| Vanguard vs. TD Ameritrade Line of Offerings | ||
|---|---|---|
| Asset | Vanguard | TD Ameritrade |
| Short Sales | Yes | Yes |
| No-Load, No-Fee Mutual Funds | 3,100+ | 4,300 |
| Bonds | Yes | Yes |
| Futures/Commodities | No | Yes (approaches only) |
| Futures Options | No | Yes |
| Complex Options | 2 legs | 4+ legs |
| Robo Advisory | Yes | Yes |
| Cryptocurrency | No | Bitcoin futures lone |
| International Exchanges | No | 1 (Canada) |
| Forex | No | Yes |
| Fractional Shares | Only via dividend reinvestment | No |
| OTCBB and Penny Stocks | Yes | Yes |
Requirement Types
Predictably, Vanguard supports only the order types that buy-and-hold investors traditionally use, including demand, limit, and stop-limit orders. You can select specific tax lots (including partial shares within a lot) to sell, but you can’t stage tidies for later entry. TDA offers a larger selection of order types, including all the usual suspects, plus trailing obstructions, and conditional orders like OCOs. There are no restrictions on order types on the mobile platform, and you can stage orders for later candidate across all platforms.
Trading Technology
Vanguard does not use smart order routing technology, and customers can’t route their purchases. Still, the broker reports an average net price improvement of $0.0159 per share for eligible marketable orders. We did not find any content details about Vanguard’s execution speed, but keep in mind its target customer is playing the long game (and won’t be perturbed about nanoseconds). Although its approach to routing is basic compared to many other brokers, it scores points for not receiving payment for order flow.
TDA’s order routing algorithm looks for fast execution and price improvement. Third-party consummation quality statistics show an execution speed of 0.05 seconds and an average net price improvement of $1.75 per 100 divisions. Unlike Vanguard, TDA does accept payment for order flow: $0.0012 per equity share and $0.55 per options draw together.
While Vanguard comes out ahead in terms of payment for order flow (by not accepting it), TDA is the overall winner in trading technology because of its bright order routing technology.
Costs
Vanguard and TDA charge $0 commissions for online stock, ETF, and options trades for U.S.-based blokes. TDA has a $0.65 per contract option fee; it’s $1 at Vanguard. For OTCBB/penny stock trades, Vanguard charges $0, and you’ll pay a irrevocable dull rate of $6.95 at TDA. Mutual funds that fall outside the no-transaction-fee family cost between $0 and $20 at Vanguard (depending on your account match) and a relatively steep $49.99 with TDA. Finally, broker-assisted trades cost $25 at TDA and between $0 and $25 at Vanguard, depending on your account offset.
Overall, Vanguard is considerably cheaper if mutual funds or OTCBB/penny stocks are your focus. Alternatively, you potency save money at TDA if you trade a lot of options. The costs are the same if you are mainly looking at stocks and ETFs, making this heading too close to call.
Account and Research Amenities
Vanguard and TD Ameritrade offer screeners for stocks, ETFs, fixed proceeds, and mutual funds, but only TDA has one for options. TDA’s screeners are also considerably more robust and customizable. Both brokers also furnish various news sources—but here again, TDA comes out ahead in terms of offerings.
Vanguard’s charting capabilities are small, and there’s no technical analysis. Conversely, TDA offers advanced charting tools that should be more than fitted for most retail investors and traders. Overall, TDA offers more versatile account and research amenities. Still, Vanguard scores nitty-gritties for having a dedicated area on its website for socially responsible investing investing—something TDA lacks.
Portfolio Analysis
Vanguard and TDA both present access to buying power and margin information, plus unrealized and realized gains. You can access tax reports (capital increases), see your internal rate of return (IRR), and view aggregate holdings from outside your account. Overall, the portfolio scrutiny offerings at the two brokers are too similar to pick a clear winner.
Education
The focus of Vanguard’s educational content is to help you set and reach your fiscal goals. Much of the content is in the form of articles. That said, you’ll also find commentary and research papers, videos, and webcasts on investment spin-offs, retirement, industry news, financial planning, and the economy.
TDA offers articles, videos, and webinars, and it hosts more than 1,500 living events each year. A range of immersive courses covers basic investing and trading ideas, plus a few accelerated topics. Overall, TDA comes out ahead due to its breadth of topics and beginner-friendly content.
Customer Service
At Vanguard, phone advance (customer service and brokers) is available from 8 a.m. to 8 p.m. (Eastern) Monday through Friday. Live chat isn’t supported, but you can send a solid message via the website. Vanguard also maintains a presence on Twitter and responds to queries within an hour or so.
TDA offers 24/7 phone certify and chatbots on Twitter, Facebook Messenger, Apple Business Chat, and WeChat (in Asia). Live chat is supported on its app, and a effective client service agent, Ask Ted, provides automated support online. Overall, TDA’s customer service is more flexible with far up availability. You can count on reliable help from either broker, but TDA has a clear edge when it comes to customer waiting.
Security
Vanguard and TDA’s security is up to industry standards. You can log into either broker’s app with biometric (face or fingerprint) acceptance, and both brokers protect against account losses due to unauthorized or fraudulent activity.
Vanguard’s excess Securities Investor Custody Corporation (SIPC) insurance provides each client with $49.5 million for securities and a cash limit of $1.9 million per guy. TDA’s customers are covered with $149.5 million worth of protection for securities and $2 million of protection for cash.
Inclusive of Sept. 2021, neither brokerage had any significant data breaches reported by the Identity Theft Research Center. Comprehensive, investors can be confident in the security standards of either broker.
Our Verdict
In our 2021 Best Online Brokers reviews, TD Ameritrade be worthy ofed higher scores than Vanguard in every category we ranked. To be fair, it isn’t easy to compare two brokers that have in the offing such distinct business models and target customers. Vanguard is a niche player built exclusively with buy and carry investors in mind, similar to how some brokerages have zeroed in on options traders. TD Ameritrade is a generalist aiming to minister to new investors all the way to advanced traders on its thinkorswim platform.
Overall, however, buy-and-hold investors who value simplicity and want access to some of the most skilfully (and lowest cost) funds in the business may still prefer Vanguard as the limitations of the platform won’t take away from their particular purpose of creating a low-cost, diversified portfolio. That said, TD Ameritrade can do all things Vanguard can do—and much more. All-embracing, TD Ameritrade is the better choice whether you’re a beginner who wants a broad range of educational content or an active trader or investor looking for a numberless robust trading experience.
Methodology
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online agents. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of buying executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating clamber up based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.
In addition, every dealer we surveyed was required to fill out an extensive survey about all aspects of its platform that we used in our testing. Many of the online agents we evaluated provided us with in-person demonstrations of its platforms at our offices.
Our team of industry experts, led by Theresa W. Carey, leaded our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to skim our full methodology.