
Customer supportPhone, Email
Research resources
  • SEC filings
  • Mutual fund reports

Strengths of Vanguard

  • Low investment fees: Though it may seem like no big deal to pay a 1% investment or management fee, this cost compounds in the same way interest does. Vanguard reported that the average expense ratio across the entire fund industry (excluding Vanguard) was 0.62% in 2017, or $62 for every $10,000 invested. Meanwhile, Vanguard’s expense ratio during that same time was 0.11%, or $11 for every $10,000 invested, which is 82% lower than the average.
  • Fund performance: Investors with Vanguard can feel confident about the firm’s track record of success, as 89% of Vanguard’s funds outperformed their peers over the 10-year period ending Sept. 30, 2018. Combine this high performance with the low fees, and Vanguard investors can reasonably expect their portfolios to do quite well over time.
  • Retirement education: Vanguard offers a great deal of high-quality and well-researched educational information and tools for investors who are preparing for retirement. With the website, you can determine the best investment options for retirement, decide how to prioritize your financial goals, predict when you can afford to retire, estimate expenses in retirement and weigh the benefits of various tax strategies.
  • Vanguard Personal Advisor Services: Investors who would like some expert guidance can partner with a financial professional using Vanguard Personal Advisor Services. The advisor will help you articulate your financial goals and develop a personalized financial and investing plan for you. Your advisor also will be available for questions or support as you move forward with your investment plan. Only investors with $50,000 or more under management may access Vanguard Personal Advisor Services, and there is a 0.30% annual fee for the service.

Drawbacks of Vanguard

  • Active Trading: Vanguard is not set up for active trading. This is in part because active traders are not Vanguard’s target clientele. However, the lack of simple trading tools or platforms and the fact that the cost per trade goes up after making a certain number of trades per year for some accounts mean Vanguard is effectively discouraging its customers from doing active trading. While this is not a problem for investors who are trying to prepare for retirement, investors who would like to have a one-stop shop for passive and active investing will have to look elsewhere.
  • Advisor services may be out of reach: Vanguard’s Personal Advisor Service requires investors to have at least $50,000 invested, which means beginning investors or those with fewer assets in their accounts may be shut out of getting personalized advice. This could be a problem, as it is the new investors who are most likely to need such personalized service to get on the right track.

Is Vanguard safe?

While every investment carries some inherent risk, you can rest assured that your money is as safe as possible invested in Vanguard funds. First, Vanguard is a member of the Securities Investor Protection Corporation (SIPC), which protects individual investor assets up to $500,000. Vanguard provides additional coverage for eligible customers through Lloyd’s of London.

In addition, Vanguard uses multiple security measures to ensure that only the customer (and no one else) has access to his or her accounts.

Final thoughts

Vanguard is an excellent choice for mid-level to high-level investors who want set-it-and-forget-it investments that will provide a stable retirement or otherwise grow wealth. But that does not mean it is the right choice for everyone.

Anyone who wants to do active trading may find Vanguard to be limiting and may be happier with a brokerage like Ally Invest or TD Ameritrade. Both of those brokerages are better set up to allow active trading and in fact encourage the practice by reducing trading fees after you have completed a certain number of trades per year. Vanguard, on the other hand, increases its trading fees after you have made a certain number of trades per year for some accounts.

In addition, younger investors with less money to work with may find that they can’t get the kind of personalized service they need to make the best choices with their money. For such investors, Betterment, with its focus on improving investor behavior and providing personal financial advice, may be a better fit.

Ultimately, Vanguard does what it does very well for its target clientele. If you are outside of that target, it may not work for you.

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7

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.

Emily Guy Birken
Emily Guy Birken |

Emily Guy Birken is a writer at MagnifyMoney. You can email Emily here

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Investing

Vanguard vs Fidelity: Which Broker Should You Choose?

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

When it comes to building long-term wealth, investing in markets is the key to growing your money. Vanguard and Fidelity are two brokerage giants you’ve probably heard of. In fact, we have ranked both companies among our top picks for the best online brokerages. While it may seem difficult to choose between Vanguard and Fidelity, we’ve broken down each company’s fees, account minimums and special features to help you decide which broker is best for your needs.

For beginner investors who don’t have a lot of money stashed away, Fidelity is the clear winner since it has no account minimum. Established investors who want more personalized attention or who want to invest their money in futures may prefer Vanguard. Read on to find out more about these brokers and how they differ from one another.

Vanguard vs. Fidelity: Feature comparison

VanguardFidelity
Stock trading fees
  • $7 per trade for the first 25 trades per year, $20 per trade thereafter for accounts with less than $50,000
  • $7 per trade for accounts with $50,000 to $500,000
  • $7 per trade for accounts with $50,000 to $500,000
  • $2 per trade for accounts with $500,000 to $1M
  • $0 per trade for accounts with $1M to $5M for the first 25 trades per year, $2 per trade thereafter
  • $0 per trade for accounts with more than $5M for 100 trades per year, $2 per trade thereafter
  • $0 per trade for accounts with $1M to $5M for the first 25 trades per year, $2 per trade thereafter
  • $0 per trade for accounts with more than $5M for 100 trades per year, $2 per trade thereafter
  • $4.95 per trade
Amount minimum to open account
  • $1,000 for Vanguard Target Retirement Funds and Vanguard STAR® Funds; $3,000 for most other Vanguard funds
  • $0
Tradable securities
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
  • Forex
  • Crypto-currency
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
  • Futures / commodities
  • Forex
  • Crypto-currency
Account fees (annual, transfer, inactivity)
  • $20 annual fee for account balances below $10,000; waived if you have at least $10,000 in Vanguard funds or ETFs or sign up for statement e-delivery
  • $0 full account transfer fee
  • $0 partial account transfer fee
  • $0 annual fee
  • $0 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
  • 529 Plan
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • 529 Plan
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • 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 appiOS, Android, Fire OSiOS, Android, Fire OS
Customer supportPhone, EmailPhone, 24/7 live support, Chat, Email, 190branch locations
Research resources
  • SEC filings
  • Mutual fund reports
  • SEC filings
  • Mutual fund reports
  • Earnings press releases

Vanguard vs. Fidelity: Fees & account minimums

When deciding between Vanguard and Fidelity, it’s important to understand the companies’ different brokerage account options, fees, and account minimums.

Fidelity offers three investment management services:

  1. Fidelity Go: Fidelity Go is a robo-advisor program featuring an annual management fee of 0.35% of your account balance and a $0 minimum to open an account.
  2. Fidelity Personalized Planning and Advice: Fidelity Personalized Planning and Advice is a hybrid robo-advisor that also gives you access to a team of advisors for coaching, for a 0.50% annual management fee. You need to have at least $25,000 in total minimum investments across all Fidelity accounts to be enrolled in this service.
  3. Portfolio Advisory Services: Portfolio Advisory Services gives you access to professionally managed investment accounts, with annual management fees ranging from 0.50% to 1.50%, depending on your investment balance. There is a $50,000 minimum investment.

Vanguard offers four options, including:

  1. Target Retirement Funds: For novice investors or those who prefer a hands-off approach, you can invest in a Vanguard Retirement Fund based on your targeted retirement date. The account is automatically rebalanced as you approach your retirement date, so you don’t have to worry about manually shifting your investments from stocks to bonds. You’ll need to have at least $1,000 to get started. The average expense ratio on Target Retirement Funds is 0.12%.
  2. Vanguard STAR Fund: The Vanguard STAR Fund is an option that invests 60% of your money in stocks, and 40% in bonds. It allows you to instantly diversify your portfolio across asset classes. To invest in a STAR Fund, you need a minimum of $1,000. STAR Funds have an expense ratio of 0.31%.
  3. Actively-managed funds: For more seasoned investors, you can opt for an actively-managed fund where a portfolio manager hand-picks the fund’s investments. You’ll need a minimum of $50,000 to invest in most actively-managed funds. The expense ratio is dependent on the fund; expense ratios average 0.12%.
  4. Personal Advisor Services: Vanguard Personal Advisor Services is a hybrid robo-advisor option with a 0.30% annual advisory fee for accounts with $5 million or less in assets. To get started, you need to have at least $50,000 in managed assets with Vanguard. Individual investment accounts, IRAs, trust accounts, and Vanguard Variable Annuity accounts all count toward the $50,000 minimum.

You may also be subject to an annual service fee with Vanguard. For example, brokerage and mutual fund-only accounts have a $20 annual fee.

When it comes to transaction fees, Fidelity is much simpler than Vanguard. Fidelity charges a flat transaction fee of $4.95 for any online trades that you make. With Vanguard, your fee is dependent on the kind of security you’re trading and whether you do it by phone or online. For example, you’ll pay $0 to trade ETFs online, but you’ll be subject to a $25 fee per trade if you complete the transaction over the phone.

In terms of expense ratios, Vanguard’s average expense ratio is 0.10% — that’s 83% less than the industry average. However, Fidelity reported that it offers lower expense ratios than other major companies, including Vanguard. Fidelity recently launched four new zero expense ratio index mutual funds that have no minimum deposit requirements.

Vanguard vs. Fidelity: Tradable securities

While both Vanguard and Fidelity allow you to invest in stocks, bonds and CDs, there are other security options to consider:

  • Mutual funds: Fidelity offers over 10,000 professionally managed mutual funds. By contrast, Vanguard allows you to invest in its own mutual funds, or thousands of outside mutual funds. As of August 2019, there are 129 Vanguard-exclusive mutual funds available.
  • Options trading: With options, you can sell securities at a preset price over a set period of time on the options market. Fidelity allows you to invest in the options market, and you can get up to 500 commission free trades over the course of two years. Like Fidelity, Vanguard also allows you to invest in the options market. However, the process to get started is more involved. You’ll have to submit an application and include information about your finances, investment experience and your objectives. Also, your application could be denied.
  • Exchange Traded Funds (ETFs): Fidelity has over 500 commision-free ETFs. Vanguard offers commission-free trading on 1,800 ETFs from the company, and about 100 from outside companies.
  • Foreign exchange trading: If you want to invest in the foreign exchange market, you can do so by signing up with Fidelity FOREX, LLC, a Fidelity subsidiary. You’ll get access to currencies from over 35 countries, and you can transfer money from your brokerage accounts. By contrast, Vanguard doesn’t offer a foreign exchange option.
  • Futures: As of August 2019, Fidelity doesn’t offer futures trading. Vanguard recently launched the Vanguard Commodity Strategy Fund, an actively-managed commodity futures fund.
  • Cryptocurrency: Neither Fidelity or Vanguard allow you to invest in cryptocurrency.

Vanguard vs. Fidelity: Special features

  • Trading platforms: With Fidelity, you can get access to Active Trader Pro if you make at least 36 trades within a 12-month period. This tool gives you real-time insights, actionable alerts, and detailed analytics so you can make informed investing decisions.
  • Investor centers: If you want in-person advice, Fidelity operates over 140 brick-and-mortar investor centers throughout the United States. You can meet with an advisor to get financial and investment guidance, including one-on-one retirement planning or college planning services.
  • Advisor access: With Vanguard Personal Advisor Services, you can schedule an appointment and talk with an advisor via phone, email or chat.
  • Comprehensive assistance: Vanguard Personal Advisor Services doesn’t just offer help with your investments. You can also contact an advisor for guidance on Social Security, health care funding or the right approach for withdrawing from your retirement savings.
  • Robo-advisors: Both Vanguard and Fidelity offer robo-advisor options. However, Fidelity’s program — Fidelity Go — has a $0 minimum to get started, whereas Vanguard Personal Advisor Services has a $50,000 minimum.

Vanguard advantages

  • Investment options: Vanguard’s funds have low expense ratios and excellent past performance records. You can choose index funds or actively managed funds so you can maximize your investment.
  • Complete financial planning: Vanguard’s programs will take into account your outside investments, such as a company-offered 401(k), when building your personalized financial plan. Taking those other accounts into consideration will ensure your investments are properly balanced for your goals.
  • Actively managed funds: For seasoned investors who have more assets, opting for a Vanguard actively-managed fund can be a smart move. The company offers more than 70 U.S. based actively-managed funds, including a range of stock, bond and balanced funds.
  • Past performance: Vanguard has an outstanding record. The company boasts that 88% of its funds have performed better than peer-group averages over the past decade.

Fidelity advantages

  • Low account minimums: Vanguard has account minimums ranging from $1,000 to $3,000, depending on the account, which makes it harder for new investors to get started. Fidelity allows you to get started with just $0, making it a great choice for beginners.
  • Technology: For those who prefer online trading or using an app, Fidelity is more technology-friendly. And, the firm’s Active Trader Pro platform is a powerful resource.
  • Flat transaction fees: Unlike Vanguard, which has different transaction fees depending on the type of security and how you complete trades, Fidelity has a flat $4.95 fee, so there are no surprises.
  • Investor education: Fidelity has a robust library of investor education resources, including articles and videos, so you can become better informed on investing topics.

Vanguard vs Fidelity: Which is best for you?

Vanguard and Fidelity offer excellent investment options for investors of every experience level, allowing you to grow your money with confidence. When looking at which company is best for you, it’s important to consider your starting point and the level of attention you think you’ll need.

With Fidelity, you can get started with $0 and can take advantage of flat transaction fees and its educational tools. And, if you do need to speak to someone in person, you can meet with an advisor at one of its investor centers.

If you’re a more established investor with a significant amount of assets, Vanguard may be a better choice for you. You can take advantage of Vanguard’s low cost funds and its low fees, and get access to comprehensive financial planning.

If you’re researching all of your investment options, make sure you check out the best online stock brokers of 2019.

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.

Kat Tretina
Kat Tretina |

Kat Tretina is a writer at MagnifyMoney. You can email Kat here

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Investing

E*Trade vs. TD Ameritrade

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. 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, E-Trade is less expensive for high volume traders who do more than 30 trades per quarter. 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-TradeTD Ameritrade
Current promotions

For customers who deposit at least $10,000, E-Trade offers up to 500 commission-free trades for each stock or options trade executed within 60 days of funds becoming available.
For new accounts with a deposit of at least $25,000, you'll also receive a cash bonus, which can range from $200 to $2,500 depending on the amount deposited. 

Deposit $3,000 or more and get 60 days of commission-free online equity, ETF and option trades.
Stock trading fees
  • $6.95 per trade (less than 30 trades per quarter)
  • $4.95 per trade (more than 30 trades per quarter)
  • $6.95per trade
Amount minimum 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 appiOS, AndroidiOS, Android, Windows phone
Customer supportPhone, 24/7 live support, Chat, Email, 30 branch locationsPhone, 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.

E-Trade and TD Ameritrade charge investors a flat fee for each stock trade. At E-Trade, the charge is $6.95 a trade for the first 30 transactions in a quarter. When you make more than 30 transactions per quarter, E-Trade drops its commission to $4.95 per trade. TD Ameritrade charges a flat $6.95 commission per trade. This makes E-Trade less expensive for high volume traders. 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 0.90% 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 the firm manages.

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. E-Trade and TD Ameritrade both currently offer commission-free stock and options trading. At E-Trade you get $600 (and up to 500 free trades) for a $10,000 deposit. At TD Ameritrade you must deposit at least $3,000 to get 60 days of free trades. In addition, you get $100 if you deposit $25,000, $300 if you deposit $100,000 and $600 if you deposit $250,000. Offers vary over time.

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 at regular commission rates plus an additional fee of $0.75, which drops to $0.50 with 30 or more trades per quarter. TD Ameritrade permits investors to trade options for $6.95 plus $0.75 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 two 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.

TD Ameritrade 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 stock trader, after you do 30 trades in a quarter, the cost per trade drops to $4.95 from $6.95. TD Ameritrade offers only a flat fee of $6.95 per trade.
  • 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?

When the time comes to choose between E-Trade and TD Ameritrade, E-Trade is likely to appeal to high volume traders, since the cost per trade drops to $4.95 after 30 trades in a quarter. Similar price cuts are available for options as well. 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.

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Peter Fleming
Peter Fleming |

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