Thursday, 22 October 2020

Fidelity vs. TD Ameritrade: Which Is Best for You?

Fidelity vs. TD Ameritrade: Which Is Best for You?
25 Jul

Fidelity and TD Ameritrade are two giants of American finance. Both brokers offer competitive fees, diverse portfolio management options and great customer service. To help you decide which one is the right choice for your investing dollars, we’ve made a side-by-side comparison of each firm’s offerings.

TD Ameritrade is a good choice for investors who want to trade a wide variety of asset classes, including futures and even cryptocurrency — neither of which Fidelity offers. However, for the beginning investor, Fidelity is a great option, as it offers lower transaction fees and no account minimums for its robo-advisor option. There are other key differences as well, so read on for more details.

Fidelity vs. TD Ameritrade: Feature comparison

Fidelity vs. TD Ameritrade: Fees & account minimums

Some brokers charge an annual or monthly fee to maintain your account, but neither Fidelity nor TD Ameritrade levy an account maintenance fee. When it comes to trading fees, Fidelity has the edge over TD Ameritrade. Fidelity charges a flat fee of $4.95 for all online trades; TD Ameritrade charges $6.95. If you make few trades, transaction fees may not matter as much. But if you are an active investor or like to day trade, transaction fees can add up and cut into your earnings.

Fidelity and TD Ameritrade offer investment management services, including robo-advisor products — Fidelity Go and Essential Portfolios — to manage your money if you’d prefer to take a hands-off approach. TD Ameritrade offers less expensive investment management services. But if you need more personalized advice, Fidelity may offer a better deal, depending on the size of your portfolio balance.

TD Ameritrade offers three different managed portfolio options. For the Essentials Portfolio — an automated investment options — the annual management fee is 0.30% of your account balance. The Selective Portfolio, which has a broader range of Mutual funds and exchange traded funds (ETFs), has an annual management fee of 0.75% to 0.90% for the first $100,000. A Personalized Portfolio, which features personalized advice, has an annual management fee of 0.60% to 0.90%.
Fidelity offers several different portfolio management options. For Fidelity Go, an affordable robo-advisor program, you’ll pay a 0.35% fee. For Fidelity Personalized Planning and Advice, a hybrid robo advisor with coaching, you’ll pay a 0.50% fee. Fidelity also offers Portfolio Advisory Services, with professionally managed accounts. If you opt for this approach, your fee will be 0.50% to 1.50%, depending on your assets invested.

If you take money out of your account, either as a partial withdrawal or a total withdrawal, you may have to pay the brokerage firm a fee. With TD Ameritrade, you’ll pay $75 for a full account transfer, but $0 for a partial transfer. Fidelity charges no transfer fees at all, either for partial or full transfers.

TD Ameritrade and Fidelity do not have account minimums for most accounts, making them good choices for beginning investors. However, TD Ameritrade does have a $5,000 minimum deposit for its Essentials Portfolio, its robo-advisor offering.

Fidelity vs. TD Ameritrade: Tradable securities

Besides stocks and bonds, Fidelity and TD Ameritrade allow you to invest in a variety of asset classes:

  • Mutual funds: If you interested in investing in professionally managed mutual funds, TD Ameritrade offers over 13,000 funds, while Fidelity offers more than 10,000 mutual funds.
  • Options trading: Options are a contract that allows you to sell securities at a predetermined price over a set period of time on the options market. TD Ameritrade allows you to engage in options trading with no trade minimums and no hidden fees. Fidelity also offers options trading, and you can earn up to 500 commission free trades, good for two years.
  • ETFs: If you’re working on diversifying your portfolio, investing in ETFs makes sense. TD Ameritrade gives you access to over 550 commision-free ETFs, while Fidelity offers over 500 commision-free ETFs.
  • Foreign exchange trading: For investors interested in trading on the foreign exchange market, you’ll have to sign up with Fidelity Forex LLC, a subsidiary of Fidelity. With Fidelity Forex, you’ll get access to currencies for more than 35 countries and complete direct transfers from your Fidelity brokerage accounts. TD Ameritrade offers access to currencies for more than 20 countries.
  • Futures: With futures trading, you agree to sell an asset or security at a set price at a predetermined time in the future. TD Ameritrade offers over 60 futures products, while Fidelity doesn’t offer futures trading.
  • Cryptocurrency: TD Ameritrade recently announced that its offering investing through ErisX, a regulated exchange for Cryptocurrency trades, but it’s not yet available. Fidelity doesn’t offer Crypto-currency trading at this time.

Fidelity vs. TD Ameritrade: Special features

  • Guidance for beginners: If you’re new to investing, you may need some help understanding the basics and getting started. TD Ameritrade introduced an innovative chatbot named “Ask Ted” that’s designed to help. Available around the clock, the bot can help you make informed investment decisions.
  • Trade platforms: TD Ameritrade offers customers Trade Architect and thinkorswim, platforms that provide you with analysis tools, studies, and paper trading. Fidelity’s trading platform is also excellent. Investors who make 36 trades in a 12-month period can access Active Trader Pro, allowing you to do in-depth research before investing.

Fidelity vs. TD Ameritrade: Which is best for you?

Fidelity and TD Ameritrade are quite similar, offering many of the same investment types and account options. But if you’re an active trader, Fidelity is the clear choice. With lower trading fees and lower fees for personalized advice, you get more value for your money.

However, if you are looking for more investment options, TD Ameritrade is the winner. You can invest in Cryptocurrency and futures trading, and get broader access to Mutual funds and ETFs.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kat Tretina

Kat Tretina |

Kat Tretina is a writer at MagnifyMoney. You can email Kat here

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