So you’ve decided to start investing your hard earned money. There’s no better time to do it – the week of October 4th, Schwab, TD Ameritrade, E*Trade and other brokerages eliminated commissions on stocks and ETFs. That means zero cost when you buy and sell stocks. Woohoo. Now’s a great time to open an account or transfer to a new brokerage (I did, and I’m loving it so far). While I can recommend both, I recently transferred from TD Ameritrade to Charles Schwab, and I can explain the pros and cons of both brokerages.
Edit: TD Ameritrade and Charles Schwab announced a merger in late 2019. For now, they still have separate apps and websites, and the information in this post is still relevant. I will continue to update the post as the companies announce new updates.
Charles Schwab Review
This is the brokerage I just transferred to and I’m so excited for the change. I would highly recommend it for people who like to keep their finances all in the same place. The brokerage account is great for the average investor – there’s $0 inactivity fees, $0 account minimum, and an easy-to-use app. Charles Schwab is a great platform for beginner and intermediate investors – if you consider yourself an expert or a professional trader, consider TD Ameritrade instead.
But while Charles Schwab’s brokerage account is fine and dandy, a lot of other brokerages offer the same benefits. I chose to transfer to Charles Schwab for the combined glorious value of its brokerage account and its high yield checking account, which I’m so excited about. If you link a Schwab Bank High Yield Investor Checking account to your brokerage account, it has no monthly service fees and reimburses all your ATM fees, worldwide. Let me reiterate:
All. Your. ATM Fees. Worldwide.
Some other banks provide this service too, but with lots of obstacles and conditions you have to jump through to qualify, like a direct transfer or a ten debit purchase minimum each month (which sucks if you want to rack up those sweet credit card rewards). A few months ago, I traveled in Japan and Taiwan with friends, and it seemed like every mom-and-pop-shop or local business only took cold hard cash. My friend had a Charles Schwab account and was able to withdraw money from any ATM at a fair exchange rate AND have her ATM fees reimbursed by Charles Schwab, and I haven’t been able to get over how helpful and convenient the account is.
Did I mention that it also has a 0.2% APY? Compare that to the APY you get if you open a checking account with other well-known banks:
I know I’m heaping praise onto Charles Schwab, but none of my content is sponsored. It just makes sense to keep all of your funds in one place, get a higher return on your cash than the mere pennies you get from traditional banks, and be able to use any ATM in the world without being charged exorbitant fees. It’s the smart thing to do.
Promotion – Up to $500 Bonus For A New Account
If you’re ready to open an account with them or transfer over from another brokerage, you can get started here. Using this link gives you a bonus up to $500, and I do not benefit or profit from it. I simply like them.
TD Ameritrade Review
I’ve used TD Ameritrade for four years, and it served me well. The app is easy to use and it’s proprietary award-winning tool thinkorswim can help an experienced investor choose which stocks to invest in. You can practice trading with a practice account funded with $100,000 of fake, virtual money. The color scheme is easy on the eyes too, so it hurt less as I stared at it for countless hours puzzling through how to use it. It’s pretty fun to try once you get started. There’s three themes to choose from: Dark, Bright, and Old-School.
If you want, TD Ameritrade also has a robo-advisor that will manage your money for you and take 0.3% of assets managed each year. But be warned! The fees are determined by account size, not profitability, and there is a $5,000 account minimum to use this feature. For smaller accounts, it makes more sense to manage the money yourself to get higher returns.
Aside from that, TD Ameritrade has all the usual benefits – $0 account minimum, $0 maintenance fee, no commission fees on stocks or ETFs, and a wide variety of both domestic and international stocks to choose from. It’s research platform is amazing and provided free of charge – there’s a lot of material for a potential investor to do some self-paced learning.
If you want to open a TD Ameritrade account, you can open one here. Again, I do not receive any compensation from these links.
Good luck, and happy investing!