Each Interactive Brokers (IBKR) and TD Ameritrade (TDA) had been early entrants to the web brokerage house within the Nineteen Nineties, and have constantly earned recognition for know-how, analytical instruments, and availability of various merchandise to commerce. This 12 months, each brokers received quite a lot of classes. TD Ameritrade was high rated for newcomers, cellular, cellular choices, investor schooling, and customer support. Interactive Brokers has an excellent longer record of accolades, rating within the high for superior merchants, superior choices merchants, superior day merchants, day buying and selling on the whole, charting for day buying and selling, low margin charges, fractional share buying and selling, ETF analysis, and was our choose for finest for non-U.S. traders and finest for worldwide buying and selling by a large margin.
TD Ameritrade acquired thinkorswim in 2009, and incorporating this modern platform has helped maintain them on the forefront of buying and selling platform know-how. IBKR has developed its personal know-how, and regularly innovates from firm roots that return to the primary hand-held inventory buying and selling units. IBKR has lengthy been well-known by subtle merchants for its intensive array of product choices, together with futures, choices, overseas trade, and entry to a variety of worldwide markets, whereas TD Ameritrade has extra historical past on the retail aspect of the enterprise earlier than buying thinkorswim and including futures and complicated choices buying and selling instruments.
Each IBKR and TDA have lots to supply traders and merchants. We’ll have a look at each the similarities and variations between these two brokers so you may decide which may be the best match to your funding and/or buying and selling wants.
- Account Minimal: $0.00
- Charges: $0.00 commissions for equities/ETFs out there on IBKR’s TWS Lite, or low prices scaled by quantity for energetic merchants that need entry to superior performance corresponding to order routing. $0.65 per contract for choices on TWS Lite; that can be the bottom price for TWS Professional customers, with scaled charges based mostly on quantity. $0.85 per contract for futures.
- Account Minimal: $0.00
- Charges:
- $0.00 for equities/ETFs.$0.65 per contract for choices.Futures $2.25 per contract
Usability
As main on-line brokers, each TD Ameritrade and Interactive Brokers provide a variety of facilities for its clients. Each corporations present entry to streaming quotes, information, analysis, watchlists, charting/technical evaluation, fundamentals, calendars, and day by day commentary and market updates. Each brokers even have net, desktop, and cellular variations of the buying and selling platforms. TDA’s flagship program is thinkorswim, and that is the platform with the subtle instruments and options which can be immediately corresponding to IBKR’s Dealer Workstation (TWS). TD Ameritrade additionally has a less complicated net platform and two apps—one mirroring the online platform and one mirroring thinkorswim.
Interactive Brokers has added two new platforms. The GlobalTrader app helps cryptocurrency buying and selling and assists traders and merchants searching for alternatives in over 90 worldwide markets. Additionally, there’s Affect Cell which helps traders enthusiastic about environmental, social, and governance (ESG) investing. Along with these two, IBKR nonetheless has an internet Consumer Portal, IBKR Cell, and the sturdy Dealer Workstation.
Opening an account is smoother with TD Ameritrade, which makes the method of opening and funding an account straightforward through laptop or cellular. That is in all probability owing to the dealer’s lengthy expertise on the retail aspect. In distinction, IBKR’s course of is a little more difficult, although it has improved. The sheer breadth of choices on IBKR can overwhelm some much less skilled customers even because the dealer has made strides to be extra welcoming to retail traders.
We give the sting in usability to TD Ameritrade as a result of the account opening course of was smoother and the platforms are extra intuitive to make use of total—partially because of the truth that TDA’s providing is narrower than IBKR.
Commerce Expertise
Desktop Expertise
The 2 desktop buying and selling platforms, TWS and thinkorswim, each have good performance and a number of options merchants and traders would count on of main on-line brokers. Each platforms present nice customization, the flexibility to route orders, arrange customized defaults, choose tax tons, group orders, stage orders, and create very particular custom-made commerce orders that may make the most of standards corresponding to quantity, % acquire or loss, and lots of different particular knowledge items. Subtle traders and merchants will discover the expertise with both of those to be satisfying, though we’ve famous that TWS is evolving quicker than thinkorswim lately as IBKR continues so as to add belongings, markets, and options, whereas TD Ameritrade is maybe specializing in its remaining integration into Schwab.
Each IBKR and TDA have glorious platforms, with performance that surpasses most brokers. Whereas thinkorswim has a more recent appear and feel than IBKR, we price this class a tie, with IBKR being the higher alternative for entry to worldwide markets and extra asset courses.
Cell Expertise
TD Ameritrade gives two cellular choices, the easier TD America Cell app for extra passive traders and a thinkorswim app for energetic merchants. IBKR has IBKR Cell, which does job to place some group on the multi-country, multi-exchange, product choices on one platform. There’s additionally GlobalTrader, which is a extra streamlined expertise and truly one of the best on-ramp into IBKR for newer traders.
IBKR cellular and the thinkorswim app largely replicate the workstations, with pages for portfolio, watchlists, and the flexibility to simply arrange an order ticket or have a look at choices chains. Each apps additionally help a variety of order varieties, together with conditional orders and the simple capability to decide on an choices technique, corresponding to vertical and calendar spreads, butterfly, and condors utilizing drop downs. IBKR Cell doesn’t help drawing on charts. however charts do present orders which may be introduced as much as change or cancel. TDA has drawing instruments out there on its cellular charts. Additionally, watchlists sync between the desktop and cellular apps.
One limitation of TDA’s thinkorswim cellular app is its lack of help for fastened revenue buying and selling. Thinkorswim, nevertheless, permits customers to log onto each the desktop and cellular variations concurrently, whereas IBKR solely permits customers to go browsing to 1 platform at a time. That mentioned, IBKR helps buying and selling for all of its merchandise on its cellular platform.
The Google Play Retailer app critiques give a transparent edge to IBKR Cell with 4.5 stars from practically 15,000 critiques in comparison with 3.7 stars from over 11,000 critiques for thinkorswim cellular. Nonetheless, thinkorswim has stronger critiques on the Apple App Retailer with 4.7 stars from over 303,000 critiques in opposition to 4.2 stars from practically 4,000 critiques for IBKR Cell. It must also be famous that IBKR’s newer Affect app will get robust scores and each platforms. World Dealer’s scores are a bit decrease, however first rate as properly.
As our alternative for finest cellular app, we give this class to TDA’s thinkorswim app as a result of it’s a straightforward to make use of platform that does job of replicating the desktop expertise. That mentioned, IBKR has a wider vary of merchandise out there to commerce.
Vary of Choices
Each TD Ameritrade and Interactive Brokers have a variety of asset varieties out there to commerce on their platforms, together with shares/ETFs (lengthy and brief); OTCBB points, mutual funds, fastened revenue, futures/commodities, single and multi-leg choices, CDs, and overseas trade. There are some variations between the 2 brokers inside these classes, IBKR has over 19,000 no transaction price mutual funds in comparison with 3,710 from TD Ameritrade.
Entry to worldwide exchanges reveals a large disparity between brokers, as IBKR helps 150 market facilities in 33 nations, in comparison with ADR choices as TD Ameritrade’s restricted worldwide entry. For overseas trade buying and selling, IBKR gives 100 foreign money pairs utilizing 24 completely different currencies, the place TDA gives over 70 pairs.
Each brokers have set of choices, like futures, that aren’t broadly out there on different dealer platforms. Nonetheless, the breadth of merchandise from markets all world wide which can be all tradeable on Interactive Brokers’ platform is unmatched by TD Ameritrade or every other dealer. IBKR is the clear winner for its vary of choices.
Order Varieties
TD Ameritrade has a full suite of the most typical order varieties, corresponding to market, restrict, stop-limit, and trailing cease orders. The thinkorswim platform additionally permits conditional orders, together with one-cancels-the-other (OCO) and order-triggers-two (OTT). TDA additionally permits customers to stage orders for later entry and offers traders the flexibility to pick the tax lot when putting an order.
Interactive Brokers additionally has these identical orders out there, however goes a lot additional, supporting greater than 100 order varieties and algorithms on the TWS Professional platform. This permits customers to mix logical situations with OCO orders that allow customers use value, time, quantity, margin cushion, day by day P&L, % change, and different variables to create finely custom-made orders for place entry and exit. Even IBKR Lite has eight order varieties out there on its platform, together with the flexibility to make use of customized algorithms.
Whereas each brokers have a wide variety of order varieties to select from and most merchants will simply use these order varieties, IBKR goes a lot additional. General, IBKR has a transparent edge over TDA for order varieties.
Buying and selling Know-how
Each Interactive Brokers and TD Ameritrade have glorious know-how to help buying and selling. Each brokers enable automated buying and selling methods and the flexibility to stage and route their orders. Each corporations obtain fee for order circulate, that means that they earn a small sum of money for every commerce for sending it to a particular market maker. Nonetheless, each corporations are dedicated to serving clients and attaining robust value enchancment. Worth enchancment at IBKR is $0.0005 – $0.0035 per share for fairness trades and $0.15 – $0.65 per choices contract. TDA has value enchancment of $0.0116 per fairness share, and doesn’t disclose value enchancment for choices.
Each IBKR and TDA provide options not out there in any respect brokers, corresponding to securities lending and portfolio margining. There are some variations between the brokers, corresponding to IBKR’s help for fractional share buying and selling, which is unavailable at TDA. Nonetheless, TD Ameritrade gives backtesting, which is a characteristic not out there at most brokers, together with Interactive Brokers. Contemplating how a lot IBKR does to help skilled and complicated merchants, corresponding to its flexibility with order varieties, it’s stunning that backtesting is just not out there from IBKR. Additionally of notice in a rising rate of interest setting, IBKR pays 4.58% curiosity as of Could 5, 2023 on money balances over $10,000, whereas TDA pays simply 0.35% on money.
With backtesting and higher value enchancment, we give TDA the benefit over IBKR for buying and selling know-how.
Prices
IBKR has completely different fee and price schedules for the assorted nations it has clients in; we’ll give attention to US dollar-based commissions on this assessment. IBKR has a extra difficult fee construction for equities and ETFs as a result of there are three choices: IBKR Lite, IBKR Professional Fastened, and IBKR Professional Tiered. IBKR Lite is a zero fee mannequin for shares and ETFs, and $0.65 per choices contract. IBKR Professional Fastened fees $0.005 per share traded, with a minimal fee of $1 and most of 1% of the commerce worth. IBKR Professional Tiered has a scaled fee price based mostly on month-to-month quantity, with a minimal of $0.35 and most of 1% of the commerce worth. The tiered pricing is $0.0035 per share as much as 300,000 shares; $0.002 to three million shares; $0.0015 as much as 20 million shares; $0.001 to 100 million shares; then $0.0005 per share.
IBKR Professional choices pricing can be tiered based mostly on month-to-month quantity. There isn’t a per-leg price for buying and selling choices. Buying and selling as much as 10,000 contracts, you may pay $0.65 per contract for choices trades with a minimal fee of $1. Low worth contract charges drop to $0.50 (premium $0.05–$0.10) or $0.25 (premium beneath $0.05). These charges go down in tiers till after 100,000 contracts in a month, the place the choices fee drops to simply $0.15 per contract.
Much less energetic merchants searching for zero fee buying and selling will probably select IBKR Lite, however greater quantity merchants will in all probability gravitate to the IBKR Professional mannequin, figuring out whether or not the tiered or fastened mannequin is finest for them based mostly on their buying and selling exercise. The best quantity merchants will gravitate in the direction of the tiered mannequin.
IBKR additionally has trade main margin charges. Margin charges are tiered for IBKR Professional customers, with a price of 6.58% (base price + 1.5%) as much as $100,000, and a low margin price of 5.58% (base price + 0.5%), whereas IBKR Lite fees a hard and fast 7.58% (base price + 2.5%) price no matter quantity.
TD Ameritrade has a a lot easier fee schedule, with no cost for inventory and ETF trades, and $5 + $0.65 per contract for choices. TDA’s margin charges are additionally tiered from 14.50% (base price + 1.25%) for lower than $10,000, to 12.50% (base price – 0.75%) between $250,000 and $499,999.99.
Though TD Ameritrade has trade aggressive zero fee inventory and ETF buying and selling, and $0.65 per contract for choices trades, IBKR has higher pricing. IBKR Lite matches TDA, however energetic, high-volume merchants specializing in execution pace and management over order routing will think about IBKR Professional’s cheap charges. For choices merchants, the $0.65 most cost at IBKR (decrease for prime quantity accounts) remains to be decrease than TDA’s fastened $0.65 per contract price for all choices no matter month-to-month buying and selling quantity. For futures merchants, TDA’s $2.25 per contract is greater than 2.5 occasions greater than IBKR’s highest price of $0.85. IBKR is the clear winner on prices in comparison with TDA.
Analysis Facilities
Interactive Brokers and TD Ameritrade have glorious analysis facilities, corresponding to inventory, ETF, mutual fund, and stuck revenue screeners, in addition to a number of instruments, calculators, and concept turbines alongside piles {of professional} analysis. For each brokers, customers can construct their very own screens, display screen based mostly on technical components, save screens for future use, and create a watchlist from display screen outcomes.
Interactive Brokers has two screeners for ESG/SRI and choices which can be unavailable at TDA. Additional, the buying and selling concept generator at TDA is proscribed to coated name and calendar spreads from CFRA (previously the Middle for Monetary Analysis and Evaluation), whereas IBKR permits scans on nearly limitless standards, and in addition offers actionable information and analysis that features analyst suggestions. TDA gives day by day market reviews, fee-based analysis, and reviews from Market Edge, Argus, CFRA, and extra. IBKR additionally gives a day by day market report, in addition to a number of premium market analysis and information suppliers with no extra value.
Each brokers have above-average analysis facilities, however IBKR has the higher suite of analysis facilities due to the ESG/SRI and choices screeners unavailable at TDA in addition to extra intensive information and analysis choices.
Portfolio Evaluation
IBKR’s PortfolioAnalyst is a powerful providing. The total model with superior options and real-time updates is offered to clients and a much less sturdy model is offered to anybody. PortfolioAnalyst tracks and analyzes monetary accounts, together with linked accounts corresponding to checking, financial savings, and debt, so that you get evaluation in your whole monetary image. Realized positive factors/losses, web deposits, margin, and shopping for energy are all out there in actual time. Performance on PortfolioAnalyst additionally features a portfolio checkup that reveals whole return, danger, and allocations. IBKR additionally calculates a portfolio’s ESG scores. IBKR additionally has a proprietary Tax Optimizer that lets customers set their most well-liked matching technique and offers a preview of earnings and losses for every technique. Lastly, IBKR has a wonderful Dealer’s Journal, which permits customers to document and save buying and selling notes and concepts, together with the flexibility so as to add screenshots and configure charts to point out orders and executed trades.
TDA additionally has good portfolio evaluation instruments, together with the flexibility to consolidate exterior belongings for reporting and evaluation by its Personalised Portfolios instruments. Realized and unrealized positive factors/losses, web deposits, withdrawals, and margin and shopping for energy are all in actual time, however the tax affect of future trades is just not out there. Capital positive factors reporting is offered from the web site month-to-month.
Each TDA and IBKR present good portfolio evaluation instruments for his or her clients, however IBKR has the sting on this class due to the flexibility to research the tax affect of trades. IBKR additionally has higher commerce journaling capabilities.
Schooling
Interactive Brokers has sturdy investor education schemes out there to clients and the general public. This consists of brief movies for purchasers to learn to use the TWS and shopper portals in addition to multi-language content material to assist worldwide customers with the platform. IBKR’s Merchants Academy is offered on-line, on demand, and offers a rigorous curriculum full with quizzes and assessments to assist college students gauge their progress in opposition to targets. Content material consists of details about asset courses, markets, technical evaluation, particular belongings, and IBKR platform performance. There’s additionally extra detailed and particular content material, corresponding to a bit on hedging with grain and oilseed futures and choices that reveals why IBKR is our high choose for superior merchants. IBKR has been increasing its instructional choices to incorporate day by day webinars with varied subjects, corresponding to product schooling and platform instruments.
TDA is our high choose for investor schooling as a result of it has all the data you may ask for tailor-made to each stage of investor. Along with detailed info on find out how to use the platform, TDA has instructional info segmented for private finance, investing, buying and selling, and retirement. It additionally has content material on technical evaluation and product particular info, corresponding to choices methods and superior ideas like choices unfold buying and selling. Additionally a optimistic for investor schooling, each Interactive Brokers and TD Ameritrade provide real-time paper buying and selling utilizing their precise platforms.
As our high choose for instructional sources amongst all brokers is TD Ameritrade, it additionally comes out on high of IBKR within the schooling class due to the breadth of fabric and adaptation for all ranges of investor.
Buyer Service
TD Ameritrade and Interactive Brokers present a variety of customer support choices, together with e-mail, stay chat, telephone help, entry to stay brokers (there are charges for broker-assisted buying and selling), and a useful FAQ part. TD Ameritrade clients may also converse with a monetary advisor. IBKR, which has been investing in higher customer support and quicker response occasions, additionally has an AI-powered IBot that may obtain questions requested by a buyer in plain English and direct customers to useful sources, corresponding to FAQs. IBKR encourages its clients to make use of the IBot as the primary customer support, quite than a stay individual. IBKR can be slower in answering telephones than TDA, although the dealer has improved.
TDA is our high choose for customer support total within the 2022 assessment cycle. It has the sting within the customer support class over IBKR as a result of its reps are a lot faster to reply the telephone and the corporate makes registered funding advisors (RIAs) out there to clients, whereas IBKR doesn’t.
Safety
Each IBKR and TDA meet or exceed trade requirements for safety. Neither dealer has skilled an information breach or outage previously 12 months. Each brokers provide two-factor authentication and biometric recognition. Extra SIPC safety can be provided by each brokers, though TDA gives higher extra protection, with IBKR offering $30 million in account safety and $900,000 for the money sublimit, whereas TDA gives in account safety of $149.5 million and a money sublimit of $2 million.
IBKR additionally gives a Securities Class Motion Restoration service, which robotically detects if a buyer is eligible to file a declare for a category motion lawsuit. IBKR submits the declare and assists to recuperate funds for a 20% contingency price.
When it comes to safety, it’s successfully a tie. TD Ameritrade does have extra extra protection, however the insurance coverage at each companies is above trade requirements. Equally, IBKR’s Securities Class Motion Restoration service is a neat characteristic, however it doesn’t make the platform any safer than it already is.
Last Verdict
Now we have a little bit of a break up resolution on this. Each TD Ameritrade and Interactive Brokers are elite corporations within the on-line brokerage world, with roots within the early days of on-line investing. This shines by of their glorious know-how and entry to a wide selection of merchandise not out there for buying and selling on many on-line brokerage platforms. IBKR is our alternative as finest dealer for each superior merchants and worldwide buying and selling, whereas TD Ameritrade is our alternative for finest dealer for newcomers and cellular. True to those rankings, IBKR is the higher suited platform for probably the most subtle and excessive quantity merchants. TDA offers simpler to make use of platforms and glorious instructional supplies to assist newer traders and merchants, making TDA a more sensible choice for brand spanking new and fewer energetic merchants.
General, the platforms have an excessive amount of overlap of their performance, so both platform will meet the wants of practically all U.S.-focused traders and merchants, particularly since IBKR Lite offers a comparable no-commission platform with decrease choices pricing than TDA. The better to make use of and be taught from platform is TDA, so that’s more likely to appeal to traders and fewer energetic merchants that additionally need some entry to classy instruments and choices markets. Nonetheless, merchants who need entry to markets across the globe, merchants who use margin, high-volume merchants, and futures merchants will probably select IBKR. For some merchants, one other issue which may tip the dimensions in favor of IBKR is the provision of cryptocurrency buying and selling (not out there on TDA) and the brand new Affect app for the ESG-conscious. On the entire, nevertheless, traders are properly served by both of those high rating platforms.
Methodology
Investopedia is devoted to offering traders with unbiased, complete critiques and scores of on-line brokers. This 12 months, we revamped the assessment course of by conducting an intensive survey of shoppers which can be actively trying to begin buying and selling and investing with an internet dealer. We then mixed this invaluable info with our subject material experience to develop the framework for a quantitative scores mannequin that’s on the core of how we compiled our record of one of the best on-line dealer and buying and selling platform corporations.
This mannequin weighs key components like buying and selling know-how, vary of choices, cellular app usability, analysis facilities, instructional content material, portfolio evaluation options, buyer help, prices, account facilities, and total buying and selling expertise in response to their significance. Our staff of researchers gathered 2425 knowledge factors and weighted 66 standards based mostly on knowledge collected throughout intensive analysis for every of the 25 corporations we reviewed.
Most of the brokers we reviewed additionally gave us stay demonstrations of their platforms and providers, both at their New York Metropolis workplaces or through video conferencing strategies. Dwell brokerage accounts had been additionally obtained for many of the platforms we reviewed, which our staff of knowledgeable writers and editors used to carry out hands-on testing so as to lend their qualitative standpoint.
Learn our full Methodology for reviewing on-line brokers.