Fidelity Investments and TD Ameritrade are two of the most popular online discount brokerages, and each regularly scores well in Bankrate reviews of the best brokers.
In fact, Fidelity and TD Ameritrade both earned the highest overall marks in our 2021 review of major online brokers. Fidelity is a great choice for customer support, research and its no-fee fund offerings, while TD Ameritrade stands out for its trading platform, wide selection of tradable securities and customer service. (It’s worth noting that TD Ameritrade has been purchased by Charles Schwab and will be integrated into that broker’s platform either in 2022 or the year following.)
So which is better for you? That depends not only on what the broker offers but also on what features you need. Here’s how the brokerages compare on some of the most common features.
|Stocks and ETF commissions||$0||$0|
|Options commissions||$0.65 per contract||$0.65 per contract|
|Tradable securities||Stocks, ETFs, bonds, mutual funds, options||Stocks, ETFs, bonds, mutual funds, options, futures, forex, cryptocurrency|
|Account fees||No annual, activity or transfer-out fee||$75 transfer-out fee|
|No-transaction-fee mutual funds||3,400+||4,000+|
|Account types||Individual and joint taxable, IRAs, small business (SEP IRA, solo 401(k), etc.), custodial, 529, HSA, managed portfolio, charitable and trust, among others||Individual and joint taxable, IRAs, small business (SEP IRA, solo 401(k), etc.), custodial, 529, managed portfolio and trust, among others|
|Mobile app||Fidelity Mobile app on the Apple App Store, Google Play Store and Amazon||TD Ameritrade Mobile and thinkorswim Mobile apps on the Apple App Store and Google Play Store|
|Fractional shares||For purchases and dividend reinvestment||For dividend reinvestment only|
|Customer support||Phone 24/7 availability, chat, email, 190+ branches||Phone 24/7 availability, Facebook and Twitter messaging, 175+ branches|
Across a number of areas relating to cost, Fidelity and TD Ameritrade are neck and neck. Both charge zero commission for stock and ETF trades, while options trades come in at $0.65 per contract, right at the industry standard today.
Both brokers offer thousands of mutual funds without a transaction fee. While TD Ameritrade offers more such funds, Fidelity’s selection is easily wide enough to find what you’re looking for. It’s like going to a buffet: extra choices only matter if you’re actually going to partake of them.
Both brokers are friendly to the thrifty, with limited account costs. However, you won’t notice any key differences until you go to close your account, when TD Ameritrade charges $75 for a transfer out, while Fidelity charges nothing. So Fidelity gets a slight edge in this area.
You can’t get any better than no account minimum, and both TD Ameritrade and Fidelity allow new investors to get started with nothing, making them among the top picks for new investors.
Fidelity and TD Ameritrade have some clear differences in the types of securities they allow you to invest in, and the latter is the clear winner in terms of sheer numbers.
While Fidelity offers the standard range (stocks, ETFs, bonds, mutual funds and options), TD Ameritrade ups the ante with forex, futures and cryptocurrency trading, too. Those additional choices may appeal to traders looking to get into more esoteric corners of the market.
That said, Fidelity’s selection will work well for nearly all investors looking for attractive returns.
Fidelity and TD Ameritrade offer a similarly wide selection of account types, so you can grow your relationship with the broker as your needs change.
Both offer standard account types such as individual and joint taxable accounts, IRA accounts (Roth IRA, traditional IRA and rollovers), small business retirement accounts (SEP IRA, SIMPLE IRA and solo 401(k)) and 529 accounts. Each offers managed portfolios and trust accounts. Fidelity also offers HSA accounts, which some individuals actually use as retirement accounts.
Both brokers offer a huge variety of account types, and it’s going to be hard to go wrong here.
Fidelity separates itself from TD Ameritrade in terms of fractional shares. While TD Ameritrade allows you to reinvest only your dividends into partial shares, Fidelity allows that feature as well as purchases of partial shares. In fact, you can buy more than 7,000 stocks and ETFs with Fidelity’s fractional program, among the highest levels of all brokers.
In terms of customer support, TD Ameritrade and Fidelity offer access in three key channels: phone, chat or messaging and in-branch. Both offer 24/7 customer support by phone, while chat support may occur through a third party such as Facebook or Twitter. Both brokers also offer a comparable number of branches, where you can seek out in-person assistance, if you need it.
Naturally, these brokers are not comparable across every single dimension. Each offers some benefits that the other doesn’t. In the case of TD Ameritrade, since it typically caters to advanced traders, it offers simulated trading through what it calls paperMoney. You’ll start with $100,000 in virtual money and a margin account and you’ll be able to use the broker’s robust thinkorswim trading platform, one of its top features, to hone your skills or see how you’ll fare.
For mutual fund fans, Fidelity offers its ZERO collection of funds without an expense ratio. It’s the first company to offer no-fee mutual funds, though you needn’t be a customer of the brokerage to buy them. A Fidelity ZERO fund ranks in our list of best index funds.
Fidelity and TD Ameritrade are exceptional brokers almost any way you slice it, offering similar features and being investor-friendly. So what’s likely to separate one from the other is what you need in a broker. For example, if you need fractional purchases, Fidelity would likely be a better choice, while those needing a simulator and robust trading platform may find TD Ameritrade a better fit. That said, opening multiple brokerage accounts can have some key benefits, too.