TD Ameritrade vs. Robinhood

If you're searching for an online broker that is reliable and user-friendly for trading stocks, forex, options and beyond, this comprehensive comparison of TD Ameritrade vs. Robinhood is a must-read. This detailed article examines both brokers across multiple factors to help you determine which one best aligns with your individual needs and preferences.

TD Ameritrade vs. Robinhood: Overview

Who is TD Ameritrade?

TD Ameritrade is one of the U.S.'s largest and most established online brokers. It was founded in 1975 and has over 11 million clients and $1.3 trillion in assets under management. TD Ameritrade offers a vast range of securities for trading, including stocks, exchange-traded funds (ETFs), mutual funds, options, futures, forex, bonds and cryptocurrencies. Some of the most noteworthy features of TD Ameritrade include:

• No commissions on online stock, ETF and option trades 
• No account minimums or hidden fees 
• Access to four trading platforms: the web platform, thinkorswim (a desktop platform for advanced traders), Trade Architect (a web-based platform for intermediate traders) and Mobile Trader (a mobile app for trading on the go) 
• A rich selection of research and educational resources, such as articles, videos, webinars, courses, podcasts and live events 
• 24/7 customer service via phone, email, chat and social media.

Charles Schwab, a foremost financial services firm, announced its acquisition of TD Ameritrade for $26 billion in 2019.

Who is Robinhood?

Robinhood is an online broker launched in 2013 that gained popularity for its innovative approach. With over 13 million users and $62 billion in assets under management, Robinhood allows users to trade stocks, ETFs, options, cryptocurrencies and fractional shares. Some of the standout features of Robinhood include:

• Zero commissions on all trades
• No account minimums or maintenance fees
• A straightforward and intuitive mobile app that allows you to trade anytime and anywhere
• A social network feature that lets you follow other traders and see their portfolios and performance
• A cash management feature that enables you to earn interest on your uninvested cash and access it with a debit card

Comparing TD Ameritrade vs. Robinhood

Here's an in-depth comparison of the two brokers based on specific factors that affect your trading experience.

Pricing and Fees

TD Ameritrade charges $0 commissions for most online trades, including stocks and ETFs. However, it does charge $0.65 per contract for options trades and a $6.95 fee for online trades of over-the-counter (OTC) stocks. Broker-assisted mutual funds come with a $49.99 trade fee.

Robinhood offers commission-free trading for stocks, ETFs, options and cryptocurrencies without charging fees for OTC stocks or broker-assisted trades. The broker doesn't provide direct market data access, leading to potential delays or inaccurate prices. Robinhood doesn't offer price improvement, meaning you might not receive the best possible price for your trades.

Winner: Robinhood. If you are looking for a low-cost broker that does not charge commissions or fees. 

Usability

The ease of use of a broker’s platform and tools affect the overall user experience. TD Ameritrade offers various investment platforms and tools to cater to different levels of investors. Its web-based platform, Web Platform, is perfect for beginner investors with its simple and intuitive interface for researching, trading and managing portfolios. Its desktop platform, thinkorswim, for more advanced investors, offers customizable charts, technical analysis tools, backtesting and simulated trading.

Robinhood provides a web-based platform and mobile app that are user-friendly but limited in functionality and features. Robinhood offers no research or analysis tools, educational resources or customer support options. The platform only allows basic orders like market, limit and stop orders. Trading complex instruments such as options spreads or futures is not possible.

Winner: TD Ameritrade is a top choice for investors seeking a broker with various platforms and tools. But if you prefer a straightforward, no-frills platform for quick and easy trading, Robinhood is worth considering.

Education

Online brokers offer educational resources and guidance to enhance your investing skills. TD Ameritrade's education center is extensive, providing articles, videos, webinars, courses and events on various investment topics. Its social network, myTrade, connects you with other traders and experts. TD Ameritrade's robo-advisor, Essential Portfolios, creates and manages a diversified portfolio based on your goals and risk tolerance. 

Robinhood lacks educational resources, but its blog, Under the Hood, shares news and updates on products and features without providing investment advice or guidance.

Winner: TD Ameritrade. It has a wealth of educational resources and services to help you become a better investor.

Customer Support

TD Ameritrade has 24/7 customer service by phone, chat or email, as well as in-person consultations at 275+ U.S. branches. Its online community offers advice from experts and other users. In contrast, Robinhood's customer support is limited to email and chat during market hours and lacks phone support, physical locations and online community forums.

Winner: TD Ameritrade. It has a variety of ways to contact and communicate with its customer service team, as well as a network of branches and an online community.

Offerings

TD Ameritrade offers many investment options, including stocks, ETFs, options, futures, forex, mutual funds, bonds, CDs and annuities. It provides margin trading, cash management, retirement planning and portfolio analysis. 

Robinhood offers limited investment options, including stocks, ETFs, options and cryptocurrencies. Margin trading, cash management, retirement planning or portfolio analysis are unavailable.

Winner: TD Ameritrade. It has a more comprehensive and diverse offering than Robinhood.

Mobile App

TD Ameritrade offers two mobile apps: TD Ameritrade mobile for simplified trading and account management and thinkorswim mobile for advanced features like charts and scanners. 

Robinhood's single mobile app is similar to its web platform and allows for trading and monitoring accounts on the go, but it lacks additional tools and features.

Winner: TD Ameritrade. It has two mobile apps that cater to different levels of investors and provide more functionality and capabilities than Robinhood's mobile app.

Account Types

TD Ameritrade has various account options, such as individual, joint, IRA, trust, custodial, corporate and partnership accounts. Most account types don't require a minimum deposit or balance and come with free access to the platforms and tools.

Robinhood only offers one account type: an individual taxable brokerage account. While it doesn't require a minimum deposit or balance, account holders don't receive free access to platforms or tools.

Winner: TD Ameritrade. It has more account types than Robinhood and has no minimum requirements for most of them.

TD Ameritrade vs. Robinhood: Which Broker is Right for You?

When choosing an online broker, TD Ameritrade and Robinhood are options with unique strengths and weaknesses. TD Ameritrade is an ideal choice for traders in terms of comprehensive and diverse offerings of securities and trading platforms and reliable and responsive customer support. If low-cost trading and a user-friendly mobile app with social network features are what you are looking for, Robinhood may be more suitable. Ultimately, the decision depends on your trading goals, preferences and budget. It may be worth trying both brokers to see which one works best for you.

Frequently Asked Questions