Robinhood vs. TD Ameritrade

When Robinhood launched in 2015, its selling point was commission-free trading, with free stock, ETF, options, and crypto trades. Now that most brokers have dropped commissions, Robinhood has lost that edge. Still, the broker’s low costs, zero account minimums, and overall simplicity remain attractive to new investors. 

Meanwhile, TD Ameritrade (TDA) has been around since 1971 and is backed by decades of reliability and stability. Compared to Robinhood, TDA offers a wider variety of trading products, more educational offerings, and more robust trading software—including the pro-level thinkorswim platform. While Robinhood and TDA have few similarities, we’ll compare the two to help you decide which broker might be a better fit for your trading needs. 

Usability

Robinhood makes it easy to open and fund an account on its app or website, and there’s no dollar minimum to open or maintain an account. With TDA, you can also get started via app or website, but it’s a bit more challenging to pick the appropriate account type due to the broker’s broader range of offerings. Like Robinhood, there’s no minimum to open an account, but with either broker, you need at least $2,000 deposited in your account to use margin. 

Robinhood’s website is sleek and easy to navigate, which may be a function of the broker’s limited offerings. Its mobile app and website are similar enough that it’s easy to bounce between the two interfaces. Still, there’s not much you can do to personalize the experience, which may be frustrating for experienced traders and investors who have come to expect that capability. 

TDA’s website is fresh, well-organized, and easy to navigate, and you’ll find a good variety of educational content, including articles, videos, webinars, and a glossary. While both brokers offer streaming quotes, TDA’s are delayed by default, which means you could miss key market moves. However, you can enable real-time quotes in your account profile. 

Overall, we found Robinhood makes a decent starting place for new traders, especially those who have a small account and want to trade just a share or two at a time—or those interested in a very narrow range of assets. 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 and access to more products. 

Trade Experience

Desktop Trade Experience

Robinhood and TDA offer different trading experiences, but that may not be a surprise considering the two brokers’ target customers. Robinhood’s trading platform has limited functionality compared to many brokers (including TDA). You can’t customize anything, stage orders, or trade directly from the chart. Moreover, while there’s a simple trade ticket for equities, the order entry process for options is complicated. More importantly, Robinhood has been the subject of scrutiny (and litigation) due to recurring platform outages and trade restrictions. 

TDA offers a more robust and reliable trading experience. Casual traders will find everything they need on its web-based trading platform. Experienced, tech-savvy traders and investors will gravitate toward thinkorswim (TOS), TDA’s flagship platform. Thinkorswim is fully customizable, modern-looking, and 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

While Robinhood offers a web-based platform, it’s a mobile-first company. The app targets investors who want a simple trading experience without any bells or whistles. It’s extremely easy to use, but you won’t find many of the same tools that larger brokers offer. Still, you can trade all available asset classes and access streaming real-time quotes and charts. 

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. 

On the App Store, Robinhood has significantly more reviews, but TDA has a slightly better rating. Robinhood has a 4.1-star rating from some 3.8 million reviews, while TDA has 4.5 stars from about 96,000 reviews. Overall, we found that Robinhood’s app is more straightforward and fun to use, while TDA’s app is superior in features and functionality.

Range of Offerings

Robinhood supports a narrow range of asset classes. You can trade stocks (no shorts), ETFs, options, and cryptocurrencies, including Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), Dogecoin (DOGE), Ethereum (ETH), Ethereum Classic (ETC), and Litecoin (LTC). TD Ameritrade offers more products, including mutual funds, bonds, futures, forex, and a Robo-advisory service. Unless you’re looking for crypto, TDA takes the win here.

Order Types

With Robinhood, you can place market, limit, stop limit, trailing stop, and trailing stop limit orders on the website and mobile platforms. It doesn’t support conditional orders on either platform. The default cost basis is first-in-first-out (FIFO), but you can request to change that. 

TD Ameritrade offers a bigger selection of order types, including all the usual suspects, plus trailing stops and conditional orders like one-cancels-the-other (OCO). There are no restrictions on order types on the mobile platform, and you can stage orders for later entry on all platforms. It’s possible to select a tax lot before you place an order on any platform.

Trading Technology

Robinhood doesn’t publish its trading statistics, so it’s hard to rank its payment for order flow (PFOF) numbers. While the industry standard is to report PFOF on a per-share basis, Robinhood uses a per-dollar basis. The company doesn’t disclose its price improvement statistics either. Nevertheless, its target customers tend to trade small quantities, so price improvement may not be a big concern.

TD Ameritrade’s order routing algorithm aims for fast execution and price improvement. It publishes price improvement statistics that show most marketable orders get slightly more than 1½ cents per share ($0.015) in price improvement, on average. TD Ameritrade receives some PFOF but claims its order execution engine doesn’t prioritize it. In the third quarter of 2019, the company received an average of $0.0012 per share in PFOF.

Costs

Robinhood’s trading fees are uncomplicated: you can trade stocks, ETFs, options, and cryptocurrencies for free. At TDA, 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; interactive voice response (IVR) phone system trades are $5. 

Overall, Robinhood may be cheaper if you trade a lot of options. Otherwise, the costs are the same if you mainly trade stocks and ETFs, making this category too close to call.

Research Amenities

Predictably, Robinhood’s research offerings are limited. There are no screeners, investing-related tools, or calculators, and the charting is basic. That being said, market news is available from several reputable outlets, and you can access Morningstar research if you’re a Robinhood Gold client ($5/month subscription). 

TDA offers customizable screeners for stocks, ETFs, options, fixed income, and mutual funds. The advanced charting tools should be more than adequate for most retail investors and traders, and you’ll also find backtesting capabilities. TDA offers real-time streaming news from a large selection of in-house and third-party sources, along with more than 130 hours of live broadcast trader-focused content each day. If you are looking for a versatile lineup of account and research amenities, TDA is by far the better choice.

Portfolio Analysis

Robinhood’s portfolio analysis tools are somewhat limited, but you can view your unrealized gains and losses, total portfolio value, buying power, margin information, dividend history, and tax reports. TDA clients have access to real-time buying power and margin information, internal rate of return, and unrealized and realized gains. Monthly tax reports are accessible directly from the website, and you can combine holdings from outside your account to get an overall view. Overall, TDA has the edge over Robinhood in the portfolio analysis department.  

Education

Robinhood’s educational articles are easy to understand (and even entertaining) but don’t expect any deep dives. It can be hard to find what you’re looking for because the content is posted in chronological order (and not organized by topic). There aren’t any videos or webinars, but the daily Robinhood Snacks newsletter and 15-minute podcast offer useful and lively information. 

TD Ameritrade provides a robust library of educational content, including articles, glossaries, videos, and webinars. It averages 500+ webinars a month and hosts more than 1,500 live events each year. Overall, TDA comes out ahead due to its breadth of topics and multiple delivery formats. 

Customer Service

Robinhood handles its customer service through the app and website, and you can’t call for help since there’s no inbound phone number. Meanwhile, 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). Overall, we found TDA’s customer service offers better flexibility and reliability.

Security

TD Ameritrade’s security is up to industry standards. You can log into the app with biometric (face or fingerprint) recognition, and you’re protected against account losses due to unauthorized or fraudulent activity. TD Ameritrade carries excess Securities Investor Protection Corporation (SIPC) insurance provided by London insurers, giving each client $149.5 million worth of securities protection and $2 million of protection for cash. 

Robinhood’s technical security is up to standards, but it lacks the excess SIPC insurance. However, your cash and securities are still protected by standard SIPC insurance for up to $500,000 (including $250,000 for cash claims). Through Oct. 2021, neither broker had any significant data breaches reported by the Identity Theft Research Center.

While not a security issue, it’s worth noting that Robinhood derives most (81% as of the first quarter of 2021) of its revenue from payment for order flow. The SEC recently announced it is considering a full ban on payment for order flow practices because it creates “an inherent conflict of interest,” according to SEC Chairman Gary Gensler. Bans are already in effect in Australia, Canada, and the U.K. Additionally, Robinhood faces dozens of class-action lawsuits over trading halts and platform crashes that reportedly led to financial losses for millions of Robinhood users.

Our Verdict

With a simple app and website, Robinhood offers a no-frills trading experience. If you’re new to investing and trading with a small balance, Robinhood could be a good place to gain experience before switching to a more versatile broker. Of course, if you are concerned about Robinhood’s outages and trade restrictions—or its payment for order flow practices—other zero-fee brokers may provide a more predictable and reliable trading experience. Overall, we haven’t been fans of Robinhood’s efforts to gamify investing, and some of those concerns come out in these comparisons. 

TD Ameritrade may not be as “fun” as Robinhood, but casual traders and investors will appreciate its intuitive trading platforms, comprehensive educational offerings, and robust resources. The thinkorswim platform also makes TD Ameritrade a good option for more experienced and frequent users interested in taking an active approach to their investments. Overall, TD Ameritrade is the better choice whether you’re a beginner who wants a broader range of trading products or an active trader looking for a more robust trading experience.