Interactive Brokers and TD Ameritrade are two top players that favours intuitiveness and offer full support to their clients for low to no-costs.
But which is better? In this article, we will analyse the two brokers to assess which one can better fit your needs.
Overview of Interactive Brokers Broker & TD Ameritrade Broker
|Features||Interactive Brokers||TD Ameritrade|
|💰 Account Minimum||$0 for IBKR Lite accounts. $2,000 for IBKR Pro accounts ($100,000 for portfolio margin)||$0|
|💸 Commission Fees||$0 commission for online trades of US-listed stocks and ETFs on IBKR Lite accounts.||$0 commission for online trades of stocks, ETFs, and options. $0.65 per contract for options trades. Fees vary for other types of trades, deposits and withdrawals, wire transfers, broker-assisted trades, and regulatory fees.|
|💼 Investment Options||Stocks, ETFs, options, futures, forex, bonds, mutual funds, hedge funds, structured products, metals, and more.||Stocks, ETFs, options, bonds, mutual funds, futures, forex, annuities, and more.|
|🤖 Robo-Advisor||Interactive Brokers offers a robo-advisor service called Interactive Advisors that provides automated investing based on your goals and risk tolerance.||TD Ameritrade offers a robo-advisor service called Essential Portfolios that provides automated investing based on your goals and risk tolerance.|
|📊 Research and Analysis||Interactive Brokers offers various research and analysis tools such as market insights, ratings, screeners, charts, alerts, reports, and more.||TD Ameritrade offers various research and analysis tools such as market insights, ratings, screeners, charts, alerts, reports, and more.|
|📱 Mobile App||Interactive Brokers has a mobile app that allows you to access your account, trade investments, check market data, use analysis tools, deposit checks, transfer funds, and more.||TD Ameritrade has a mobile app that allows you to access your account, trade investments, check market data, use analysis tools, deposit checks, transfer funds, and more.|
|🏦 Retirement Accounts||Interactive Brokers offers various retirement accounts such as traditional IRA, Roth IRA, rollover IRA, SEP-IRA, SIMPLE IRA, individual 401(k), and more.||TD Ameritrade offers various retirement accounts such as traditional IRA, Roth IRA, rollover IRA, SEP-IRA, SIMPLE IRA, individual 401(k), and more.|
|🎓 IRA Accounts||Interactive Brokers offers both traditional IRA and Roth IRA accounts that allow you to save for retirement with tax advantages.||TD Ameritrade offers both traditional IRA and Roth IRA accounts that allow you to save for retirement with tax advantages. You can open an IRA account with as little as $0 and enjoy low costs and no account fees.|
|📈 Trading Platform||Interactive Brokers has a trading platform that allows you to buy and sell investments online with ease and convenience.||TD Ameritrade has a trading platform that allows you to buy and sell investments online with ease and convenience. You can also use advanced tools such as real-time quotes, watchlists, alerts, conditional orders, thinkorswim®.|
|📞 Customer Service||24/7 customer service via phone, email, and chat, with dedicated support for IBKR Pro clients.||TD Ameritrade has a customer service team that is available to assist you with your account and investment needs.|
|📚 Educational Resources||A range of educational resources, including webinars, courses, and trading tools.||TD Ameritrade offers various educational resources such as articles, videos, podcasts, webinars, courses, events, and more to help you learn about investing and improve your financial literacy.|
|🌕 Fractional Shares||Interactive Brokers offers fractional shares trading that allows you to buy portions of stocks with as little as $1 through IBKR Stock Yield Enhancement Program. You can choose from any US-listed stock or ETF and trade fractional shares on any platform.||TD Ameritrade does not offer fractional shares trading at this time.|
|🌱 Socially Responsible||Interactive Brokers offers socially responsible investing options such as ESG (environmental, social, and governance) funds and ETFs that seek to align your investments with your values and beliefs. You can choose from a range of ESG funds and ETFs that cover different asset classes and regions.||TD Ameritrade offers socially responsible investing options such as ESG (environmental, social, and governance) funds and ETFs that seek to align your investments with your values and beliefs.|
|🌎 International Investing||Interactive Brokers offers international investing options such as global and international funds and ETFs that allow you to diversify your portfolio across different countries and regions. You can also trade directly on over 135 foreign exchanges in 33 countries and 23 currencies.||TD Ameritrade offers international investing options such as global and international funds and ETFs that allow you to diversify your portfolio across different countries and regions. You can also trade directly on foreign exchanges through TD Ameritrade Global Account™ or access international markets through American depositary receipts (ADRs) or Canadian stocks.|
|💳 Cash Management||Yes, Interactive Brokers offers cash management services such as a brokerage account with a linked bank account that acts as a holding place for money waiting to be invested or withdrawn from your account. You can also enjoy features such as unlimited ATM fee rebates, online bill pay, mobile deposit, debit card, and more.||TD Ameritrade offers cash management services such as a brokerage account with a linked bank account that acts as a holding place for money waiting to be invested or withdrawn from your account.|
|🔍 Margin Trading||Interactive Brokers offers margin trading services that allow you to borrow money from your brokerage account to buy securities on credit.||TD Ameritrade offers margin trading services that allow you to borrow money from your brokerage account to buy securities on credit. You need a minimum of $2,000 in marginable securities to open a margin account and you will be charged interest on any borrowed amount.|
|⚙️ Options Trading||Interactive Brokers offers options trading services that allow you to buy or sell contracts that give you the right to buy or sell an underlying asset at a specific price within a specific time period.||TD Ameritrade offers options trading services that allow you to buy or sell contracts that give you the right to buy or sell an underlying asset at a specific price within a specific time period. You can also access tools such as options chains, screeners, calculators, and more.|
|₿ Cryptocurrency Trading||Interactive Brokers offers cryptocurrency trading services that allow you to buy and sell Bitcoin, Bitcoin Cash, Ethereum and Litecoin through Paxos Trust Company.||TD Ameritrade does not offer cryptocurrency trading at this time.|
|🛡️ Account Security||Interactive Brokers offers account security features such as encryption technology, firewalls, secure login process, and biometric authentication.||Yes, TD Ameritrade offers account security features such as encryption technology, firewalls, secure login process, and biometric authentication. You can also enable two-factor authentication (2FA) to add an extra layer of protection to your account.|
|💹 Leverage||Interactive Brokers offers up to 4x day-trade buying power and 2x overnight buying power with a margin account.||TD Ameritrade offers up to 4x day-trade buying power and 2x overnight buying power with a margin account. You need to have a minimum of $2,000 in marginable securities to open a margin account and you will be charged interest on any borrowed amount.|
|⚖ Regulation||Interactive Brokers is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).||TD Ameritrade is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is also a member of the SIPC, which protects (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.|
Interactive Brokers vs. TD Ameritrade
Interactive Brokers and TD Ameritrade are two well-known online brokerage platforms that offer a range of investment products and services to retail investors, traders, and institutions. While both platforms have similarities, they also have distinct differences that can impact the investment experience. In this module, we’ll provide an overview of both platforms, compare their pros and cons, and help investors determine which one may be the better fit for their investment goals and preferences.
Interactive Brokers is a leading online brokerage platform offering a wide range of investment products and services to individual investors, traders, and institutions. In this module, we’ll discuss the pros and cons of Interactive Brokers in the context of a retail investor looking to open an account, and provide a comparison with another popular online broker, TD Ameritrade.
- Low Trading Fees: Interactive Brokers is known for its competitive fee structure, which can be especially beneficial for active traders looking to minimize costs.
- Extensive Investment Options: Interactive Brokers provides access to a vast array of investment products, including stocks, options, futures, forex, bonds, and more.
- Advanced Trading Tools: The platform offers sophisticated trading tools and features, such as customizable charting, research tools, and algorithmic trading capabilities.
- Complex Platform: Interactive Brokers’ advanced trading tools can be overwhelming for beginners and less experienced investors.
- Account Minimum: There is a $10,000 account minimum for individual accounts, which may be a barrier for some retail investors.
Regulation Information: Interactive Brokers is regulated by the Securities and Exchange Commission (SEC) in the United States, the Financial Conduct Authority (FCA) in the United Kingdom, and other major financial regulators around the world.
Interactive Brokers is a complex platform and account minimum may not be suitable for all retail investors. When compared to TD Ameritrade, Interactive Brokers offers lower trading fees and more advanced trading tools, but it may not be as UX/UI-friendly as TD Ameritrade.
TD Ameritrade is a well-established online brokerage platform offering a variety of investment products and services to individual investors, traders, and institutions. In this module, we’ll discuss the pros and cons of TD Ameritrade for retail investors considering opening an account, and provide a comparison with Interactive Brokers.
- No Account Minimum: TD Ameritrade does not require a minimum deposit to open an account, making it more accessible to retail investors with limited funds.
- User-Friendly Platform: TD Ameritrade’s platform is known for its ease of use and intuitive interface.
- Comprehensive Research Tools: TD Ameritrade offers a wide range of research and educational resources, such as market analysis, educational content, and expert insights.
- Higher Trading Fees: TD Ameritrade’s fees can be higher than those of Interactive Brokers, which might be a concern for cost-sensitive investors.
- Limited Advanced Trading Features: Compared to Interactive Brokers, TD Ameritrade’s platform may not offer as many advanced trading tools for experienced traders.
Regulation Information: TD Ameritrade is regulated by the Securities and Exchange Commission (SEC) in the United States and the Financial Industry Regulatory Authority (FINRA).
TD Ameritrade is a user-friendly platform that caters well to beginners and those who prioritize ease of use and comprehensive research tools. However, it may not be as cost-effective or suitable for active traders as Interactive Brokers. When compared to Interactive Brokers, TD Ameritrade offers no account minimums and a more beginner-friendly platform, but at the cost of higher trading fees and fewer advanced trading features. Ultimately, the choice between Interactive Brokers and TD Ameritrade will depend on the individual’s investment goals, trading style, and level of experience.
Fees and Commissions
While TD Ameritrade has a consistent fees and commissions plan, Interactive Brokers’s fees and commissions differ also according to the account you choose. In both cases, fees and commissions are extremely competitive.
TD Ameritrade offers 0% commissions on most products: stocks, ETFs, Online options – for which the broker charges $0.65 per contract, and forex trading. If you don’t want to trade autonomously, you can ask for the help of professionals provided by the broker, for commissions that range from $5 to $25.
The fees applied to futures amount to $2.25 per contract, while $6.95 is the fee for stocks not listed in the US.
For what concerns Interactive Brokers, the broker offers different fees for stocks according to the type of account: if you choose the Lite account, you’ll be charged $0 if you are a US resident, otherwise, the fee ranges from $0.0005 to $0.0035. The same applies to ETFs.
Moreover, Interactive Brokers charges up to $0.85 for futures, $0.65 for options.
When it comes to mutual funds, both brokers don’t charge anything for no transaction fee funds, but when it comes to trade, Interactive Brokers charges up to $14.95 per transaction, while TD Ameritrade can charge up to $74.95.
Both brokers are extremely transparent in communicating all possible commissions and fees to users, and when it comes to the most popular products offered, Interactive Brokers is slightly less expensive.
TD Ameritrade is one of the most popular brokers also thanks to the comprehensive offer of trading platforms, which never give up on intuitiveness. Interactive Brokers chose a different approach, creating different desktop and mobile platforms according to the level of experience of the user.
TD Ameritrade offers four platforms:
- The web platform, available online;
- Thinkorswim desktop and web, two platforms that can meet the needs of traders and investors who need more complex features. The web platform is available online, while the desktop platform can be downloaded and easily used on your PC;
- The mobile trading platform of TD Ameritrade is flexible and intuitive, and available on many devices – including wearables.
Interactive Brokers’s offer is even more varied. The broker is able to offer seven different trading platforms, according to different levels of difficulty and sophistication:
- Client Portal – a web trading platform;
- IBKR Mobile – which offers even more trading tools to users who want to benefit from mobile trading;
- Trader Workstation – or TWS: Interactive Brokers indicates this as their flagship trading platform, the right choice for those who want to use a desktop version and need more complex tools;
- IBKR APIs: Interactive Brokers offers Excel APIs, along with their industrial APIs. These trading tools are designed for experts who prefer to place their trades through an Application Programming Interface.
Then, Interactive Brokers offers two specialty trading platforms:
- IBKR EventTrader: this web trading platform allows for the trading of Event Contracts, which give you the opportunity to trade events that can have only two outcomes – yes or no;
- Impact: a downloadable mobile trading platform, good for beginners as well as for intermediate traders, which allows to trade stocks, options and cryptocurrencies.
The analysis of the features of the trading platforms designed by the two brokers highlights that even if the offer if TD Ameritrade is always extremely intuitive, Interactive Brokers allows you to choose among more options, and this can help traders and investors with different levels of experience, actually allowing Interactive Brokers to meet the needs of any user.
For what concerns the investment products and services offered by the two brokers, both Interactive Brokers and TD Ameritrade are able to provide you with a wide range of choices, but Interactive Brokers offers a higher number of investment options and has a more international vocation.
Let’s see what TD Ameritrade has to offer, first.
Consider that this broker is mainly designed for the US and Canada markets. If you want to access other markets you’ll need to use the assisted trading options – and this will cost you more money.
This can be considered as a downside of this broker, but it’s still a valuable platform if you consider the many products it offers:
- Mutual Funds,
- Fixed Income – that is, investment products designed to be as riskless as possible, whose purpose is to protect your capital,
- Futures contracts,
- Forex – this option in particular is highly appreciated by forex traders and investors, because the broker offers 70 pairs.
If you want to get exposure to the crypto market, you’ll find only crypto derivatives on TD Ameritrade.
When it comes to Interactive Brokers, these are your investment options:
- FOPs – Free Of Payment, which is a type of position transfer for the US market,
- Forex – if TD Ameritrade is particularly appreciated for the number of pairs it offers, Interactive Brokers performs even better, offering over 100 pairs;
- Cryptocurrencies. Differently from TD Ameritrade, Interactive Brokers doesn’t only allow to trade crypto derivatives, but also cryptocurrencies thanks to its partnership with Paxos. The available cryptocurrencies are Bitcoin, Bitcoin Cash, Ether and Litecoin. It’s worth noting that the fees charged are extremely competitive, and even lower than the fees charged by some top crypto exchanges, amounting to 0.18% of the transaction;
- US Spot Gold (USGOLD);
- Mutual Funds;
- Hedge Funds.
When it comes to investment options, Interactive Brokers offers you a wider choice, and you can trade on different markets even autonomously.
Customer service is available 24/7, for both brokers.
TD Ameritrade offers support to users via phone call, social media chats, fax and email. If you prefer to have a conversation in person, you can visit one of TD Ameritrade’s branches.
Interactive Brokers provide a full on-line experience. You can contact the broker:
- By phone, available 24/7;
- Via email;
- Via the live chat room, available 24 hours a day from Monday to Friday, and from 13:00 to 19:00 on Sunday.
Both brokers also offer an exhaustive FAQ section you can use to quickly find an answer to your questions.
Comparing the two customer services, even if the quality is extremely high in both cases, TD Ameritrade seems to perform better for a few reasons:
- First off, it allows you to meet their customer service representatives;
- Its customer service pays attention also to people that usually have more difficulty to get appropriate assistance via most common means of communication, and the broker designed a specific service for the hearing impaired.
Security is a major concern of traders and investors – and generally of all those who use online services.
Especially when it comes to activities that involve money, security must take into account both the funds of the users and their sensitive information.
Both TD Ameritrade and Interactive Brokers know that very well, and they put in place all the security measures needed.
In the history of TD Ameritrade there is an event that shocked users: in 2007, one of the databases of the broker was hacked, and the information of millions of users were stolen.
Today, the broker given plenty of suggestions to help its users to protect their accounts, the broker constantly work to keep the whole system safe, and funds are protected using the following measures:
- The broker offers additional free products you can download to protect your devices – moreover, TD Ameritrade always suggest to update your antivirus software;
- It partners with third parties to allow you to buy other security-related products at discounted prices;
- TD Ameritrade clearly explains what are the procedures followed by the broker – so you’re sure that if anyone asks you your passwords via email, it’s not the official broker;
- Your funds are protected by the Asset Protection Guarantee – if you lose your funds because of unauthorised activities, you’ll get fully refunded.
The measures taken by Interactive Brokers are even more complex:
- First off, the broker is extremely strong under a financial perspective – to mention just a few of the reasons behind this statement, the capital of the broker far exceeds the requirements of regulators, and it’s owned by the public company Interactive Brokers Group, its affiliates and employees – so everyone is directly involved, and the success of the company is pivotal for all its members more than it happens in other companies.
- The capital of clients is segregated along with a large buffer to guarantee the security of funds.
- Securities accounts fall under the protection of the SIPC (Securities Investor Protection Corporation), which covers up to $30 million according to the market involved.
- The secure login system used by the broker involves a free physical device or, alternatively, the IBKR Mobile Authentication, designed for mobile devices.
Both brokers also use strong and compliant privacy policies.
So, in both cases, your funds and accounts are extremely safe, but the measures taken by Interactive Brokers make us lean towards this broker if we have to determine which is better for what concerns security.
Interactive Brokers and TD Ameritrade are both reputable online brokerage platforms that offer a range of investment products and services to retail investors. Both platforms have their strengths and weaknesses, with Interactive Brokers offering lower trading fees, more advanced trading tools, and a broader range of investment options, while TD Ameritrade offers a user-friendly platform, comprehensive research tools, and no account minimums. Ultimately, the choice between these two platforms will depend on an individual’s investment goals, trading style, and level of experience. Investors should consider factors such as trading fees, investment options, platform features, and research tools to determine which platform is the best fit for their needs.
TD Ameritrade results to be slightly less expensive when compared to Interactive Brokers.
Interactive Brokers give access to more international markets without the need to use the assistance of the broker to trade.
Yes, both brokers provide mobile applications that can make it easier for you to track and manage your trades.
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