Acorns vs TD Ameritrade (2023)

TD Ameritrade versus Acorns brokerage firm comparison: IRA, fees, commissions, benefits, pros and cons. Which broker to choose?

Acorns vs. TD Ameritrade Introduction

In a battle of opposites, Acorns would like to dethrone the much larger TD Ameritrade. Can it do that? We have an answer.

Cost

Services

Promotions

Acorns: Get Acorns absolutely free and a $20 bonus.

TD Ameritrade: Get $0 commissions and ACAT fee reimbursement.

For Available Investments, TD Ameritrade Is Better

Acorns offers robo accounts only. These accounts are automatically invested into a small selection of exchange-traded funds. There is also a round-up program that takes spare change from debit and credit card purchases and deposits it into the linked brokerage account. In a similar service, bonus investments can be earned by shopping at participating retailers. Acorns does charge a monthly fee for all of this (either $3 or $5, depending on the package chosen).





TD Ameritrade is pretty much the opposite of Acorns. The former only has self-directed accounts and charges no account fees. There is no round-up or bonus program, either. Account holders can trade stocks, ETF’s, mutual funds, closed-end funds, bonds, futures, and forex.





These assets can be traded in a wide variety of account types. TD Ameritrade offers UTMA/UGMA accounts, money purchase pension plans, trusts, investment club accounts, Coverdell education accounts, and more. Acorns, by comparison, has a much smaller list of account types.

TD Ameritrade Easily Wins for Margin Accounts

TD Ameritrade clients can open both cash and margin accounts. The latter require $2,000 in equity to trade with borrowed funds. This privilege does come at a steep cost. Small balances are 14%. The tiered schedule bottoms out at 12% with a margin debit of $250,000 or more.

As a robo-only advisor, Acorns does not offer margin trading.

TD Ameritrade Is Also Our Pick for Computer Software

Investors at TD Ameritrade get to use a desktop platform, a website, or both. Although the most robust trading tools will be found on the desktop system, the website itself has some really effective trading tools. For example, we found a trade bar that can submit orders for securities using just a string of characters.





TD Ameritrade’s desktop software has some advanced features the website is missing, such as Level 2 quotes, advanced order types, live video news, and very sophisticated charting.

Because Acorns doesn’t have self-directed accounts, there are no trading tools on the broker’s website. We did find a few investing tools. These include a hypothetical graph of account growth and links to retailers that offer account deposits in return for purchases.

Acorns Is Way Behind in the Mobile App Category

The Acorns mobile app is designed for phones only. It continues the company’s emphasis on simple software. During our examination, we didn’t find anything that’s not on the company’s website. We did find an advertisement for custodial accounts, which are available only on the company’s $5 monthly plan.





TD Ameritrade actually has two apps, and both function on tablets and phones. Combined, they offer an amazing trading experience with all sorts of gadgets that won’t be found on the Acorns app. Examples include:

• Horizontal charting with many tools
• Advanced order ticket with lots of order types
• Level 2 quotes
• Mobile check deposit
• Watchlists
• Security profiles with trade recommendations
• Alerts
• Market news in multiple formats

Both Ameritrade apps have smartwatch companions. Watch screens deliver various pieces of information, like trade fills, charts with high and low prices, watchlists, and market indexes.

TD Ameritrade Wins for Extra Services

Cash Management Features: Both investment firms offer debit cards. Acorns has more debit card services, although only TD Ameritrade offers checks (Acorns customers can send checks, but there is no checkbook).

Dividend Reinvesting: Acorns’ robo service automatically reinvests dividends. Self-directed accounts at TD Ameritrade can turn on a DRIP.

Fractional Shares: Acorns’ robot buys fractional shares of ETF’s. At TD Ameritrade, fractional shares are only possible with mutual funds.

Individual Retirement Accounts: Although IRA’s are available through either brokerage firm in this contest, TD Ameritrade has more account types. Plus, it doesn’t charge $5 a month for them.

Initial Public Offerings: Available at TD Ameritrade, but not at Acorns.

Extended Hours: Same story here.

Periodic Mutual Fund Investing: Ditto.

Our Recommendations

ETF & Stock Trading: With very good trading software and lots of research tools, TD Ameritrade gets our endorsement.

Mutual Fund Trading: TD Ameritrade is it on this one.

Small Accounts: A flat monthly fee is not a good idea for small accounts. We recommend TD Ameritrade instead.

Beginners: A robo account with Acorns would be a good move.

Long-Term Investors and Retirement Savers: This one is debatable. Acorns has custodial accounts and an emphasis on long-term investing. But TD Ameritrade has more retirement accounts, including self-employed 401(k)’s, plus target-date mutual funds and the Coverdell account.

Promotions

Acorns: Get Acorns absolutely free and a $20 bonus.

TD Ameritrade: Get $0 commissions and ACAT fee reimbursement.

Acorns vs TD Ameritrade Assessment

Acorns and TD Ameritrade are very different brokerage firms. Beginners and robo investors will find what they’re looking for at Acorns, but an advanced trading experience can only be had at TD Ameritrade.

TD Ameritrade Offer: Open TD Ameritrade Account

Acorns Offer: Open Acorns Account