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Interactive Brokers vs. TD Ameritrade

Interactive Brokers vs TD Ameritrade Vary of Choices
Asset IBKR TDA
Brief Gross sales Sure Sure
No-Load, No-Charge Mutual Funds 8,300 4,300
Bonds Sure Sure
Futures/Commodities Sure Sure (futures solely)
Future Choices Sure Sure
Complicated Choices 4+ legs 4+ legs
Robo Advisory Sure Sure
Cryptocurrency Sure Bitcoin futures solely
Worldwide Exchanges 135 1 (Canada)
Foreign exchange Sure Sure
Fractional Shares Sure No
OTCBB and Penny Shares Sure Sure

Order Sorts

IBKR is a little more versatile than TDA in terms of order sorts. There is a versatile array of order sorts on the shopper portal and app, plus 100+ order sorts and algorithms on Dealer Workstation. TDA affords an honest number of order sorts, together with all of the fundamentals, trailing stops, and conditional orders. Right here once more, the hole between the 2 brokers is small from the attitude of most particular person buyers, however energetic merchants will worth the extra flexibility IBKR affords over TDA. 

Buying and selling Know-how

IBKR’s order execution engine routes orders to attain optimum execution, maximize rebates, and attain price improvement. The corporate doesn’t present execution pace statistics on its web site; nonetheless, it stories a mean internet worth enchancment of $0.47 per 100 shares. IBKR receives fee for order movement. The quantities differ by market heart however vary from $0 to $0.29 per share for fairness trades and $0.12 to $0.52 per choices contract.

TDA’s order routing algorithm seems for quick execution and worth enchancment. Third-party execution high quality statistics present an execution pace of 0.05 seconds and a mean internet worth enchancment of $1.75 per 100 shares. TDA receives $0.0012 per fairness share and $0.55 per choices contract in fee for order movement.

It’s troublesome to choose a winner right here since we don’t have entry to IBKR’s execution pace statistics—and its fee for order movement figures differ vastly. Nevertheless, primarily based on quick execution speeds, stable worth enchancment averages, and affordable fee for order movement numbers, we’d give this one to TDA. 

Prices

In comparison with many on-line brokers, IBKR’s pricing schedule is sophisticated. Shares and ETFs are $0 per share on the IBKR LITE Plan or $0.0005 to $0.0035 on the IBKR PRO Plan. Choices vary from as little as $0.15 to $0.65 per contract. Futures vary from as little as $0.25 to $0.85 per contract, relying in the marketplace and the way a lot you commerce. Dealer-assisted trades for big orders (10,000 share/100 contract minimal) price between $95 and $300, relying in the marketplace. For smaller positions, broker-assisted trades price $30 and are restricted to closing orders.

Comparatively, TDA wins in terms of clear pricing. On-line fairness, choices, and ETF trades are $0 (there is a $0.65 per contract possibility price), and futures are $2.25 per contract. There aren’t any platform or information charges, and broker-assisted trades run $25. Whether or not you’ll pay much less in commissions at IBKR or TDA will depend on what you commerce and the way energetic you’re. 

Nonetheless, IBKR is the clear winner in terms of margin rates of interest, that are among the lowest out there anyplace. For balances lower than $100,000, IBKR’s margin rate of interest is 1.56% on IBKR PRO accounts and a pair of.56% for IBKR LITE. By comparability, TDA’s margin charge for a similar steadiness is 7.75%. 

Account and Analysis Facilities

IBKR and TDA provide strong inventory, ETF, mutual fund, mounted revenue, and choices screeners that will help you discover your subsequent commerce. And each have quite a few instruments, calculators, concept turbines, {and professional} analysis. Whereas TDA’s choices are strong, IBKR comes out forward by way of information, with dozens of real-time streaming information sources out there on all platforms. Furthermore solely IBKR affords socially accountable investing (SRI)/ environmental, social, and governance (ESG) analysis functionality. Its Affect Dashboard—out there on TWS, the shopper portal, and the cell app—helps you consider and put money into corporations that align along with your values. In case you are searching for all of the analysis instruments you possibly can deal with, IBKR is the higher alternative.

Portfolio Evaluation

IBKR and TDA purchasers have entry to real-time shopping for energy and margin info, plus real-time unrealized and realized beneficial properties and losses. You may calculate your inner charge of return (IRR), view tax stories, and maintain observe of your mixed holdings by means of each brokers, however solely IBKR enables you to calculate the tax affect of future trades. Each brokers provide journals that will help you maintain observe of your buying and selling notes and concepts, however IBKR’s is among the extra complete buying and selling journals on the market. We discovered that these options give IBKR the sting in terms of portfolio evaluation. 

Schooling

IBKR and TDA provide spectacular lineups of instructional content material, however IBKR’s supplies are designed for a extra superior viewers. Its Merchants Academy is a structured, rigorous curriculum—full with quizzes and assessments—supposed for college students, buyers, and monetary professionals. Movies, a glossary, and each day webinars spherical out its instructional choices.

Along with articles, movies, and webinars, TDA hosts greater than 1,500 reside occasions annually. TDA comes out forward by way of its breadth of matters and beginner-friendly content material: There is a vary of immersive programs that covers fundamental investing and buying and selling concepts, plus a couple of superior matters. General, TDA is just the higher dealer for instructional content material. This is not to recommend IBKR’s choices are missing, however slightly an acknowledgement that TDA has sources for a wider vary of investor sorts and expertise ranges.

Buyer Service

General, we discovered TDA’s customer support affords higher flexibility and reliability. TDA has 24/7 help, reside chat capabilities for present and potential prospects, and chatbots on Twitter, Fb Messenger, Apple Enterprise Chat, and WeChat (in Asia). IBKR’s help operates 24 hours on enterprise days, and the corporate advises “solutions can oftentimes be discovered quickest and and not using a cellphone name straight from IBKR’s web site and Information Base.”

Whereas TDA says its common wait time on maintain for customer support is 43 seconds, IBKR stories “longer than standard wait instances on account of a rise in name and chat inquiries.” In case you are searching for a web-based dealer you possibly can come up with often and shortly, TDA is a greater match. 

Safety

IBKR and TDA meet or exceed {industry} safety requirements. Each provide two-factor authentication, biometric recognition, and extra SIPC protection. The Identity Theft Research Center reported no vital information breaches for both firm throughout 2020. Traders can believe within the safety requirements at both of those brokers.

Our Verdict

IBKR and TDA are well-respected {industry} powerhouses. Each help a wide array of buying and selling merchandise and provide customizable buying and selling platforms, however every dealer is finest suited to particular investor sorts. With distinctive order execution, low prices, and a professional-level buying and selling platform, IBKR is our prime decide for energetic merchants and anybody who needs entry to worldwide markets or inexpensive margin. As a result of its easy-to-use and intuitive platforms, complete instructional choices, reside occasions, and in-person assist at department places of work, TD Ameritrade is a greater possibility for newcomers. 

Consequently, selecting one over the opposite is extra about who you’re as an investor than any evident gaps between these two brokers. In case you are an energetic dealer, you may need IBKR. In case you are an off-the-cuff investor or dealer, TDA is a much less intimidating alternative with out giving up a lot in any respect by way of performance. 

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The affords that seem on this desk are from partnerships from which Investopedia receives compensation. This compensation could affect how and the place listings seem. Investopedia doesn’t embrace all affords out there within the market.

Methodology

Investopedia is devoted to offering buyers with unbiased, complete evaluations and rankings of on-line brokers. Our evaluations are the results of months of evaluating all points of a web-based dealer’s platform, together with the person expertise, the standard of commerce executions, the merchandise out there on its platforms, prices and charges, safety, the cell expertise and customer support. We established a score scale primarily based on our standards, gathering 1000’s of information factors that we weighed into our star-scoring system.

As well as, each dealer we surveyed was required to fill out an in depth survey about all points of its platform that we utilized in our testing. Lots of the on-line brokers we evaluated supplied us with in-person demonstrations of its platforms at our places of work.

Our staff of {industry} specialists, led by Theresa W. Carey, carried out our evaluations and developed this best-in-industry methodology for rating on-line investing platforms for customers in any respect ranges. Click here to read our full methodology.

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