E-trade and Vs TD Ameritrade. How they Compare

E-trade and Vs TD Ameritrade differ and compare in various ways. E-Trade is an online broker, while TD Ameritrade offers both online and offline trading options. Both offer free trades for new customers but the fees are different. The fee structure of each company also differs. In this article, we will discuss some differences between these two companies.

What Is A Fee?

A fee is basically money charged by any financial institution to its clients or users. It can be anything from a small amount like $1 per trade to as much as 10% on certain types of transactions. For example, if you buy stocks using margin, additional charges would be levied against your account. These charges vary depending upon which brokerage firm you use. Some firms charge more than others. So it’s important that you know what type of transaction costs you might incur before signing up with one particular firm.


How Do They Compare?

Both e-trade and TD Ameritrade have their own pros and cons. Let us look at them briefly:

E-trade Pros

• Free trades – You get 100 free trades when you open an account with e-trade. This includes stock trades, forex trades, ETFs, mutual fund shares etc. There are no minimum deposit requirements either. However, once you make a purchase, you need to pay a commission. If you want to avoid paying commissions altogether, you should consider opening an account with another discount broker such as Scottrade.com.

• No hidden fees – All fees associated with e-trade are clearly displayed on your monthly statements. Also, all fees are disclosed upfront so you don’t end up getting surprised later.

TD Ameritrade Cons

• High minimum deposits – To start off with, you must put down a minimum deposit of $500. Once you do that, you can choose whether you wish to invest through paperless investing or an electronic delivery system. Paperless investing involves sending checks directly to brokers whereas EDS requires you to send funds electronically.


• Fees – While e-trade does not levy any fees on cash accounts, TD Ameritrade has a flat rate of 0.25%. On top of that, they impose other fees too. For instance, they charge 1 cent per share traded plus a fixed percentage on securities held less than 3 months.

• Customer service – Although e-trade provides excellent customer support via phone and email, TD Ameritrade doesn't provide a 24/7 live chat facility. Their website is very slow sometimes. But overall, I find their customer service satisfactory.

Which One Should You Choose?

It depends entirely on how comfortable you feel about dealing with technology. If you prefer to deal with computers rather than people, go ahead and signup with e-trade. Otherwise, stick to TD Ameritrade because they have better customer service and lower fees.

Features of both Etrade vs. TD Ameritrade

Both Etrade and TD Ameritrade have similar features. Here are some key similarities:

Similarities Between Etrade And TD Ameritrade

• Account Types - Both allow you to create individual accounts and joint accounts.

• Trading Platforms - Both platforms let you access real-time quotes and charts.

• Brokerage Services - Both offer a full range of investment products, including equities, bonds, commodities, futures contracts, exchange-traded funds, mutual funds, options contracts, options trading, precious metals, private equity, REITs, warrants, and many more.

• Online Support - Both companies, provide online helpdesks for customers who face problems while making investments.

Differences between Etrade & TD Ameritrade

There are also differences in the way these two companies operate. The following points highlight the main difference between eTrade and TD Ameritrade:

Etrade Vs. TD Ameritrade Differences

  1) Fee Structure - As mentioned earlier, eTrade charges higher fees compared to TD Ameritrade. They charge a fee of 0.25% on cash accounts but only 0.15% on margin accounts. In addition, there are additional fees charged by eTrade if you hold stocks for less than three months. These include a one-cent per share transaction cost plus a fixed percentage on securities held less than six weeks. TD Ameritrade offers much cheaper rates. 2) Minimum Deposit - With eTrade, you need to make an initial deposit of at least $5,000 before opening your account. This amount will be deducted from your total balance every month. However, TD Ameritrade allows you to open an account without depositing anything.


3) Live Chat Facility - eTrade does not provide this feature. So, it would be difficult to get instant assistance when faced with technical issues.

4) Security Features - eTrade uses SSL encryption

  TD Ameritrade encrypts all data sent over its network using a Secure Socket Layer to protect your personal information. It also requires users to enter a password each time they log into their accounts.

Frequently Asked Questions about trade and Ameritrade.

Frequently Asked Questions about Etrade and Ameritrade

What is the best broker?

This is a very subjective topic that can vary depending on what type of investor you are. For example, someone who invests primarily through index funds might find novices such as Fidelity or Vanguard easier to use. On the other hand, those looking for high returns may want to consider Schwab or Charles Schwab.

How do I choose my brokerage firm?

You should look out for whether the company has been around long enough to have established itself well within the industry. You should check how often it makes changes to its services and technology. Also, ask yourself whether the company provides good customer service. If so, then you know that you will receive prompt responses to any questions you may have.

How do I transfer my stock portfolio from another brokerage firm to TradeKing?

 You must contact your current brokerage firm to request permission to move your holdings. Once you have received approval, you can initiate the process by contacting your new brokerage firm.

What is the minimum investment required to trade options?

Options trading involves risk and carries a substantial degree of leverage. Options involve contracts based upon underlying assets. When buying call options, investors pay premiums to purchase shares of the asset while selling put options. They sell them to lock up ownership of the asset. Because of the potential risks involved, many brokers require customers to invest a certain level of capital before allowing them access to options trades.

The minimum requirement varies between different firms. Some companies allow traders to start small and build up gradually; others limit investments to more significant amounts.

Can I trade in-the-money calls/puts?

Yes, you can. The difference between these two types of options is simply the strike price. Calls give the right to purchase 100 shares of the underlying security at a specific cost whereas puts offer the right to sell 100 shares of the same security at a specified price. Both options carry some form of a premium paid to the seller/writer of the contract.

I am not sure if I understand this correctly: Can I make more than one transaction per day with Etrade?

No, you cannot. However, there are several ways to get around this restriction. One way would be to open an account with multiple email addresses. Another method would be to create a separate user name and password for every single transaction. This could prove challenging when dealing with large orders, but it does provide flexibility.

Is ETrade available 24 hours a day?

Etrade offers online trading during regular business hours Monday through Friday, 9 am - 5 pm ET. During weekends and holidays, however, their website closes down completely. They also close early on Fridays after 4 pm.

How much money can I deposit into my eTrade account?

There is no maximum amount of funds that can be deposited into your eTrade account. Most people find that $10,000 or less is sufficient to begin investing.

Bottom Line

eTrade is a popular broker because it allows users to manage all aspects of their accounts via the Internet easily. It's easy to use and very convenient. Its low fees and simple interface help keep costs down as well. Although it doesn't offer direct market access like other major players such as Ameritrade and TD Waterhouse, it still manages to attract plenty of clients who want to take advantage of its features without having to deal directly with the markets themselves.