Interactive Brokers vs. TD Ameritrade

Interactive Brokers (aka “IBKR”) and TD Ameritrade (TDA) are large, full-service brokers that have been around for decades. IBKR boasts low costs, excellent trading tools, superior trade execution, and a vast lineup of trading assets. TD Ameritrade (TDA) offers an AI-powered educational experience and was recently acquired by Charles Schwab, forming one of the largest brokerage firms in the world. Although IBKR and TDA have a lot in common, we’ll look at some of the key differences to help you determine which is better for your investment and trading needs.

  • Account Minimum: $0
  • Fees: Maximum $0.005 per share for Pro platform or 1% of trade value, $0 for IBKR Lite
Read full review
  • Account Minimum: $0
  • Fees: Free stock, ETF, and per-leg options trading commissions. $0.65 per options contract.
Read full review

Usability

We found it’s easier to get started with TDA, where you can open and fund an account via the website or mobile app. The onboarding process at IBKR has improved, but it’s still complicated, and you might need help from customer service to complete the application.

Both IBKR and TDA offer news, watchlists, research, and charting across their respective web, desktop, and mobile platforms. While each broker offers streaming quotes, TDA’s are (oddly) delayed by default, which means you could miss key market moves—but you can enable real-time quotes in your account profile. Both brokers offer multiple platforms, including web, mobile, and the advanced desktop versions. Overall, TDA is likely a better fit for beginners as well as more experienced traders who will appreciate thinkorswim’s (TOS) intuitive workflow. Active traders—and especially those who want to trade international markets—may find a better fit with IBKR’s Trader Workstation (TWS).

Trade Experience

Desktop Trade Experience

IBKR and TDA offer good web-based trading platforms. One TDA plus is the trade bar that displays at the bottom of every screen, which makes easy work of entering stock, ETF, and options orders. 

Both brokers have robust, customizable desktop trading platforms that support advanced order types and chart trading capabilities. You can also stream quotes on multiple devices simultaneously, select a tax lot before placing an order, stage orders for later entry, and enter multiple orders at the same time with either broker. 

Thinkorswim comes out ahead with more technical indicators, a modern look and feel, and streaming video news (a feature that’s missing on TWS). IBKR’s TWS is powerful, but expect a comparatively outdated looking platform with a steeper learning curve. Overall, traders will find all the tools they need on either platform, but the edge here from a pure trading perspective is too close to call.

Mobile Trade Experience

IBKR offers one mobile app (“IBKR Mobile), while TDA has two: the beginner-friendly TD Ameritrade Mobile App and thinkorswim Mobile, designed for active traders. According to user ratings on the App Store, TDA’s apps are more popular. IBKR Mobile has 3.0 stars from about 1,200 reviews on the App Store. TD Ameritrade Mobile has 4.5 stars from 91,000+ reviews, and thinkorswim has a 4.7-star rating from some 242,000 reviews.

Overall, we found the TDA apps intuitive and easy to use, while IBKR’s seemed a bit buggy. Despite the greater ease of use of TDA, we should note that IBKR supports the same asset classes across platforms while TDA does not offer fixed income trading on mobile.

Range of Offerings

IBKR and TDA offer most of the usual suspects you’d expect from a large brokerage. Still, TDA doesn’t support commodity or fractional share trading, so IBKR has the edge here. More recently, Interactive Brokers has added cryptocurrency coins to its tradable assets in addition to Bitcoin futures, whereas TDA only offers Bitcoin futures. IBKR is also the clear leader in international trading, providing access to 135 exchanges—using 23 currencies across 33 countries—all from a single account.

Interactive Brokers vs TD Ameritrade Range of Offerings
Asset IBKR TDA
Short Sales Yes Yes
No-Load, No-Fee Mutual Funds 8,300 4,300
Bonds Yes Yes
Futures/Commodities Yes Yes (futures only)
Future Options Yes Yes
Complex Options 4+ legs 4+ legs
Robo Advisory Yes Yes
Cryptocurrency Yes Bitcoin futures only
International Exchanges 135 1 (Canada)
Forex Yes Yes
Fractional Shares Yes No
OTCBB and Penny Stocks Yes Yes

Order Types

IBKR is a bit more versatile than TDA when it comes to order types. There’s a flexible array of order types on the client portal and app, plus 100+ order types and algorithms on Trader Workstation. TDA offers a decent selection of order types, including all the basics, trailing stops, and conditional orders. Here again, the gap between the two brokers is small from the perspective of most individual investors, but active traders will value the additional flexibility IBKR offers over TDA. 

Trading Technology

IBKR’s order execution engine routes orders to achieve optimal execution, maximize rebates, and attain price improvement. The company does not provide execution speed statistics on its website; however, it reports an average net price improvement of $0.47 per 100 shares. IBKR receives payment for order flow. The amounts vary by market center but range from $0 to $0.29 per share for equity trades and $0.12 to $0.52 per options contract.

TDA’s order routing algorithm looks for fast execution and price improvement. Third-party execution quality statistics show an execution speed of 0.05 seconds and an average net price improvement of $1.75 per 100 shares. TDA receives $0.0012 per equity share and $0.55 per options contract in payment for order flow.

It’s difficult to pick a winner here since we don’t have access to IBKR’s execution speed statistics—and its payment for order flow figures vary greatly. However, based on fast execution speeds, solid price improvement averages, and reasonable payment for order flow numbers, we’d give this one to TDA. 

Costs

Compared to many online brokers, IBKR’s pricing schedule is complicated. Stocks and ETFs are $0 per share on the IBKR LITE Plan or $0.0005 to $0.0035 on the IBKR PRO Plan. Options range from as low as $0.15 to $0.65 per contract. Futures range from as low as $0.25 to $0.85 per contract, depending on the market and how much you trade. Broker-assisted trades for large orders (10,000 share/100 contract minimum) cost between $95 and $300, depending on the market. For smaller positions, broker-assisted trades cost $30 and are limited to closing orders.

Comparatively, TDA wins when it comes to transparent pricing. Online equity, options, and ETF trades are $0 (there’s a $0.65 per contract option fee), and futures are $2.25 per contract. There are no platform or data fees, and broker-assisted trades run $25. Whether you’ll pay less in commissions at IBKR or TDA depends on what you trade and how active you are. 

Still, IBKR is the clear winner when it comes to margin interest rates, which are some of the lowest available anywhere. For balances less than $100,000, IBKR’s margin interest rate is 1.56% on IBKR PRO accounts and 2.56% for IBKR LITE. By comparison, TDA’s margin rate for the same balance is 7.75%. 

Account and Research Amenities

IBKR and TDA offer robust stock, ETF, mutual fund, fixed income, and options screeners to help you find your next trade. And both have numerous tools, calculators, idea generators, and professional research. While TDA’s offerings are robust, IBKR comes out ahead in terms of news, with dozens of real-time streaming news sources available on all platforms. Moreover only IBKR offers socially responsible investing (SRI)/ environmental, social, and governance (ESG) research capability. Its Impact Dashboard—available on TWS, the client portal, and the mobile app—helps you evaluate and invest in companies that align with your values. If you are looking for all the research tools you can handle, IBKR is the better choice.

Portfolio Analysis

IBKR and TDA clients have access to real-time buying power and margin information, plus real-time unrealized and realized gains and losses. You can calculate your internal rate of return (IRR), view tax reports, and keep track of your combined holdings through both brokers, but only IBKR lets you calculate the tax impact of future trades. Both brokers offer journals to help you keep track of your trading notes and ideas, but IBKR’s is one of the more comprehensive trading journals out there. We found that these features give IBKR the edge when it comes to portfolio analysis. 

Education

IBKR and TDA offer impressive lineups of educational content, but IBKR’s materials are designed for a more advanced audience. Its Traders Academy is a structured, rigorous curriculum—complete with quizzes and tests—intended for students, investors, and financial professionals. Videos, a glossary, and daily webinars round out its educational offerings.

In addition to articles, videos, and webinars, TDA hosts more than 1,500 live events each year. TDA comes out ahead in terms of its breadth of topics and beginner-friendly content: There’s a range of immersive courses that covers basic investing and trading ideas, plus a few advanced topics. Overall, TDA is simply the better broker for educational content. This isn’t to suggest IBKR’s offerings are lacking, but rather an acknowledgement that TDA has resources for a wider range of investor types and experience levels.

Customer Service

Overall, we found TDA’s customer service offers better flexibility and reliability. TDA has 24/7 support, live chat capabilities for current and prospective customers, and chatbots on Twitter, Facebook Messenger, Apple Business Chat, and WeChat (in Asia). IBKR’s support operates 24 hours on business days, and the company advises “answers can oftentimes be found quickest and without a phone call directly from IBKR’s website and Knowledge Base.”

While TDA says its average wait time on hold for customer service is 43 seconds, IBKR reports “longer than usual wait times due to an increase in call and chat inquiries.” If you are looking for an online broker you can get a hold of frequently and quickly, TDA is a better fit. 

Security

IBKR and TDA meet or exceed industry security standards. Both offer two-factor authentication, biometric recognition, and excess SIPC coverage. The Identity Theft Research Center reported no significant data breaches for either company during 2020. Investors can have confidence in the security standards at either of these brokers.

Our Verdict

IBKR and TDA are well-respected industry powerhouses. Both support a wide selection of trading products and offer customizable trading platforms, but each broker is best suited for specific investor types. With exceptional order execution, low costs, and a professional-level trading platform, IBKR is our top pick for active traders and anyone who wants access to international markets or affordable margin. Due to its easy-to-use and intuitive platforms, comprehensive educational offerings, live events, and in-person help at branch offices, TD Ameritrade is a better option for beginners. 

As a result, choosing one over the other is more about who you are as an investor than any glaring gaps between these two brokers. If you are an active trader, you’ll want IBKR. If you are a casual investor or trader, TDA is a less intimidating choice without giving up much at all in terms of functionality. 

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.

In addition, every broker we surveyed was required to fill out an extensive survey about all aspects of its platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of its platforms at our offices.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.

Adblock test (Why?)