Interactive Brokers vs TD Ameritrade

There’s plenty of different trading platforms on the market today. But as the number of available choices increases, confusion builds up. How to decide between all these options?

Our Interactive Brokers vs TD Ameritrade review will reveal everything you need to know about these two major industry players. From the fees charged and security provided to the ease of use and customer service, we’ll cover all areas so that you can make the best decision for you.

Interactive Brokers vs TD Ameritrade Side by Side Comparison

Interactive Brokers TD Ameritrade
Fiduciary: Yes Yes
AUM: $232 billion $1.3 trillion
Account minimum: No minimum No minimum
Human advisor: No Yes
Mobile app: Yes Yes
Robo advisory service: Yes Yes
Customer support: Yes Yes
Forex trading:  Yes Yes
Futures trading Yes Yes
IRA closure fee $0 $0
Broker assisted trades fee: $30 $25
Mutual fund trade fee $14.95 $49.99

TD Ameritrade vs Interactive Brokers: Ease of Use and Trading Offerings

Both TD Ameritrade and Interactive Brokers provide you with a wide range of investment products to choose from via their online platforms. The IB trading platform is known as Trader Workstation, whereas TD Ameritrade’s is called thinkorswim.

At TD Ameritrade, you can invest in the following:

And on the Interactive Brokers app, you can choose from the following trading options:

  • Mutual Funds
  • CFDs
  • Fixed Income
  • Indices
  • Metals
  • Currencies
  • SSFs
  • Structured Products
  • Warrants
  • ETFs
  • FOPs
  • Futures
  • Options
  • Stocks

Now let’s take a look at some of the most popular trading types in further detail:

Day trading

Both firms give you the option of taking shorter positions. However, Interactive Brokers offers several key features that TD Ameritrade doesn’t, such as a check margin tool that displays the margin requirements for shorting certain security.

On the flip side, the TD Ameritrade day trading fees are non-existent for Level II quotes. So whether you’re a pro or beginner, you will get this for free.

IB’s Trader Workstation platform seems to offer a much more comprehensive day trading platform, though. For instance, while both TD Ameritrade and Interactive Brokers provide direct-access routing, the latter has many more venues available.

Forex trading

While Interactive Brokers edges it in the thinkorswim vs Interactive Brokers battle regarding day trading, TD Ameritrade levels the field on the Forex trading front. Of course, it is quite rare to have two top brokerages that provide Forex trading, so this alone should be applauded.

However, TD Ameritrade is the clear winner. While Interactive Brokers provides 23 currency pairs, you will have access to more than 70 on the thinkorswim platform.

Furthermore, TD Ameritrade does not charge commission on Forex trading, whereas IB does. IB takes a percentage on every trade value, with a $1-$2 minimum commission in place.

Not only is the lack of any TD Ameritrade Forex commission attractive, but the platform is easier to use too. The interface is intuitive, and there are greater display possibilities for each dealing box.

Margin trading

Margin accounts are available at both brokerages. However, the fees differ considerably. While IB will charge a maximum of 1.59% on any balance, the TD Ameritrade margin rates are a lot higher. The maximum is 9.5%.

There is also a great feature on Interactive Brokers that enables you to view margin details, such as maintenance and initial requirements, for every entered ticker symbol. This is a nice touch, and it’s not something you will find on thinkorswim.

Ease of use

Now, let’s compare TD Ameritrade vs Interactive Brokers in terms of usability. TD Ameritrade has long been championed for its user-friendly platform, making it easy for beginners to get started. You can check out our TD Ameritrade review for more information.

Opening an account with TD Ameritrade is certainly easy, and you can do so via their desktop site or mobile application. There are a lot of different account types for you to choose from. However, to make it even easier, TD Ameritrade provides a “common types” section, which can help you narrow down your search.

Notably, IBKR has made a special effort to improve its onboarding journey over the years, and now it’s a lot more straightforward than it used to be. You can open an account without funding it immediately. Choosing from the various account types can be a bit more complex, though.

In terms of the trading platforms themselves, you will find a steeper learning curve with the Trader Workstation than you will with thinkorswim. Also, customizing your trading experience may take you a little bit longer at IBKR.

TD Ameritrade vs Interactive Brokers: Fees

Undoubtedly, one of the most important parts of this Interactive Brokers vs TD Ameritrade review is the fees section.

You can use the tables below to compare the costs of using these two brokerages.

TD Ameritrade

Futures & Options on Futures $2.25 fee per contract
Options $0 ($0.65 fee per contract)
Options – Broker-assisted $25 + $0.65 fee per contract
Options – IVR Telephone System $5 + $0.65 fee per contract
Options exercises and assignments $0
Mutual Funds – NTF No commission
Mutual Funds – Load No commission
Mutual Funds – No Load $49.99
ETFs – Broker-assisted $25
ETFs – IVR Telephone System $5
ETFs – Online $0
ETFs – ETFs that are commission-free $0
Stocks – Broker-assisted $25
Stocks – IVR Telephone System $5
Stocks – Online $0

Interactive Brokers

Before we look at the Interactive Brokers trading fees, it’s important to note that there are two pricing structures in place: Tiered and Fixed.

  • Fixed-Rate Pricing – You will be charged a set percentage of a trade’s value or a fixed-rate commission per share. Regulatory and exchange fees are included.
  • Tiered Pricing – The brokerage commission is dependent upon volume, as well as clearing, regulatory, and exchange fees.

There is also a free account option, but this is not available for all Interactive Brokers account types. In addition, it’s only for stock traders based in the US. When this is coupled with the $0 minimum deposit, finding the best-performing stocks becomes a much cheaper venture.

Now, let’s take a look at the table below to grasp some of IBKR’s fees for their fixed plan.

Options $0 ($0.65 fee for each contract)
Futures $0.85 per contract
Mutual Fund – Trade Fee $14.95
Broker-Assisted Trade Fee $30
Mutual Funds – NTF No commission
Mutual Funds – Load No commission
Mutual Funds – No Load $49.99
Account Fees – IBKR Lite $0
Account Fees – Pro (Less than $2,000 in account) $20 per month minus commissions
Account Fees – Pro (Less than $100,000 in account) $10 per month minus commissions

Check out our Interactive Brokers review for more details about the various account types and fees.

Security

Are there any advantages of TD Ameritrade vs Interactive Brokers in terms of security?

Well, you can expect a high level of protection from both brokers. They have taken all the necessary steps to enhance your accounts’ security, with fingerprint and face recognition available for log-in. Interactive Brokers has even gone one step further by providing a security device known as Secure Login System, which is optional for users.

In terms of insurance protection, both carry excess Securities Investor Protection Corporation (SIPC) insurance:

  • TD Ameritrade: Cash protection of $2 million, and securities protection of $149.5 million per client.
  • Interactive Brokers: Cash protection of $900,000, which is part of their $30 million protection per client.

Mobile App

Many investors enjoy mobile trading, so it’s only right that we provide an Interactive Brokers vs Ameritrade comparison of this.

The mobile app available at Interactive Brokers is certainly impressive. It’s easy to use, and you get some pretty neat charting features. This includes up to five years of price data, three different styles of graphs, and several technical indicators.

Additionally, the artificial intelligence element of the app, known as iBot, is found in several areas within the app. It can be useful for answering some questions, but it’s not going to be able to cater to your every need.

The mobile Interactive Brokers platform also delivers some advanced features in terms of order tickets, including an algorithm for price management, profit taker, and on-the-close orders. Alerts and watchlists are available too on the IB app.

Not to be outshined easily, TD Ameritrade has brought three different mobile apps to the market. Some of the features they provide that you don’t get on the IB App include direct-access routing, level II quotes, TD Ameritrade forex spreads, and the latest financial news.

If you like to read up on technical research and historical price data, you’ll find hundreds of studies to delve into, as well as two decades of price data.

Customer Service

Both platforms offer excellent customer support. At TD Ameritrade, you can enjoy 24/7 assistance via live chat, email, and phone. The brokerage also provides in-person support at its branches.

For those interested in IB trading, you can expect 24/7 customer support via chat, email, and phone.

Who Is Interactive Brokers Best For?

The Interactive Brokers trading platform is a great all-rounder, but there are a few key areas whereby it really shines.

If you’re a day trader with a good amount of experience, IB is a good choice. From thorough indicators to a whole host of trading windows and professional charting tools, you get a whole host of advanced features on this platform.

Who Is TD Ameritrade Best For?

If you’re a beginner, the TD Ameritrade trading platform is very appealing.

This is not to say that it’s unsuitable for experienced traders. It ticks both boxes. You can expect excellent portfolio management services, as well as stellar advice on how to build your portfolio effectively. In addition, the user-friendly interface is a real advantage when using thinkorswim.

Which Is Better: Thinkorswim vs Interactive Brokers?

Both platforms have their advantages, and they certainly both have a place in the market. Thus, the solution you choose depends on your goals and experience.

TD Ameritrade is certainly more user-friendly and has better options for beginners. So, if you’re looking for an online stock broker for beginners, TD Ameritrade is a suitable option. However, if you’re interested in day trading or margin rates, Interactive Brokers is the most cost-efficient and comes with a better set of features.

We hope that this Interactive Brokers vs TD Ameritrade review will have helped you decide which solution is right for you.

FAQ

How to Use Interactive Brokers?

You can sign up for Interactive Brokers via their website. Once you have entered the requested personal information, you will need to select your base currency and account type.

Is TD Ameritrade Good for Beginners?

Yes, TD Ameritrade is considered one of the best trading platforms for beginners. Their thinkorswim platform is incredibly easy to use, boasting an intuitive design. Plus, they have a great collection of features for those just getting started.

Why is Interactive Brokers so cheap?

The IB margin rates are among the lowest on the market. One of the reasons it can provide such low rates is because the platform has millions of actively trading users. As a result, it can bring in huge amounts of revenue on a daily basis via trading fees and commission.

Does Interactive Brokers charge a monthly fee?

If your monthly commissions are greater than or equal to $10, you don’t need to pay a monthly fee at Interactive Brokers. However, if you don’t meet this minimum requirement, you may be subject to an account inactivity fee.

Is Interactive Brokers better than TD Ameritrade?

Interactive Brokers is better for experienced day traders. Yet, if you’re new to the world of trading, TD Ameritrade may be a better match. Ultimately, comparing Interactive Brokers vs TD Ameritrade based on your end objectives is the best way to determine the right option for you.

ABOUT AUTHOR

I have been writing content for several years now after stumbling across a few opportunities online. You could call it fate. My personal experiences and eagerness to learn have fuelled my passion for the financial sector. When I don’t have my eyes peeled to the computer screen, I dedicate my time to my other interests — motocross and music.

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