Fidelity Investments and TD Ameritrade are two of the most popular online discount brokers, and both regularly score well in Bankrate ratings of the top brokers.
In fact, Fidelity earned the highest overall marks in our 2023 rating of major online brokers, with TD Ameritrade just a notch behind. Fidelity is an excellent choice for customer support, research and its no-fee fund offering, while TD Ameritrade stands out for its trading platform, wide selection of tradeable securities and customer service. (It’s worth noting that TD Ameritrade was purchased by Charles Schwab and is being integrated into that broker’s platform.)
So which is better for you? That depends not only on what the broker offers, but also on what features you need. Here’s how the brokers compare on some of the most common characteristics.
| Broker category | Fidelity | TD America |
|---|---|---|
| Stock and ETF commissions | $0 | $0 |
| Option committees | $0.65 per contract | $0.65 per contract |
| Minimum account | $0 | $0 |
| Marketable securities | Stocks, ETFs, bonds, mutual funds, options | Stocks, ETFs, bonds, mutual funds, options, futures, forex |
| Account fees | No annual, activity or transfer fees | Transfer costs 75,- |
| Investment funds without transaction costs | 3,300+ | 3,600+ |
| Account types | Individually and jointly taxable, IRAs, small businesses (SEP IRA, solo 401(k), etc.), custodial, 529, HSA, managed portfolio, charities and trusts, among others | Individually and jointly taxable, IRAs, small businesses (SEP IRA, solo 401(k), etc.), custodial, 529, managed portfolio and trust, among others |
| Mobile app | Fidelity Mobile app on the Apple App Store, Google Play Store and Amazon | TD Ameritrade Mobile and thinkorswim mobile apps on the Apple App Store and Google Play Store |
| Fractional shares | For purchases and reinvestment of dividends | Only for dividend reinvestment |
| Customer support | Telephone 24/7 accessibility, chat, e-mail, 200+ locations | 24/7 telephone availability, Facebook and Twitter messages, 150+ locations |
Costs
In a number of areas related to costs, Fidelity and TD Ameritrade are neck and neck. Both charge no commission on stock and ETF trades, while options trades cost $0.65 per contract, right at current industry standard.
Both brokers offer thousands of investment funds without transaction fees. Although TD Ameritrade offers more such funds, Fidelity’s selection is easily broad enough to find what you’re looking for. It’s like going to a buffet: extra choices only matter if you actually eat them.
Both brokers are frugal friendly, with limited account fees. However, you won’t notice any significant differences until you close your account, when TD Ameritrade charges $75 for a transfer, while Fidelity charges nothing. So Fidelity gets a slight edge in this area.
Minimum account
You can’t get better than no account minimum, and both TD Ameritrade and Fidelity allow new investors to start with nothing, making them among the top choices for new investors.
Marketable securities
Fidelity and TD Ameritrade have some clear differences in the types of securities you can invest in, and the latter is the clear winner in terms of sheer numbers.
While Fidelity offers the standard range (stocks, ETFs, bonds, mutual funds and options), TD Ameritrade also ups the ante with forex and futures. These additional choices may be attractive to traders looking to get into more esoteric corners of the market.
That said, Fidelity’s selection will work well for almost all investors looking for attractive returns.
Account types
Fidelity and TD Ameritrade offer a similarly wide choice of account types, so you can expand your relationship with the broker as your needs change.
Both offer standard account types such as individual and joint taxable accounts, IRA accounts (Roth IRA, traditional IRA and rollovers), small business retirement accounts (SEP IRA, SIMPLE IRA and solo 401(k)) and 529 accounts. Each offers managed portfolios and trust accounts. Fidelity also offers HSA accounts, which some individuals actually use as retirement accounts.
Both brokers offer a wide variety of account types, and it will be hard to go wrong here.
Fractional shares
Fidelity differs from TD Ameritrade in terms of fractional shares. While TD Ameritrade only allows you to reinvest your dividends in partial shares, Fidelity allows this feature as well as the purchase of partial shares. In fact, you can buy more than 7,000 stocks and ETFs with Fidelity’s fractional program, which is among the highest tier of any broker.
Customer support
In terms of customer support, TD Ameritrade and Fidelity offer access through three main channels: phone, chat or messaging, and in-branch. Both offer 24/7 customer support by phone, while chat support can be through a third party such as Facebook or Twitter. Both brokers also offer a similar number of branches – although Fidelity’s network is larger – where you can get personal help if you need it.
Other factors
Naturally, these brokers are not comparable on all dimensions. Each offers some benefits that the other does not. In the case of TD Ameritrade, because it typically targets advanced traders, it offers simulated trading through what it calls paperMoney. You start with $100,000 in virtual money and a margin account, and you can use the broker’s robust thinkorswim trading platform, one of its top features, to hone your skills or see how you fare.
For mutual fund fans, Fidelity offers its ZERO collection of funds with no expense ratio. It is the first company to offer zero-fee mutual funds, although you don’t have to be a client of the broker to buy them. A Fidelity ZERO fund is in our list of the best index funds.
It’s also worth noting that Charles Schwab merges TD Ameritrade accounts with its own platforms, so you’ll want to feel comfortable with that brokerage if you plan to go with TD Ameritrade. Schwab plans to also transfer the highly regarded thinkorswim platform.
In short
Fidelity and TD Ameritrade are exceptional brokers in almost every way, offering similar features and being investor-friendly. So what will likely separate one from the other is what you need in a real estate agent. For example, if you need fractional buying, Fidelity is probably a better choice, while those who need a simulator and a robust trading platform might be a better fit for you. That said, opening multiple investment accounts can also have some important benefits.
