Vanguard and TD Ameritrade (TDA) are among the largest brokerage firms in the U.S.—but the similarities stop there. Vanguard offers an impressive lineup of low-cost mutual funds and exchange-traded funds (ETFs) aimed at buy-and-hold investors and retirement savers. Meanwhile, TD Ameritrade offers three trading platforms—a web platform, the professional-level thinkorswim, and a mobile app—designed for active traders. While Vanguard and TD Ameritrade have a few similarities, we’ll compare the two to help you determine which broker might be a better fit for your investing needs.

Usability

You can open a Vanguard account online, but there is a several-day wait before you can log in. We found it’s easier to open and fund an account at TDA. You can do so either through its website or mobile app, although it can be challenging to pick the right account type due to the range of offerings. With either broker, you need to sign additional documents—and wait a bit longer—if you want to trade options or access margin.

Vanguard and TDA offer a good variety of educational content, including articles, videos, webinars, and a glossary. Vanguard’s website has (finally) been updated and is now more user-friendly and modern-looking. However, there’s still work to be done to make the website less complicated, and you can’t get very far unless you log into your account. TDA’s website is fresh, well-organized, and easy to navigate.

Overall, we found Vanguard works well for long-term investors—especially those who want access to professional advice and some of the lowest-cost funds in the industry. At the same time, TDA is a better fit for investors and traders of all experience levels who want a more robust and customizable trading experience.

Trade Experience

Desktop Experience

Vanguard and TDA offer very different trading experiences—but that’s to be expected considering the brokers’ target customers. Vanguard’s platform is geared toward buy-and-hold investors, not active traders. While the platform gets the job done (i.e., you can enter orders), there aren’t any bells and whistles. The order entry process is clunky and not particularly intuitive, and there’s no real-time data until you open a trade ticket. Overall, the trading platform is adequate for passive investors, but it falls predictably short for traders and investors who want a responsive and customizable experience.

Casual traders will find everything they need on TDA’s web-based trading platform. More experienced and tech-savvy investors and traders will gravitate toward thinkorswim (TOS), TDA’s flagship platform. Thinkorswim is a fully customizable, modern-looking platform that offers a full suite of analysis tools. There’s also a trading simulator that lets you create and test studies using the thinkScript programming language. Overall, TDA has a solid lead in terms of features and functionality.

Mobile Trade Experience

Vanguard’s mobile app is a bit outdated and light in terms of features. There is no charting, and the quotes are again delayed until you open an order ticket. Still, as a buy-and-hold investor, you can monitor your positions, analyze your portfolio, read the news, and place basic orders—albeit for limited asset classes.

TDA supports two mobile apps: the beginner-friendly TD Ameritrade Mobile App and the active trader focused thinkorswim Mobile. Both are robust and offer a great deal of functionality, including charting and watchlists. Streaming real-time data is included, and you can trade the same asset classes on mobile as on the other platforms.

According to user ratings on the App Store, both brokers’ apps are well-received. Vanguard has 4.7 stars from about 167,000 reviews. 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 that TDA offers a superior mobile trading experience in terms of features and functionality.

Range of Offerings

Vanguard and TDA offer equities, bonds, options, OTCBB, robo-advisory services, and thousands of no-load, no-fee mutual funds. TDA also supports trading in futures, futures options, Bitcoin futures, and forex, giving it the wider range of offerings.

Order Types

Predictably, Vanguard supports only the order types that buy-and-hold investors traditionally use, including market, limit, and stop-limit orders. You can select specific tax lots (including partial shares within a lot) to sell, but you can’t stage orders for later entry. TDA offers a larger selection of order types, including all the usual suspects, plus trailing stops, and conditional orders like OCOs. There are no restrictions on order types on the mobile platform, and you can stage orders for later entry across all platforms.

Trading Technology

Vanguard does not use smart order routing technology, and customers can’t route their orders. Still, the broker reports an average net price improvement of $0.0159 per share for eligible marketable orders. We did not find any ready details about Vanguard’s execution speed, but keep in mind its target customer is playing the long game (and won’t be concerned about nanoseconds). Although its approach to routing is basic compared to many other brokers, it scores points for not accepting payment for order flow.

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. Unlike Vanguard, TDA does accept payment for order flow: $0.0012 per equity share and $0.55 per options contract.

While Vanguard comes out ahead in terms of payment for order flow (by not accepting it), TDA is the overall winner in trading technology because of its smart order routing technology.

Costs

Vanguard and TDA charge $0 commissions for online stock, ETF, and options trades for U.S.-based customers. TDA has a $0.65 per contract option fee; it’s $1 at Vanguard. For OTCBB/penny stock trades, Vanguard charges $0, and you’ll pay a flat rate of $6.95 at TDA. Mutual funds that fall outside the no-transaction-fee family cost between $0 and $20 at Vanguard (depending on your account balance) and a relatively steep $49.99 with TDA. Finally, broker-assisted trades cost $25 at TDA and between $0 and $25 at Vanguard, depending on your account balance.

Overall, Vanguard is considerably cheaper if mutual funds or OTCBB/penny stocks are your focus. Alternatively, you might save money at TDA if you trade a lot of options. The costs are the same if you are mainly looking at stocks and ETFs, making this category too close to call.

Account and Research Amenities

Vanguard and TD Ameritrade offer screeners for stocks, ETFs, fixed income, and mutual funds, but only TDA has one for options. TDA’s screeners are also considerably more robust and customizable. Both brokers also offer various news sources—but here again, TDA comes out ahead in terms of offerings.

Vanguard’s charting capabilities are limited, and there’s no technical analysis. Conversely, TDA offers advanced charting tools that should be more than adequate for most retail investors and traders. Overall, TDA offers more versatile account and research amenities. Still, Vanguard scores points for having a dedicated area on its website for socially responsible investing investing—something TDA lacks.

Portfolio Analysis

Vanguard and TDA both provide access to buying power and margin information, plus unrealized and realized gains. You can access tax reports (capital gains), see your internal rate of return (IRR), and view aggregate holdings from outside your account. Overall, the portfolio analysis offerings at the two brokers are too similar to pick a clear winner.

Education

The focus of Vanguard’s educational content is to help you set and reach your financial goals. Much of the content is in the form of articles. That said, you’ll also find commentary and research papers, videos, and webcasts on investment products, retirement, industry news, financial planning, and the economy.

TDA offers articles, videos, and webinars, and it hosts more than 1,500 live events each year. A range of immersive courses covers basic investing and trading ideas, plus a few advanced topics. Overall, TDA comes out ahead due to its breadth of topics and beginner-friendly content.

Customer Service

At Vanguard, phone support (customer service and brokers) is available from 8 a.m. to 8 p.m. (Eastern) Monday through Friday. Live chat isn’t supported, but you can send a secure message via the website. Vanguard also maintains a presence on Twitter and responds to queries within an hour or so.

TDA offers 24/7 phone support and chatbots on Twitter, Facebook Messenger, Apple Business Chat, and WeChat (in Asia). Live chat is supported on its app, and a virtual client service agent, Ask Ted, provides automated support online. Overall, TDA’s customer service is more flexible with higher availability. You can count on reliable help from either broker, but TDA has a clear edge when it comes to customer service.

Security

Vanguard and TDA’s security is up to industry standards. You can log into either broker’s app with biometric (face or fingerprint) recognition, and both brokers protect against account losses due to unauthorized or fraudulent activity.

Vanguard’s excess Securities Investor Protection Corporation (SIPC) insurance provides each client with $49.5 million for securities and a cash limit of $1.9 million per customer. TDA’s customers are covered with $149.5 million worth of protection for securities and $2 million of protection for cash.

Through Sept. 2021, neither brokerage had any significant data breaches reported by the Identity Theft Research Center. Overall, investors can be confident in the security standards of either broker.

Our Verdict

In our 2021 Best Online Brokers reviews, TD Ameritrade earned higher scores than Vanguard in every category we ranked. To be fair, it isn’t easy to compare two brokers that have such distinct business models and target customers. Vanguard is a niche player built exclusively with buy and hold investors in mind, similar to how some brokerages have zeroed in on options traders. TD Ameritrade is a generalist aiming to serve new investors all the way to advanced traders on its thinkorswim platform. 

Overall, however, buy-and-hold investors who value simplicity and want access to some of the best (and lowest cost) funds in the business may still prefer Vanguard as the limitations of the platform won’t take away from their main purpose of creating a low-cost, diversified portfolio. That said, TD Ameritrade can do all things Vanguard can do—and much more. Overall, TD Ameritrade is the better choice whether you’re a beginner who wants a broad range of educational content or an active trader or investor looking for a more robust trading experience.