TD Ameritrade vs. Webull: Which Broker Is Right for You? | The Motley Fool (2024)

When it comes to commissions and fees, TD Ameritrade and Webull both offer zero-commission online stock trades, just like most of the brokerage industry. Neither charges an account maintenance fee, and the fee to transfer a stock account to another broker is $75 at both. But that's where the similarities end.

Both brokers offer options trading, but Webull is one of the only places where you can trade options with no commissions. On the other hand, TD Ameritrade charges a $0.65 fee per options contract traded, which is more in line with what many brokers charge.

READ MORE: Best Options Trading Platforms

TD Ameritrade currently doesn't offer cryptocurrency trading, while Webull does. And while Webull doesn't charge a "fee," the company makes it clear that there is a 1% markup priced into each order.

On the other hand, Webull doesn't allow mutual fund investing. And while TD Ameritrade's standard mutual fund commission of $49.95 is a bit on the high side, there are thousands of mutual funds available through the platform with no transaction fee.

As alluded to in the previous section, both TD Ameritrade and Webull offer stocks, ETFs, and options on their platforms, but beyond that there are very different offerings. Let's start with what TD Ameritrade offers that Webull doesn't.

TD Ameritrade offers:

• Mutual funds
• Bonds
• Futures trading
• CDs

You can even trade foreign currencies through the broker's highly rated thinkorswim trading platform.

LEARN MORE: Best Online Stock Brokers for Beginners

On the other hand, Webull offers a few investment products that aren't available on TD Ameritrade. For stock investors, Webull allows fractional share trading, which can be a big perk to newer investors. However, it's worth noting that TD Ameritrade has been officially acquired by Schwab, which does offer fractional share trading, so at some point in the not-too-distant future, it likely should be available.

Webull also offers cryptocurrency trading, and with a greater variety than most of its peers. There are currently 25 digital currencies available to trade on Webull's platform, and the company plans to add more over time.

Aside from having its own branded credit card, TD Ameritrade allows investors to open virtually any type of account they want. In addition to standard individual or joint taxable brokerage accounts, TD Ameritrade has a robo-advisory platform, and also offers a range of retirement accounts. For parents and others who want to open accounts for minors, TD Ameritrade offers custodial accounts (UGMA/UTMA) as well as 529 college savings accounts and Coverdell ESAs. It also offers a variety of specialty accounts, such as trusts and investment accounts for businesses.

LEARN MORE: Best Robo-Advisors

On the banking side, TD Ameritrade offers an interest-bearing cash management account that can have a debit card issued for purchases and ATM withdrawals. And while TD Ameritrade doesn't technically offer a checking account, investors can apply for check-writing privileges to write checks directly from their brokerage account's cash balance.

On the other hand, Webull's account options are far more limited, which is one of the biggest differences between the two brokers. For one thing, Webull only offers individual brokerage accounts, so if you want to open an account with someone else, like your spouse, you'll have to look elsewhere. Webull supports retirement accounts, but only traditional and Roth IRAs, and it doesn't offer custodial, college saving, trust, or other account types. And unlike many of its peers, it doesn't have a cash management account.

READ MORE: Best IRA Accounts

It's worth mentioning that while both of these brokers offer margin accounts, Webull has much lower margin interest rates. Webull's highest margin interest rate as of the summer of 2022 was 6.99%, while TD Ameritrade's was 11.00%. If you regularly use margin, this can make a big difference over time.

Both have well-rated apps that are very functional and easy to use. TD Ameritrade holds ratings of 4.5 and 3.4 out of 5 stars on the App Store and Google Play store, respectively. And Webull's ratings are somewhat better at 4.7 and 4.5.

TD Ameritrade offers the top-notch thinkorswim trading app for more sophisticated investors, which is especially well known for its options and foreign exchange trading capabilities. It has App Store and Google Play ratings of 4.7 and 3.8, respectively.

Prospective customers can test drive the trading platforms of both TD Ameritrade and Webull with fully functional "play money" demo accounts. So, the best way to decide what works best for you might be to try each platform out.

If you want to invest in mutual funds or bonds, Webull isn't the place for you. Conversely, if you want the ability to buy fractional shares of your favorite stocks, or if cryptocurrencies are a part of your investment strategy, TD Ameritrade isn't the best option for you.

On the other hand, if both of these brokers offer the investment products, account types, and features you're looking for, it depends which is a better fit for you. Both are among our favorite overall brokers, so either one could be a good option for your investing journey.