Robinhood vs. TD Ameritrade - Which Broker Should You Choose? (2024)

Robinhood vs. TD Ameritrade

While there were relatively few commission-free brokerages only a few years ago, there are now many options to choose from. That includes Robinhood, one of the pioneers of commission-free trading, and TD Ameritrade, a long-standing behemoth in the retail trading world.

These two brokers offer trading on many of the same stocks and products, but they differ in a number of important ways. We’ll compare Robinhood vs. TD Ameritrade head to head to help you determine which of these two free stockbrokers is right for you.

About Robinhood And TD Ameritrade

Robinhood made waves in the brokerage industry when it launched in 2013 as a mobile-only, commission-free platform. In fact, the widespread adoption of Robinhood by retail traders is arguably what pushed many traditional brokers to offer lower-cost or commission-free trading. Today, Robinhood has amassed more than 13 million users, many of them first-time traders, and manages an estimated $20 billion in user assets. The company itself is valued at over $8 billion.

TD Ameritrade has been around since 1975 and has grown in size and reach through a series of acquisitions. Today, the brokerage boasts around 11 million users and more than $1 trillion in assets under management. Importantly, TD Ameritrade was bought by Charles Schwab in 2019, and the platform will likely be merged with Schwab over the next several years. However, it is unclear whether or to what extent the features and investment offerings will change.

Robinhood vs. TD Ameritrade: Fees

Both Robinhood and TD Ameritrade offer commission-free trading for stocks and ETFs. That’s one of the biggest draws to each of these brokers, although more and more competitors are now offering commission-free trading.

There are still fees you should know about, though. TD Ameritrade charges $0.65 per options contract, while options trading is completely free on Robinhood. TD Ameritrade also $44.99 for broker-assisted trades and $49.99 for mutual funds that aren’t offered for free. Robinhood doesn’t offer either broker-assisted trading or mutual funds.

The cost of trading on margin is also slightly different between these two brokers. With TD Ameritrade, interest charges vary based on how much you’re borrowing but generally range from 7.5% to 9.5%. At Robinhood, you must buy a Gold subscription for $5 per month to access margin trading, and there is then a 5% interest fee no matter how much you borrow.

Robinhood vs. TD Ameritrade: Tradable Assets

When it comes to the diversity of assets you can trade, TD Ameritrade has the upper hand by a wide margin.

Both Robinhood and TD Ameritrade offer trading for a vast majority of US stocks, including all stocks trading on major exchanges. Better yet, you can buy and sell fractional shares through either broker. Although neither platform gives you access to international stocks, they do offer American depository receipts (ADRs) for trading some notable foreign companies. Robinhood currently offers around 250 ADRs, while TD Ameritrade offers over 1,000.

TD Ameritrade also offers a much wider selection of ETFs. You can trade virtually any ETF on the NYSE and Nasdaq through this broker, while Robinhood offers trading on only around 500 ETFs. TD Ameritrade also gives you access to more than 12,000 mutual funds, of which 1,955 trade commission-free. Robinhood doesn’t offer any trading on mutual funds.

Both platforms offer options trading, although only TD Ameritrade allows you to enter multi-leg orders at this time. You can create multi-leg strategies with Robinhood, but you need to place the orders separately.

Both Robinhood and TD Ameritrade also offer cryptocurrency trading. You can trade several top coins directly with Robinhood, including Bitcoin, Ethereum, and Dogecoin. TD Ameritrade currently only offers Bitcoin futures.

Most other asset classes are available through TD Ameritrade, but not through Robinhood. TD Ameritrade supports forex trading as well as commodity and index futures trading.

Robinhood vs. TD Ameritrade: Account Types

Robinhood is also extremely limited when it comes to what types of accounts you can open. This broker offers standard trading accounts only, and does not have retirement account options. Robinhood is currently in the process of rolling out a cash management account, which is effectively a money market account for your uninvested cash.

TD Ameritrade offers the range of account types that you might expect from a more established brokerage firm. You can open standard investing accounts, traditional, Roth, or SEP IRAs, education savings accounts, individual pensions, trusts, corporate accounts, and more. TD Ameritrade also offers managed accounts through a robo advisor, although these can have steep fees and high minimum deposits.

Robinhood vs. TD Ameritrade: Platforms And Research Tools

The most significant difference between Robinhood and TD Ameritrade is in the platforms and tools they provide for investors. Robinhood is streamlined and stripped down, which makes it appealing for newer investors who want a simpler trading experience. TD Ameritrade offers a much more in-depth web interface and Thinkorswim, a comprehensive trading and charting platform, that caters to intermediate and advanced investors.

The thing that beginner investors love and many experienced investors hate about Robinhood is that the platform almost entirely lacks research tools. Robinhood displays simple line graphs rather than technical price charts, and there are no technical indicators or calculators for fundamental analysis available. There’s a news feed where you can find stories about stocks you’ve bought in the past, but you can’t create your own custom watchlists.

Notably, Robinhood Gold subscribers do get access to a little bit more data. With Gold, you can monitor Level II trading data as well as read through professional research reports for around 1,700 stocks.

However, significantly more research than that and Level II data is available for free with TD Ameritrade. The broker not only lets you create watchlists, but if you use Thinkorswim, you can access highly customizable scanners to highlight trading opportunities that fit into your strategy. You can also access advanced technical charts, create your own technical studies, and set up price alerts. In fact, Thinkorswim is arguably one of the most powerful technical analysis and trading platforms currently on the market – and it’s completely free with a TD Ameritrade account.

Of course, having an extremely powerful trading platform means that there is a steep learning curve to navigate. The time it takes to get started can be off-putting to newer investors, although getting started with Thinkorswim for charting alone isn’t overly difficult. TD Ameritrade also recently released web and mobile versions of Thinkorswim to better compete with Robinhood’s mobile-first approach to trading.

Robinhood vs. TD Ameritrade: Customer Support

One other important difference between Robinhood and TD Ameritrade is the level of support that is available. Robinhood only offers help by email, whereas TD Ameritrade representatives are available 24/7 over the phone and by live chat.

Which Service Is Better?

Whether Robinhood or TD Ameritrade is better depends in part on your trading goals and in part on how willing you are to navigate complexity in exchange for more features.

The two brokers are essentially equivalent on price, and TD Ameritrade wins handily when it comes to the variety of assets you can trade, the types of accounts you can open, and the level of support available. If you need to open a retirement account or want to trade mutual funds, forex, or futures, there’s no question that TD Ameritrade is the better choice for you. TD Ameritrade is also the better choice for technical analysis thanks to the impressive Thinkorswim trading platform.

Given all that, we would recommend TD Ameritrade over Robinhood for the vast majority of investors. However, Robinhood’s simplicity has extremely strong appeal, particularly for entry-level traders. As long as you recognize the limitations of this platform, it can be a good choice for basic stock, ETF, and options trading.

Alternatives To Robinhood And TD Ameritrade

There are several major commission-free brokers that compete directly with Robinhood and TD Ameritrade. E*TRADE and Charles Schwab (which now owns TD Ameritrade) stand out because they offer free access to their research and analysis platforms, which are somewhat easier to navigate than Thinkorswim. They also each offer options, future, and forex trading similar to TD Ameritrade.

For a broker that looks more like Robinhood but offers a larger set of features, consider Webull. This mobile-first brokerage features the same simple interface as Robinhood, but offers simple technical charts and some basic indicators to enable more analysis.

Conclusions: Robinhood vs. TD Ameritrade

Robinhood and TD Ameritrade are two extremely popular commission-free brokers that offer trading on US stocks, options, and ETFs. However, TD Ameritrade has a much greater breadth and depth, giving traders access to forex, futures, and mutual fund trading as well as a wide variety of account types. TD Ameritrade also gives account holders a comprehensive research and analysis platform, while Robinhood puts simplicity first by limiting the platform’s technical features.