Are you looking for a good online broker for managing your investments? TradeKing and TD Ameritrade are two popular options but are very different brokerage firms in terms of price per trade and features. Take a look at this detailed comparison to see which areas each company excels in and decide which is a better brokerage for you.
- Review of: TradeKing vs. Ameritrade
- Reviewed by: Janet Berry-Johnson, CPA (Forbes.com Contributor)
- Published on: November 23, 2016
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Last modified: November 23
- TD Ameritrade promotional offer: Join TD Ameritrade. Trade free for 60 days + Get up to $600.
- Trade King promotional offer: Get $100 in Free Trade Commissions at TradeKing. No Minimum Required!
Price per stock trade
First, let’s look at one of the most important questions to any time you invest: what are the costs?
TradeKing charges $4.95 per online trade for stock trades. For option trades, they charge an additional $0.65 per contract. If you want the extra service of a broker-assisted trade, TradeKing charges a fee of $20 plus the regular commission.
Ameritrade charges $9.99 per online trade for stock trades. For option trades, they assess an additional $0.75 per contract. If you use their Internet Voice Response Phone System, the fee jumps to $34.99 per trade. Broker-assisted trades are $44.99.
That’s an enormous difference of $5.04 per online trade between TradeKing and Ameritrade, and probably enough to persuade many investors to open a TradeKing account when choosing between the two. Does Ameritrade make up for this price difference in other ways?
Account Requirements
Ameritrade does not charge any account inactivity fees. TradeKing, on the other hand, charges an account inactivity fee of $50 per year if you had zero trades in the previous year and less than $2,500 in total household assets with the firm.
Both brokerages allow accounts to be set up with no initial deposit. If you plan on opening an online brokerage account and not making trades, you won’t get hit with inactivity fees with an Ameritrade account, but chances are, you’re opening up an online account with the intention of buying and selling securities. You could execute ten online trades with TradeKing and still pay less in fees than the inactivity fee from Ameritrade. TradeKing wins this category.
Account options
Both Ameritrade and TradeKing offer taxable individual and joint accounts, Traditional and Roth IRAs, and Rollover IRA accounts. Ameritrade also offers 529 Plans, Coverdell educational savings accounts, and UGMA/UTMA accounts for minors.
Ameritrade allows investors to trade stocks, options, mutual funds, ETFs, futures, forex, and bonds and CDs in their standard accounts. Investment choices may be limited in less common account types such as Trust accounts, 529 plans, and pension plans.
TradeKing offers a wide variety of investment possibilities including stocks, mutual funds, ETFs, fixed income securities, options, and penny stocks. They add a $0.01 surcharge per share of any stock under $2, and they require a minimum investment of $100 per order in penny stocks.
Forex (Foreign Exchange)
In a Forex trade, the investor buys one currency while simultaneously selling another. Currencies trade in pairs, such as USD/EUR or USD/CNY. There is no centralized exchange for forex, as there is for stocks and futures. Thus, all transactions happen via phone or electronic network.
Both TradeKing and Ameritrade offer forex trading. TradeKing lets investors practice forex trading by providing a $50,000 virtual practice account to play with before you start using real money. TradeKing does not charge a fee to trade in the virtual account, and you can choose from over 50 pairs of currency.
Ameritrade lets investors test their skills by simulating trading stocks, options, futures, and forex via their thinkOnDemand platform.
Fund & ETF Investing
Ameritrade offers more than 100 commission-free exchange traded funds (ETFs), including 34 equity funds, 33 bond funds, 31 international funds and two commodity funds. However, if you purchase one and sell it within 30 days, you’ll be subject to a $19.99 short-term trading fee. They also offer more than 13,400 mutual funds with more than 5,500 of them being no-load funds.
TradeKing does not offer any commission-free ETFs. They do offer more than 12,000 mutual funds with just over 4,500 of them being no-load.
Customers of both brokerages pay no transaction fees for funds with loads. TradeKing allows buying and selling of no-load mutual funds for $9.94 per trade. Ameritrade offers buying and selling of no-load mutual funds for a whopping $49.99 per trade.
Margin Accounts
Both TradeKing and Ameritrade offer margin accounts. Account minimums for margin accounts are governed by federal regulation. You must maintain a minimum of $2,000 for a margin account.
Banking
TradeKing does not offer checking or savings accounts. Ameritrade’s Cash Management account offers free ATM withdrawals, no monthly maintenance fees, free online bill pay and free check writing.
If you’re looking for the convenience of holding all of your investment accounts and bank accounts with one bank, Ameritrade wins this category.
Platform
Both TradeKing and Ameritrade offer trades via mobile app and desktop. Ameritrade offers two platforms. Thinkorswim is geared toward advanced investors and provides tools with nearly endless research possibilities. Trade Architect is geared toward a more casual or beginner investor. However, both Thinkorswim and Trade Architect are available to all Ameritrade investors. Many online brokerages offer their premium-tier platforms only to larger clients, but Ameritrade does not require a certain trade or account value threshold to take advantage of the advanced platform.
TradeKing’s browser-based platform is called TradeKing Live. It provides quick trading capabilities, real-time streaming quotes and data, and access to all of TradeKing’s tools.Those tools include a range of calculators and charting capabilities.
Customer Service
Ameritrade customers can contact an experienced, licensed representative 24/7 via email or phone. Ameritrade also has more than 100 branches in 34 states.
TradeKing customers can reach customer service via Live Chat and telephone from 8 am to 6 pm, ET, Monday through Friday. They respond to email within two hours during business hours and 24 hours on the weekend.
The bottom line
If you are looking to open a basic online brokerage account, TradeKing may be the perfect fit. Their interface is easy to use, and the fees are among the lowest of any online brokerage.
TD Ameritrade charges more per trade, but its advanced trading platform and research offerings may make it worth the cost difference for experienced investors who like to play with analytical tools and research options.