Investing your hard-earned money in the stock market can be an exciting yet daunting task. With countless online brokerages to choose from, how do you determine which one is the best fit for your needs?
In this comprehensive guide, we’ll compare two of the biggest names in the industry – Fidelity and TD Ameritrade. With decades of experience between them, these brokerages have a lot to offer today’s savvy investors.
By examining key factors like commissions and fees, investment choices, research and tools, customer service, mobile apps, and more, you’ll have all the information you need to decide if Fidelity or TD Ameritrade (or neither!) is right for you.
Introduction: How Fidelity and TD Ameritrade Stack Up
Founded in 1946, Fidelity Investments manages over $11 trillion in assets and serves 35 million customers. With extensive research capabilities and zero-expense ratio index funds, Fidelity aims to help clients build wealth and meet financial goals.
TD Ameritrade traces its roots back to 1971. After acquiring thinkorswim in 2009, TD Ameritrade now has over $1.2 trillion in client assets. TD Ameritrade is known for its quality trading platforms, extensive research, and investor education offerings.
Both brokers offer $0 trades on stocks, ETFs, options, and mutual funds, making them appealing choices for active traders and long-term buy-and-hold investors alike.
While the two have considerable overlap in services offered, there are some key differences to consider:
- Account minimums – Fidelity has no minimums to open a retail investing account, while TD Ameritrade requires $2,000.
- Investment choices – Fidelity offers many more mutual funds without transaction fees, while TD Ameritrade has a wider selection of commission-free ETFs.
- Platforms and tools – Fidelity boasts a powerful trading platform with Active Trader Pro. TD Ameritrade’s thinkorswim is also extremely robust for futures, forex, and complex options trading.
- Branches – Fidelity has over 200 brick-and-mortar locations, compared to TD Ameritrade’s 100 branches.
This guide will explore these differences and many others in-depth. Ready to learn which online brokerage giant is best for your investing style? Let’s dive in!
Comparing Fees and Commission Rates
Cost is often one of the most important factors when choosing an online broker. Lower fees mean more money staying in your pocket and less being paid out to your broker.
We’ll look at the common account fees, commissions, and other costs charged at Fidelity and TD Ameritrade.
Account Fees
Fidelity wins when it comes to account minimums and maintenance fees – or lack thereof.
- Fidelity has $0 minimums to open a retail investing account. TD Ameritrade requires $2,000.
- Fidelity has $0 maintenance fees on retail investing accounts. TD Ameritrade charges $25/year if your balance is under $2,000.
So if you’re just starting out investing or want to open a small secondary account, Fidelity is the way to go to avoid fees.
For IRA accounts, both brokers waive minimums if you sign up for recurring automatic contributions of $50+/month. This makes opening an IRA attainable even for those with limited upfront savings.
Stock and ETF Trade Commissions
The standard online stock and ETF trade commission is $0 at both Fidelity and TD Ameritrade. This includes market, limit, stop, and stop-limit orders.
You cannot beat free trading on stocks and ETFs. For regular stock investors, the zero commission rates at both brokers are very appealing.
One difference is commissions on certain specialty ETFs:
- Fidelity charges $4.95 for over 3,200 iShares ETFs
- TD Ameritrade offers commission-free trading on all ETFs
So TD Ameritrade has an edge for investors who trade niche iShares ETFs frequently. But for most buy-and-hold ETF investors, the zero commissions apply to the vast majority of funds anyway.
Mutual Fund Trade Commissions
Mutual funds are where Fidelity pulls ahead on costs.
Fidelity offers $0 commissions on over 3,400+ mutual funds. These include Fidelity funds along with many funds from Vanguard, Dodge & Cox, T. Rowe Price, and others.
TD Ameritrade charge $49.99 for no-transaction-fee (NTF) mutual funds. They do offer more than 3,000 funds via this NTF program, but you must pay the hefty $49.99 fee to buy and sell.
Fidelity gives you access to an impressive lineup of commission-free mutual funds from various fund families. TD Ameritrade mutual fund investors will rack up high trading costs over time.
Options Trade Commissions
Options traders will find the per-contract costs very reasonable at both brokers:
- Fidelity – $0.65 per contract
- TD Ameritrade – $0.65 per contract
Both brokers offer streaming real-time quotes and advanced tools for options traders. With identical options commissions, this category is a tie.
Broker Assisted Trades
If you make trades over the phone with a live broker instead of online, be prepared to pay up:
- Fidelity – $32.95
- TD Ameritrade – $25 + $0.65 per contract
As you can see, trading online saves a lot in fees at both brokers. Avoid broker assisted trades when possible.
Account Transfer Fees
Transferring an account to Fidelity or TD Ameritrade is simple and fee-free in most cases.
- Fidelity charges $0 for full or partial transfers.
- TD Ameritrade charges $0 for full transfers and $50-$100 for partial transfers.
So Fidelity has a small advantage in keeping partial transfers free. But most investors will be doing full transfers anyway when switching brokers, so this likely won’t sway your decision.
Investment and Trading Options Compared
The investment choices offered by a broker are nearly as important as costs. You want access to an array of securities to build a properly diversified portfolio.
Here we’ll compare the tradable assets offered at Fidelity and TD Ameritrade.
Stocks and ETFs
Both brokers allow trading of all stocks and ETFs listed on major U.S. exchanges. This includes:
- NYSE
- Nasdaq
- AMEX
- OTCBB
- Pink Sheets
You’ll also find trading available on foreign exchanges like London, Tokyo, and others.
Overall stock and ETF coverage is very similar at Fidelity and TD Ameritrade. Most investors will be satisfied with the extensive choices.
One advantage TD Ameritrade has is over 1,500 commission-free ETFs. Fidelity offers 93 iShares ETFs without commission but charges $4.95 for additional iShares funds.
So if you frequently trade smaller ETFs from niche providers like Global X or WisdomTree, TD Ameritrade is the better choice. But for mainstream ETFs, both brokers have you covered commission-free.
Mutual Funds
As mentioned previously, Fidelity shines when it comes to mutual fund offerings.
Fidelity provides expense ratios as low as 0.00% on their index mutual funds. Coupled with $0 commissions, this results in rock-bottom costs for Fidelity mutual fund investors.
Beyond Fidelity’s own funds, you also get $0 trades on over 3,400 funds from leading companies like:
- Vanguard
- Dodge & Cox
- Franklin Templeton
- T. Rowe Price
With TD Ameritrade, you can trade most top mutual funds through their NTF program. But you’ll pay $49.99 per trade which adds up.
For mutual fund investors, Fidelity’s commission-free platform provides a huge cost advantage.
Bonds
U.S. Treasury bonds, municipal bonds, corporate bonds, CDs, and other fixed-income securities are available at both Fidelity and TD Ameritrade.
Fidelity offers direct access to buy and sell bonds on their easy-to-use bond trading platform. TD Ameritrade requires you to call in for any bond trades.
For bond investors, Fidelity provides a better fixed-income trading experience.
Forex and Futures
For currency and futures traders, TD Ameritrade comes out on top.
TD Ameritrade allows trading of over 50 currency pairs and dozens of futures contracts. This includes popular commodities like gold, oil, natural gas, and more.
Fidelity only offers forex trading on a handful of major currency pairs. Future contracts are not available.
So traders who need access to a wide range of forex or futures will want to go with TD Ameritrade. But forex and futures make up a very small percentage of volume on both platforms.
Fractional Share Trading
The ability to buy fractional shares is extremely convenient for smaller investors.
Both brokers now offer fractional trading on stocks and ETFs. This means you can invest as little as $1 into a share of any stock.
For beginning investors with limited funds, fractional shares are a game changer. Fidelity and TD Ameritrade both deliver here.
retirement Accounts
You’ll find complete offerings of tax-advantaged accounts at both brokers:
- Traditional, Roth, Rollover, and SEP IRAs
- Solo 401(k)s
- SIMPLE IRAs
- Education Savings Accounts
- Health Savings Accounts
- Trusts
- And more…
Retirement and long-term investors can open all needed accounts at either broker.
One advantage of Fidelity is the massive menu of commission-free index funds available in IRAs. This allows you to build a diversified, low-cost IRA portfolio while avoiding all commissions.
Robo-Advisors
For hands-off investing, both brokers offer automated robo-advisor platforms.
- Fidelity Go charges 0.35% annually for account management.
- TD Ameritrade Essential Portfolios charges 0.30% annually.
This provides investors an easy way to have accounts managed automatically based on goals and risk tolerance. Costs are quite reasonable and similar between the two brokers here.
Market Research and Tools
When it comes to trading platforms and market research, both Fidelity and TD Ameritrade offer robust solutions.
Fidelity’s flagship platform, Active Trader Pro, includes advanced charting and customization matched by only a few competitors. Numerous screening tools, real-time data feeds, and integrated web and phone trading give you total control.
TD Ameritrade’s thinkorswim platform is equally powerful. thinkorswim excels when it comes to options trading in particular. Complex options spreads, probability analysis, and paper trading are easy with this industry-leading suite.
Both brokers also offer excellent screeners. Fidelity boasts the Fidelity Stock Screener as well as the Mutual Fund Screener with over 21,000 funds. TD Ameritrade has the fewest filters of the two but still powerful screening capabilities integrated into the thinkorswim platform.
When it comes to research, Fidelity and TD Ameritrade have armies of analysts producing market insights, earnings previews, investment commentary, and more. Whether you need quick chart analysis or deep fundamental data, both brokers deliver.
Overall for active traders or buy-and-hold investors alike, both Fidelity and TD Ameritrade offer market-leading trading platforms and research capabilities.
Evaluating Mobile Apps and Customer Service
A broker’s mobile app and customer service are crucial to the overall user experience. Even if a broker has attractive commissions or powerful tools, poor mobile access or support can ruin the experience.
How do Fidelity and TD Ameritrade compare on mobile and customer service fronts?
Mobile Apps
Fidelity and TD Ameritrade both offer full-featured iPhone and Android apps.
Fidelity’s apps earn 4.8 stars on the App Store and Google Play Store, while TD Ameritrade earns 4.6 and 4.5 stars respectively.
Apps from both brokers allow you to:
- Monitor accounts and positions
- Execute trades with streaming quotes
- Deposit checks remotely
- Access market news and research
- Get price alerts
- Chat with customer service
TD Ameritrade’s thinkorswim mobile app has a slight edge among active traders for its robust charts and ability to analyze options strategies.
But for everyday usability, Fidelity takes the lead with superior navigation and a more intuitive interface compared to TD Ameritrade.
For most investors, both brokers deliver excellent mobile access to accounts and trading.
Customer Service and Branches
When it comes to service, both brokers aim to provide top-notch support:
- 24/7 phone support – Talk to agents any time of day or night.
- Live chat – Chat with support agents online.
- Walk-in branches – Visit a local office for face-to-face help.
Fidelity maintains over 200 retail locations nationwide for in-person support. TD Ameritrade has approximately 100 branches mostly concentrated in the Midwest and West Coast.
So Fidelity has the advantage for investors who want access to physical locations. But TD Ameritrade’s branches are well-placed near most major metropolitan areas.
For overall customer satisfaction, third-party surveys give a slight edge to Fidelity for resolving issues promptly and effectively. But both brokers offer robust customer support resources.
Security and Protection Offered
The safety of your personal information and account assets is a high priority in the digital age.
We’ll look at how Fidelity and TD Ameritrade both leverage top-tier security measures to protect clients.
Account Protection
- SIPC Insurance – Both brokers provide $500,000 insurance for securities and $250,000 for cash via SIPC.
- Asset segregation – Client accounts are segregated from the firm’s funds for protection.
- Excess SIPC – Additional coverage from Lloyd’s of London provides billions in extra protection.
You can have confidence your account assets are secure at either broker. Between SIPC coverage and separate asset segregation, your holdings are protected from broker insolvency.
Privacy and Cybersecurity
Encryption, firewalls, and hardened facilities prevent unauthorized access to personal information at both Fidelity and TD Ameritrade.
To provide transparency, both brokers publish annual privacy and information security reports detailing controls in place. Independent audits verify security protocols meet rigorous industry standards.
Based on disclosures and third-party evaluations, Fidelity and TD Ameritrade both adopt leading privacy and security technologies. You can trust your data is safe with either broker.
How Fidelity and TD Ameritrade Compare on Costs
To recap, here’s an at-a-glance look at the fees and commission costs you’ll encounter at Fidelity and TD Ameritrade:
Fidelity
- $0 account minimum
- $0 account maintenance fees
- $0 stock/ETF trades
- $0 on 3,400+ mutual funds
- $0.65 per options contract
- Industry-low expense ratio index funds
TD Ameritrade
- $2,000 minimum to open account
- $25/year account fee under $2,000
- $0 stock/ETF trades
- $49.99 transaction fee mutual funds
- $0.65 per options contract
- Wide range of commission-free ETFs
And for regular trading activity, Fidelity’s zero mutual fund commissions justify paying a bit more attention to their overall lower costs.
Choosing the Right Broker for You
Deciding between brokerage giants Fidelity and TD Ameritrade ultimately depends on your specific investing needs.
Ask yourself these key questions:
- What will you trade most often? Stocks, ETFs, mutual funds, or options? Go with the broker with the lowest costs on your most-traded asset class.
- How important is account minimum? If you’re just starting out or have limited funds, Fidelity allows opening an account with any dollar amount.
- Will you invest in fractional shares? Both brokers facilitate this, so it likely won’t drive your decision.
- How much research and tools do you need? Both brokers provide robust trading platforms and market insights. Thinkorswim has an edge for high-volume active traders.
- Do you prioritize in-person branch access? Fidelity has more brick-and-mortar locations if this is important to you.
For the great majority of stock, ETF, and mutual fund investors – Fidelity emerges as the lower cost choice with zero account minimums and mutual fund trading costs. Exceptions would be futures/forex traders who need TD Ameritrade’s platform.
But there’s no denying the quality of both brokerages. You can’t go wrong investing with Fidelity or TD Ameritrade in the long run.
Frequently Asked Questions
Still evaluating Fidelity and TD Ameritrade? Here are answers to some commonly asked questions:
Does Fidelity or TD Ameritrade offer lower fees?
Overall Fidelity has lower account fees with no minimums and zero mutual fund commissions. But TD Ameritrade has lower ETF commissions if you trade niche iShares. For stock trading costs, the two brokers are identical.
Which is better for beginner investors?
Fidelity is likely better for beginners with no minimum balance and fractional share trading available. TD Ameritrade has a $2,000 minimum unless you set up recurring contributions.
Which has better trading platforms and research?
The thinkorswim platform gives TD Ameritrade an edge for active options and futures traders. But Fidelity’s Active Trader Pro is also extremely powerful. For everyday investors, both brokers are excellent.
Which has better mobile apps?
Fidelity generally earns higher ratings and reviews on its iOS
Which has better mobile apps?
Fidelity generally earns higher ratings and reviews on its iOS and Android apps for ease of use and navigation. But thinkorswim also scores well for trading and charting functionality. For most tasks, the two brokers are comparable on mobile.
Which is better for mutual funds?
Without question, Fidelity offers better mutual fund access. You can buy and sell thousands of mutual funds with $0 commissions at Fidelity. TD Ameritrade charges a $49.99 transaction fee on top no-load mutual funds.
Which has more physical branch locations?
Fidelity maintains over 200 retail locations across the country, compared to TD Ameritrade’s 100 branches mainly in the Midwest and West. If you want in-person support, Fidelity has a broader footprint.
Which has better IRA accounts?
Fidelity boasts a much larger selection of index funds with $0 expense ratios. This allows creating a diversified, low-cost IRA portfolio while avoiding all trading commissions. TD Ameritrade’s higher mutual fund fees reduce cost-efficiency for IRAs.
Which is better for ESG and socially responsible investing?
Both Fidelity and TD Ameritrade offer hundreds of ESG-focused mutual funds and ETFs. Fidelity has a “Sustainable Investing Platform” that makes it easy to screen on ESG criteria when selecting investments.
Is it easy to transfer an account to Fidelity or TD Ameritrade?
Yes, you can request a full account transfer online in minutes. Fidelity and TD Ameritrade will handle contacting your old broker to move everything over seamlessly, with all fees reimbursed. Partial transfers are also possible.
Conclusion
Fidelity and TD Ameritrade both offer $0 stock and ETF trades, robust mobile apps and research tools, plus excellent customer service.
But Fidelity pulls ahead for most individual investors with no minimums to open an account, fractional share trading, and zero fees on thousands of mutual funds.
Active traders who utilize options, futures, or niche ETFs may find better value with TD Ameritrade. But Fidelity can still easily accommodate active trading with quality tools.
Ultimately, both brokers are outstanding choices to handle your investments in a modern, digital-friendly platform. The qualities that set Fidelity and TD Ameritrade apart are minor compared to their overall shared strengths.
Whichever you choose, you can invest with confidence and efficiency. Fidelity and TD Ameritrade provide secure, innovative platforms that make growing your wealth easy.
“If you don't find a way to make money while you sleep, you will work until you die.”
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