Vanguard vs. TD Ameritrade

Order Sorts

Predictably, Vanguard helps solely the order sorts that buy-and-hold traders historically use, together with market, restrict, and stop-limit orders. You may choose particular tax heaps (together with partial shares inside lots) to promote, however you possibly can’t stage orders for later entry. TDA presents a bigger number of order sorts, together with all the standard suspects, plus trailing stops, and conditional orders like OCOs. There are not any restrictions on order sorts on the cellular platform, and you’ll stage orders for later entry throughout all platforms.

Buying and selling Know-how

Vanguard doesn’t use sensible order routing expertise, and prospects cannot route their orders. Nonetheless, the dealer stories a mean web value enchancment of $0.0159 per share for eligible marketable orders. We didn’t discover any prepared particulars about Vanguard’s execution pace, however bear in mind its goal buyer is enjoying the lengthy recreation (and will not be involved about nanoseconds). Though its strategy to routing is primary in comparison with many different brokers, it scores factors for not accepting cost for order circulate.

TDA’s order routing algorithm seems for quick execution and value enchancment. Third-party execution high quality statistics present an execution pace of 0.05 seconds and a mean web value enchancment of $1.75 per 100 shares. In contrast to Vanguard, TDA does settle for cost for order circulate: $0.0012 per fairness share and $0.55 per choices contract.

Whereas Vanguard comes out forward by way of cost for order circulate (by not accepting it), TDA is the general winner in buying and selling expertise due to its sensible order routing expertise.

Prices

Vanguard and TDA cost $0 commissions for on-line inventory, ETF, and choices trades for U.S.-based prospects. TDA has a $0.65 per contract choice payment; it is $1 at Vanguard. For OTCBB/penny inventory trades, Vanguard prices $0, and you may pay a flat charge of $6.95 at TDA. Mutual funds that fall outdoors the no-transaction-fee household price between $0 and $20 at Vanguard (relying in your account steadiness) and a comparatively steep $49.99 with TDA. Lastly, broker-assisted trades price $25 at TDA and between $0 and $25 at Vanguard, relying in your account steadiness.

General, Vanguard is significantly cheaper if mutual funds or OTCBB/penny shares are your focus. Alternatively, you may lower your expenses at TDA in case you commerce plenty of choices. The prices are the identical if you’re primarily shares and ETFs, making this class too near name.

Account and Analysis Facilities

Vanguard and TD Ameritrade provide screeners for shares, ETFs, mounted revenue, and mutual funds, however solely TDA has one for choices. TDA’s screeners are additionally significantly extra strong and customizable. Each brokers additionally provide varied information sources—however right here once more, TDA comes out forward by way of choices.

Vanguard’s charting capabilities are restricted, and there isn’t any technical evaluation. Conversely, TDA presents superior charting instruments that needs to be greater than sufficient for many retail traders and merchants. General, TDA presents extra versatile account and analysis facilities. Nonetheless, Vanguard scores factors for having a devoted space on its web site for socially accountable investing—one thing TDA lacks.

Portfolio Evaluation

Vanguard and TDA each present entry to purchasing energy and margin data, plus unrealized and realized beneficial properties. You may entry tax stories (capital beneficial properties), see your inner charge of return (IRR), and think about mixture holdings from outdoors your account. General, the portfolio evaluation choices on the two brokers are too much like decide a transparent winner.

Training

The main target of Vanguard’s academic content material is that can assist you set and attain your monetary targets. A lot of the content material is within the type of articles. That stated, you may additionally discover commentary and analysis papers, movies, and webcasts on funding merchandise, retirement, business information, monetary planning, and the economic system.

TDA presents articles, movies, and webinars, and it hosts greater than 1,500 dwell occasions annually. A spread of immersive programs covers primary investing and buying and selling concepts, plus a number of superior subjects. General, TDA comes out forward on account of its breadth of subjects and beginner-friendly content material.

Buyer Service

At Vanguard, telephone help (customer support and brokers) is on the market from 8 a.m. to eight p.m. (Jap) Monday by way of Friday. Dwell chat is not supported, however you possibly can ship a safe message by way of the web site. Vanguard additionally maintains a presence on Twitter and responds to queries inside an hour or so.

TDA presents 24/7 telephone help and chatbots on Twitter, Meta Messenger, Apple Enterprise Chat, and WeChat (in Asia). Dwell chat is supported on its app, and a digital consumer service agent, Ask Ted, offers automated help on-line. General, TDA’s customer support is extra versatile with increased availability. You may depend on dependable assist from both dealer, however TDA has a transparent edge in the case of customer support.

Safety

Vanguard and TDA’s safety is as much as business requirements. You may log into both dealer’s app with biometric (face or fingerprint) recognition, and each brokers defend in opposition to account losses on account of unauthorized or fraudulent exercise.

Vanguard’s extra Securities Investor Safety Company (SIPC) insurance coverage offers every consumer with $49.5 million for securities and a money restrict of $1.9 million per buyer. TDA’s prospects are lined with $149.5 million price of safety for securities and $2 million of safety for money.

Via Sept. 2021, neither brokerage had any important information breaches reported by the Id Theft Analysis Middle. General, traders may be assured within the safety requirements of both dealer.

Our Verdict

In our 2021 Greatest On-line Brokers opinions, TD Ameritrade earned increased scores than Vanguard in each class we ranked. To be honest, it is not straightforward to check two brokers which have such distinct enterprise fashions and goal prospects. Vanguard is a distinct segment participant constructed solely with buy-and-hold traders in thoughts, much like how some brokerages have zeroed in on choices merchants. TD Ameritrade is a generalist aiming to serve new traders all the way in which to superior merchants on its thinkorswim platform. 

General, nevertheless, buy-and-hold traders who worth simplicity over bells and whistles and need entry to among the finest (and lowest price) funds within the enterprise should still favor Vanguard as the restrictions of the platform received’t take away from their fundamental goal of making a low-cost, diversified portfolio. Actually, if we scored a class for passive, purchase and maintain traders, Vanguard would probably take it simply on the worth they ship by way of their funds. TD Ameritrade, after all, can do all issues Vanguard can do—and far more. General, TD Ameritrade is the higher alternative whether or not you are a newbie who needs a broad vary of academic content material or an lively dealer or investor on the lookout for a extra strong buying and selling expertise.