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Vanguard vs. TD Ameritrade: Which Broker Is Right for You?

Updated
Matt Frankel, CFP®
David Chang, ChFC®, CLU®
By: Matt Frankel, CFP®
Matt Frankel, CFP®
Matt Frankel, CFP®
Writer, Analyst

Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.

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 and  David Chang, ChFC®, CLU®
David Chang, ChFC®, CLU®
David Chang, ChFC®, CLU®
Writer, Consultant

David S. Chang, ChFC®, CLU® is an award-winning entrepreneur, keynote speaker, author, and consultant. He has over two decades of experience in the wealth management space and has been featured in dozens of news, radio, and podcast programs nationwide. He currently works as Head of IoT for the West Region of a Fortune 200 company. He is a graduate of the United States Military Academy at West Point and currently a Lieutenant Colonel in the California Army National Guard. He is an East-West Graduate Degree Fellow and has an MBA from the UCLA Anderson School of Management.

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Ashley Maready
Check IconFact Checked Ashley Maready
Ashley Maready
Ashley Maready
Writer and Editor

Ashley Maready is a former history museum professional who made the leap to digital content writing and editing in 2021. She has a BA in History and Philosophy from Hood College and an MA in Applied History from Shippensburg University. Ashley loves creating content for the public and learning new things so she can teach others, whether it's information about salt mining, canal mules, or personal finance.

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Editor's Note: This page may be out of date

TD Ameritrade has been acquired by Charles Schwab, and the company expects all accounts to be transitioned by the end of 2024. We've kept this page covering TD Ameritrade for historical purposes. For the most up-to-date information on Charles Schwab accounts, please see our corresponding Charles Schwab page.

Vanguard vs. Charles Schwab

Vanguard and TD Ameritrade are both solid places to buy and sell stocks and other investments. However, there isn't a perfect broker that will work for everyone. Both of these brokers have very different features and capabilities that may appeal to certain types of investors.

In this review, we'll look at Vanguard vs. TD Ameritrade head to head. The goal is to get a sense of each broker's strengths and weaknesses so you can determine which (if either) meets your investment needs.

Vanguard vs. TD Ameritrade: At a glance

Offer


Rating
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Rating image, 5.0 out of 5 stars.
5.0/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Commissions $0 online; $25 broker-assisted fee for some phone trades of stocks and ETFs from other companies (Less than $1 million)

 $0 for online stock and commission-free ETFs; $5.00 for Interactive Voice Response (IVR) phone system trades; $25.00 for broker-assisted trades
Account Minimum $0 $0
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Vanguard vs. TD Ameritrade: Commissions & fees

Like most brokers, both Vanguard and TD Ameritrade offer $0 commission stock and ETF trades, but that's where the similarities end.

For starters, TD Ameritrade is a significantly cheaper place to buy and sell options, which certainly makes sense. After all, Vanguard is designed for long-term, buy-and-hold investing. On the other hand, TD Ameritrade offers the thinkorswim® active trading platform, which was specifically designed with options trading in mind.

When it comes to mutual funds, Vanguard is typically the better choice. Both brokers have thousands of funds on their no-transaction-fee (NTF) lists. But, for funds not on the list, Vanguard's mutual fund commission is less than half of TD Ameritrade's standard rate. Plus, Vanguard's own low-cost index funds trade commission free through the company's brokerage. It's very rare to find Vanguard funds on an NTF basis anywhere else.

Finally, Vanguard is one of the few brokers that doesn't charge a fee to transfer an account externally. TD Ameritrade charges for this service. But on the other hand, Vanguard is one of the only major brokers to charge an annual maintenance fee. However, it can be avoided fairly easily (for example, by keeping over $10,000 in Vanguard funds or by signing up for electronic delivery of documents).

Vanguard TD Ameritrade
Stock & ETF commissions $0 online,
$0 by phone, $25 for broker-assisted fee for ETF trades from other companies (Less than $1 million) 		$0 for online stock trades and commission-free ETF,s
$5.00 for Interactive Voice Response (IVR) phone system trades,
$25.00 for broker-assisted trades
Options commissions $0 + $1 per contract fee (less than $1 million),
$0 for first 25 trades; $0 + $1-per-contract fee thereafter ($1 million to $5 million), $0 for first 100 trades; $0 + $1-per-contract fee thereafter ($5 million or more) 		$0.65 per contract,
$5.00 + $0.65 fee per contract for Interactive Voice Response (IVR) phone system trades,
$25.00 + $0.65 fee per contract for broker-assisted trades
Crypto commissions Not available Not available
Mutual fund commissions $0 online, $0 by phone,
$25 for broker-assisted fee for mutual trades from other companies (Less than $1 million),
$20 per online trade for transaction-fee mutual funds (less than $1 million) 		$0 for no-transaction-fee (NTF) mutual funds,
$49.95 or $74.95 for buys and $0 for sells for no-load mutual funds,
$0 for load mutual funds
Account transfer fee $0 $75 full transfer,
$0 partial transfer
Account maintenance fee $25 (waived for many) $0
Data sources: Vanguard and TD Ameritrade.

Vanguard vs. TD Ameritrade: Investments available

Both platforms offer stocks, ETFs, options, mutual funds, and bond investing. Vanguard doesn't specifically quantify how many funds are available through its platform, only specifying that it's in the thousands. But to be fair, the exact number offered by any specific brokerage changes over time.

Neither broker offers the ability to buy fractional shares at this time. However, it's worth noting that TD Ameritrade has been acquired by Schwab, which does offer this feature. So, it's fair to assume that it's coming sooner rather than later. It's also important to mention that neither of these brokers offer cryptocurrency trading. So, if that's important to you, it may be a good idea to look elsewhere.

TD Ameritrade is the only one of the two that offers futures and foreign exchange (forex) trading. Keep this in mind if either investment type is interesting to you.

Vanguard TD Ameritrade
Stocks and ETFs Yes Yes
Fractional shares No No
Options Yes Yes
Mutual funds Yes, thousands available Yes, about 13,000 total
CDs Yes Yes
Bonds Yes Yes
Futures No Yes
Crypto No No
Currencies No Yes
Data sources: Vanguard and TD Ameritrade.

Alternatives to Consider

We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.

Account Fees Account Minimum
Logo for SoFi Active Investing
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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$0 for stocks, $0 for options contracts $0
Open Account for SoFi Active Investing
Logo for Robinhood
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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$0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold $0
Open Account for Robinhood
Logo for E*TRADE
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Commission-free; other fees apply $0
Open Account for E*TRADE

Vanguard vs. TD Ameritrade: Account types available

Both Vanguard and TD Ameritrade are on equal footing when it comes to the types of accounts offered. Both offer pretty much any type of account an individual investor or small business would need to open. They both even offer several specialty account types including trusts, business accounts, and more.

Vanguard TD Ameritrade
Taxable brokerage Yes Yes
Joint tenant Yes Yes
Margin Yes Yes
Robo-advisor Yes, Vanguard Digital Advisor No longer offered, must use Schwab Intelligent Portfolios
Traditional IRA Yes Yes
Roth IRA Yes Yes
Other IRA Yes Yes
Custodial Yes Yes
Checking No No
Savings No No
Credit card No No
Data sources: Vanguard and TD Ameritrade.

Vanguard vs. TD Ameritrade: Mobile app and trading platforms

For investors who simply want the ability to occasionally buy and sell stocks, ETFs, and mutual funds, either broker's platform should be sufficient.

Vanguard's is certainly the more "low-frills" of the two, and that's by design. It isn't intended for investors who plan to use complicated trading strategies or who frequently move in and out of positions. It is designed to allow long-term investors to gradually build a portfolio.

The web-based trading platform has tons of features that long-term investors will likely find useful, such as research reports and educational tools. Vanguard also has a highly-rated mobile app that allows investors to place trades and check their portfolios on the go.

On the other hand, TD Ameritrade offers something for all types of investors. Its platform is designed for everyone from the occasional buy-and-hold stock buyer to the most active traders. It offers a web-based platform that makes it easy to place basic trades, view stock research, and more. It offers the highly-rated thinkorswim® active trader platform that has functionality that active traders like to see. This includes offerings like backtesting strategies, advanced quote and charting features, and a fully-customizable view.

In addition, TD Ameritrade offers two different mobile apps. There's the TD Ameritrade Mobile app, which is roughly the equivalent of its desktop platform. There's also a mobile version of its thinkorswim® platform. Both are highly rated on the App Store and Google.

In a nutshell, Vanguard's trading platforms should be fine for most investors. Serious traders will likely find TD Ameritrade to be a better fit.

Final take

As mentioned earlier, there's no such thing as a perfect brokerage for everyone, and neither of these are an exception. Vanguard is an especially good fit for long-term investors who plan to use mutual funds as a cornerstone of their investment strategy, but isn't a great choice for active traders and investors who frequently buy and sell positions.

On the other hand, TD Ameritrade offers features and platforms for investors of all degrees of active or passive strategies, and is the clear winner for traders. However, TD Ameritrade accounts are being transitioned to Schwab thanks to the merger, along with its thinkorswim® platform. If you are considering opening an account at this brokerage, it is recommended to open it at Schwab since TD Ameritrade accounts will be automatically transferred in the future. The thinkorswim® platform will be accessible at Schwab from 2023 onward.

Both of these are solid brokers, and the best stock broker for you depends on which has the platform, features, investment choices, and fees that are a better fit for your personal investment goals.

FAQs

  • TD Ameritrade accounts will be moved to Schwab accounts Labor Day weekend 2023 (Sept. 2-5). For more details, you can visit the TD Ameritrade or Schwab FAQ.

  • Schwab has decided to adopt thinkorswim®. TD Ameritrade account holders can continue to trade and invest using it until thinkorswim® moves to Schwab later in 2023.

  • Yes, you can still open an account at TD Ameritrade. However, since all accounts at TD will be eventually transitioned to Schwab, it makes sense to open an account at Schwab.