15 Differences Between Robinhood and TD Ameritrade

What are the differences between Robinhood and TD Ameritrade? When it comes to choosing between using Robinhood and TD Ameritrade while dealing with your crypto, you must know that one is an industry upstart and the other is a full-service broker that you would deal with.

Therefore, to make sure that you choose the right platform to trade your crypto coins in the end, you must know the differences between these two thoroughly.

This article will help you in that aspect so that you are absolutely confident when you place your orders.

When you want to differentiate between Robinhood and TD Ameritrade you must do so on the basis of a few specific parameters such as usability or user experience, the products offered by each of these platforms, the quality of trade executed, trading costs and transaction fees, customer service, the mobile experience, and security.

This is because both these platforms offer much more than crypto trading. Check out Differences Between Robinhood and Kraken.

One of the biggest differences between Robinhood and TD Ameritrade is in their appeal. Ideally, TD Ameritrade appeals to the more advanced and active traders.

It offers a high quality platform for trading and a wider investment selection along with a robust library that helps in research with valuable data.

However, Robinhood, on the other hand, seems to be more appealing to the beginners in this field who prefer using a low cost and more streamlined trading platform.

15 Differences Between Robinhood and TD Ameritrade

Differences Between Robinhood and TD Ameritrade

It can be really daunting to choose between Robinhood and TD Ameritrade if you are just starting your investment journey in crypto or in stocks.

You will need to know the differences between them as well as the pros and cons of each in order to find out which among the two suits you and your needs the best.

Here are a few basic points in the face-off between TD Ameritrade and Robinhood along with the features that may influence your choice.

1. The Basics

Robinhood started its journey in 2013 and therefore it can be considered as comparatively new in the online brokerage space. Having a simple and affordable fee structure, Robinhood has in fact revolutionized the crypto industry quite notably within a comparatively short period of its existence.

It also supports commission-free trades in stocks, options, and ETFs as well. Though there are several online brokerages you will find today that allow commission-free trading, at that time such offers from Robinhood were pretty rare.

Today, this particular platform is attractive to the new investors and traders for its zero account minimum requirements and low costs.

On the other hand, TD Ameritrade was founded in 1975 and therefore has a longer history than Robinhood to prove its mettle.

It is actually the product of mergers and acquisitions of previous rivals such as National Discount Brokers, Mydiscountbroker.com, TD Waterhouse, Datek Online Holdings, Scottrade, and the thinkorswim platform.

TD Ameritrade has more than 11 million client accounts which are in excess of $1 trillion in assets making it a giant in the industry. As for cryptocurrencies, this particular platform is known for its support of Bitcoin Futures.

2. Scoring

According to some reports of Best Online Brokers reviews conducted in 2020, Robinhood scored higher than TD Ameritrade in specific categories such as Best for Low Costs and Best for Options categories.

In comparison, TD Ameritrade scored higher than Robinhood in every other aspect such as Best for Beginners, Best for Day Trading, Best Overall, and Best for International Trading, as well as in other categories such as Best for IRA Accounts, Best Stock Trading Apps, and Best for ETFs.

3. Good For

Most people believe that Robinhood, when considered overall, is one of the good places for new investors to start, especially if they do not have a large amount to invest at a time.

In comparison, TD Ameritrade is much more versatile than Robinhood and is a good platform for crypto and stock investors of all levels. This is also one of the most suitable platforms for those traders and investors who are self-directed and want to use a good set of tools to customize their trading and investment strategies.

4. Usability

If you are looking for a simple and user-friendly website to navigate, Robinhood should be your choice. It will take just a couple of minutes for you to open a new account and fund it to get started.

However, it will be overtly simple in functionality whether you use the website or the mobile app, both of which look pretty similar in terms of functionality and appearance.

This makes it very easy for even the novice to switch between the two interfaces. However, you must keep in mind at this point that you will have very little to do if you wish to personalize or customize the user experience.

On the other hand, the TD Ameritrade platform is not as easy as Robinhood to use. This is because it is actually an amalgamation of four different platforms that it supports.

These are the thinkorswim advanced platform to support the active traders and investors, a web version, and two mobile apps namely thinkorswim Mobile and TD Ameritrade Mobile Trader.

It is also very easy to get started on this platform where you can open and fund a new account online or through the mobile app. It will be much easier to open a new account of your choice and according to your needs when you choose one from the list of the ‘Most Common Accounts’ or you can select the right type of account by using the handy and more useful ‘Find an Account’ feature.

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5. Desktop Experience

Both these platforms are designed to offer the best trading experience to their users. In terms of the desktop experience, as said earlier, the platform of Robinhood is much easier to use but with limited functionality.

You will not be able to trade directly or place orders from the chart since there are not many customization options. The trading options are a bit more complicated though the trade ticket for stocks is quite intuitive.

Also, according to a few research reports it was found that the price data of Robinhood typically lags behind by 3 to 10 seconds in comparison to TD Ameritrade as well as other trading platforms. This, however, may not be a very big issue for those buy-and-hold investors but could be for the other users.

On the other hand, as far as the web platform of TD Ameritrade is concerned, you will be allowed to customize the size, quantity and type of your orders. It also comes with a unique tax-lot methodology.

Add to that, the thinkorswim interface is quite easy to navigate and is also more intuitive. You will also be able to use the proprietary programming language of this platform, thinkScript, which will allow you to build custom analysis tools.

Whether you want to place orders, send several orders, stage orders, or send and trade directly from a chart, this is a good platform to use.

All its platforms, including the mobile one will stream real-time quotes as a standard. Apart from that, you will also get to use the free Level II quotes which are extremely useful for those traders who are non-professionals.

6. Mobile Experience

When it comes to the mobile experience, Robinhood will offer you with only one mobile app as compared to two of TD Ameritrade. However, this app streams real-time quotes.

This mobile app is quite well designed to ensure that it is easy for the beginners to navigate allowing you to trade similar asset classes on both the standard as well as on the mobile platform.

On the other hand, the mobile apps of TD Ameritrade are thinkstorm mobile and TD Ameritrade Mobile App as you already know. Out of this the latter is more beginner-friendly while thinkstrom mobile is specially designed to help the active traders since it offers streaming real-time quotes as well.

Both these mobile apps are however much better than the mobile app of Robinhood in terms of functionality and customization, especially when you use these apps to trade the same asset class as you do on the standard platform.

7. Range of Offerings

When you consider the support provided by the two platforms, Robinhood typically lags behind TD Ameritrade in its range. Apart from cryptocurrencies of a few specific types, this platform supports trading ETFs, options and stocks with no shorts.

As for the cryptocurrency support, this platform only allows trading Bitcoin or BTC, Bitcoin Cash or BCH, Bitcoin SV or BSV, Ethereum or ETH, Ethereum Classic or ETC, Dogecoin or DOGE, and Litecoin or LTC apart from ten other smaller crypto coins.

In contrast, TD Ameritrade offers access to cryptocurrency to its users but it is limited to Bitcoin futures only. As for all other asset classes, it supports almost all types that you can expect from any large broker and includes both long and short stocks, ETFs, bonds, mutual funds, futures, forex, and options on futures.

8. Order Types

As for the order types, Robinhood typically does not support provisional orders on any of its platforms, mobile or desktop. However, both these platforms allow you to place market orders, limit orders, stop limit orders, trailing stop orders, and trailing stop limit orders.

For all of these orders it usually follows the FIFO or First In First Out method as its default cost basis but if you want to can request for a change.

However, in comparison, the TD Ameritrade platform will offer you a much bigger selection when it comes to order types. Not only does it include all of the usual suspects available but it also supports trailing stops as well as conditional orders such as the OCO or One Cancels the Other order.

However, as for the mobile platform, there is no limit on placing the order types. Moreover, the platform also allows you to stage orders for later entry on both the platform variants. The most unique thing is that you can select a tax lot before placing an order on any platform.

9. Technology

There is also a significant difference in the trading technologies used by the two platforms, Robinhood and TD Ameritrade. As for Robinhood, it normally does not publish any trading statistics.

This makes it quite hard for the traders to rank the PFOF or Payment For Order Flow numbers. It normally uses a per-dollar basis as opposed to the industry standard of reporting PFOF on an individual share basis.

The price improvement statistics are also not disclosed by Robinhood. However, the primary target of this platform being the users who want to trade in small quantities, the lack of price improvement is therefore not a big concern.

In contrast, TD Ameritrade is a platform that uses an order routing algorithm that ensures faster execution of trades and price improvements. It also publishes the statistics for price improvements which enables the traders to see the orders that are more marketable and productive.

On an average, the price movements are slightly over 1½ cents per share as a result. Moreover, the platform receives a few PFOF but it claims that these are not prioritized by the order execution engine.

10. Costs

The most significant point of differentiation between these two platforms is the trading fees. As for Robinhood, these are quite straightforward.

Ideally, you can make free trades whether it is for stocks, ETFs, options, or cryptocurrencies. However, this platform does not support mutual funds or any broker-assisted trades.

On the other hand, as for TD Ameritrade, it also allows trading equity, options and ETFs online for zero commissions for the customers based in the United States but there is an option fee of $0.65 for each contract.

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Apart from that, the platform also charges $44.99 for trades assisted by brokers and $49.99 for those mutual funds that exclude the list of no-fee options.

11. Research Facilities

The research facilities of the Robinhood platform are quite limited. You will not have any tools related to making investments or screeners.

You will also not be provided with any calculator and the charts offered by this platform are also pretty basic. However, if you are a Gold client of Robinhood that needs a monthly subscription of 5 dollars, you can get easy access to Morningstar research.

TD Ameritrade, on the other hand, will offer you a number of useful research amenities. This is over and above the robust stock, mutual fund, fixed-income, ETF, and options screeners.

It also includes a lot of tools and calculators as well as news offerings and idea generators that are extremely useful for professional research.

In addition to that, the thinkorswim platform, in particular, also offers a lot of different drawing tools, customizable charting, and a host of technical studies and indicators.

12. Portfolio Analysis

You may find analyzing your portfolio while using Robinhood a bit difficult in comparison to TD Ameritrade due to the slightly limited offer of the analysis tools.

However, in spite of these limited tools, these are good enough to see your unrealized profits and losses, your buying power, the total value of your portfolio, margin information, the history of dividends, as well as the tax reports.

On the other hand, as for the TD Ameritrade platform, it offers the users to have access to margin information, real-time data and buying power, realized as well as unrealized profits, and the internal rate of return.

Moreover, when you use its website you will be able to access the monthly tax reports directly from it. That is not all. You can even have an overall view of all your holdings by combining them from outside to your account.

13. Education

The most significant reason for which Robinhood is considered to be one of the best platforms for the beginners in the crypto field is its educational articles offered that are all very easy to understand.

All the contents are posted in chronological order which may be a bit difficult for you to find exactly what you are looking for quickly because there is no search box in particular.

Though Robinhood does not offer any webinars or videos, the daily Robinhood Snacks 3-minute podcasts published daily are good to gain a lot of knowledge about crypto through the interesting commentary.

TD Ameritrade, on the other hand, provides a wide and varied library of educational content that includes articles on different topics, glossaries, and videos. The platform also offers a variety of webinars every month that exceeds 500 in number along with more than 1,500 live events every year.

14. Customer Service

When it comes to the customer service of these two platforms, you will not be able to call a dedicated customer service cell if you use Robinhood for your crypto trading and investing.

This is because the platform does not have any particular inbound telephone number. It usually routes the users needing help through its website and app but you can narrow the issue down when you desperately need some help by using the online menu and requesting a callback.

On the other hand, the TD Ameritrade platform offers adequate customer support to its clients around the clock over the phone. The platform also allows the users to use Facebook Messenger, chatbots on Twitter, and Apple Business Chat, and if you reside in Asia you can use WeChat.

If you use the mobile version of the platform you can also use the Live Chat support as well as Ask Tend which is a virtual client service agent. You will therefore have adequate and automated support from the platform online.

15. Technical Security

When it comes to technical security, it is set up just according to the industry standards for TD Ameritrade. Users can log into the app safely through biometric recognition, either face or fingerprint.

Your account will also be protected well from losses incurred due to fraudulent activities or unauthorized use. The platform of TD Ameritrade also comes with an insurance cover from SIPC or Securities Investor Protection Corporation.

This London-based insurer offers protection worth $149.5 million to each client for securities and an added protection worth $2 million for cash.

On the other hand, Robinhood also comes with a technical security setup that is at par with the standards of the industry but it lacks any protection cover from the SIPC as for crypto.

On the other hand, in the case of cash and securities, the SIPC insurance coverage offered is up to $500,000, out of which half is for the cash claims.

Which is Better to Use – Robinhood or TD Ameritrade?

When you compare TD Ameritrade and Robinhood to choose one platform from the two, you should do so on the basis of the type of investing you want to do and your needs.

TD Ameritrade is a platform for the more experienced traders for stocks and crypto that has been in this field for decades in comparison to the young incumbent Robinhood.

However, that does not mean that TD Ameritrade is a giant from the past since it has done enough to bring in some developments that have helped it to cope up with the young and hungry platforms like Robinhood.

It has a long term trajectory and probably a better one since it comes with a more widespread system and offers you a lot more opportunities to grow with its powerful options.

You can go with TD Ameritrade if you wish to open any other type of account apart from a taxable account.

This is because Robinhood does not offer its users to open such types of accounts.

Also, TD Ameritrade is a better option than Robinhood because it offers a wide range of mutual funds and American Depositary Receipts or ADRs apart from trading Bitcoin futures.

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The options offered by this electronic trading platform include and are not limited to common and preferred stocks, exchange-traded funds, forex, options, futures contracts and cryptocurrency, margin lending, fixed income investments, and mutual funds.

Robinhood, on the other hand, is typically a popular American financial services company. However, it will offer only a few basic types of ADRs and no mutual funds.

In addition to that, it also has a useful app that allows stock trading, ETFs, options, and, of course, cryptocurrency.

Apart from that, they also specialize in margin accounts and individual taxable accounts.

Though Robinhood is also known to provide a great experience for the mobile users, in comparison, with TD Ameritrade you can expect to have a much better user experience with the diverse range of trading tools offered by its mobile app and website.

Also, Robinhood will not offer you with a lot of additional or research features but you will surely get the cost benefits while trading over this platform for stocks, options and crypto, making it a favored one for the small time and new investors.

In addition to that, the simple UX of Robinhood may be appealing to you so much that you want to be a part of it but the primary objective of your choice should be whether or not you will be able to make enough money on it.

This is a good platform to make micro investments whether it is for stocks or for crypto and know how each of these markets works to gain more experience.

As a matter of fact, if you go with Robinhood, it will not offer too many bells and whistles if you are looking for a simple website and app to trade your crypto assets.

However, this will be your ideal choice if you want to start small and are new to investing in cryptocurrencies.

This will be a good move to gain enough practical knowledge and confidence before you switch over to a more versatile broker.

However, for the beginners in crypto space, TD Ameritrade is also a good platform because it is one of the most intuitive platforms that offer live events, and a more comprehensive educational offering especially for Bitcoin futures.

However, it is also one of the top choices for the more experienced traders and investors who want to be more active in their approach, thanks to its thinkorswim platform.

Both Robinhood and TD Ameritrade produce interest income. The amount of this interest is generated by the difference between what the platforms earn on the balances of the customer and the amount that you are paid on your idle cash.

However, with TD Ameritrade, you are allowed to move your cash into a money market fund if you want to get a higher rate of interest.

At this point you must also remember that none of these platforms allow their customers to gain any return generated from the stock loan programs.

If you are worried about the security aspect of the two platforms, be informed that neither of the two has had any significant incidents of data breaches and there are no such major issues recorded in the report of the Identity Theft Research Center.

Therefore, it can be said that both these platforms are quite reliable to use for your trading and investment needs.

Ideally, Robinhood was designed for the mobile generation but TD Ameritrade in comparison is designed to become the leading online brokerage mainly in stock and a little bit in cryptocurrencies.

You can practically do anything while using TD Ameritrade, thanks to its advanced mobile app and a wide range of tools.

Now the question is, are all these tools really useful for crypto trading on this platform?

Well, as said earlier, it entirely depends on the type of trading you are into.

However, it can be surely and assertively said that, in comparison to Robinhood, any investor will save and profit more while using TD Ameritrade with its better intuitive research AI tools.

There is one thing that you should be concerned about when you use Robinhood.

In spite of being a good platform for the inexperienced traders, Robinhood may steer the investors to more high-risk choices than they would have done otherwise.

Also, this feature-light platform will turn out to be extremely limiting for the more thorough and experienced investors almost immediately.

That is why the full range of customizable technical analysis tools of TD Ameritrade is so useful to deal with a much broader asset class which is customary for the more sophisticated investors.

In the end, it can be said that both Robinhood and TD Ameritrade are good for basic and free stock trading, and extras for a fee, which the investors and traders will be slightly more benefited with if they use TD Ameritrade typically for its advanced resources.

In simple words, TD Ameritrade is more suitable for the investors and Robinhood is good for the small-time traders who do not need a lot of research tools and want to mast on-the-go trades quickly.

As for the investors, they might spend more while using Robinhood if they do not research elsewhere.

Conclusion

In order to be comfortable with your trading and investment endeavors on platforms like Robinhood and TD Ameritrade, you will first need to know the differences between the two. This article must have surely helped you a lot in it.