Oanda Vs TD Ameritrade

Category: Broker Guides | Author: Trading Brokers | Date: July 24, 2023

If you are looking for an online broker to trade forex or crypto, you might have come across Oanda and TD Ameritrade. These are two well-known and reputable brokers that offer different features and services to their clients. But which one is better for you? In this article, we will compare Oanda and TD Ameritrade based on their regulation, trading platform, pricing and fees, broker type,  leverage, asset selection, social trading, minimum deposit, withdrawal, and deposit methods. We will also help you decide which broker suits your trading style and goals better.

Overview of Oanda

Oanda

Oanda

Oanda is a US-based online broker that offers forex and CFD trading to clients around the world. It was founded in 1996 by two computer science professors, Dr. Michael Stumm and Dr. Richard Olsen, who wanted to provide a transparent and accessible platform for currency exchange. Oanda is regulated by several top-tier authorities, such as the CFTC and NFA in the US, the FCA in the UK, and the ASIC in Australia. Oanda has a long track record of innovation and customer satisfaction, and it caters to traders of all experience levels and styles. Oanda has a history of being a pioneer in the forex industry, as it was the first company to offer free currency exchange information over the Internet in 1997. It also launched the first fully automated FX trading platform in 2001, and the first online currency converter in 2002.

Oanda offers two account types, standard and premium, depending on the region and the trading volume of the client. Both accounts have access to Oanda’s trading platforms, research tools, educational materials, and customer support. Oanda’s trading platforms include Oanda Trade (web-based), Oanda Desktop (downloadable), MetaTrader 4 (MT4), and TradingView. All of these platforms are customizable, user-friendly, and feature-rich, with advanced charting capabilities powered by TradingView. Oanda Trade also has a mobile app that allows traders to access their accounts and execute trades from anywhere. Oanda’s platforms support various order types, such as market, limit, stop-loss, trailing stop, take-profit, entry orders, etc.

Pros of Oanda

  • Reliable broker with a strong establishment, excellent reputation, and numerous regulations.
  • High-quality trading platforms with powerful research tools.
  • Low forex fees and no minimum deposit requirement.
  • Offers a variety of financial instruments, including forex, CFDs, indices, metals, commodities, and bonds.

Cons of Oanda

  • Limited product portfolio, excluding stocks, ETFs, mutual funds, and cryptocurrencies.
  • Average CFD fees and some non-trading fees.
  • Not listed on a stock exchange or backed by a banking background.
  • Customer support is not available 24/7 with potential long response times.
Oanda Logo

Oanda is a multi-regulated and established online broker offering an excellent range of financial instruments via powerful and user-friendly trading platforms with industry leading trading conditions and a superb selection of premium trading tools for comprehensive market analysis.

Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and may not be suitable for everyone.

Overview of TD Ameritrade

TD Ameritrade

TD Ameritrade

TD Ameritrade is a US online brokerage firm that was founded in 1975 and is headquartered in Omaha, Nebraska. TD Ameritrade is regulated by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the CFTC. TD Ameritrade offers a comprehensive range of investment products and services to cater to the diverse needs of investors. These offerings include stocks, ETFs, options, mutual funds, bonds, futures, forex, and cryptocurrencies.

The platform provides users with multiple trading options, including its own web-based trading platform called TD Ameritrade Trading Platform, and a robust desktop platform known as thinkorswim. For added convenience, TD Ameritrade offers a mobile app that allows users to trade and manage their investments on the go. Recognizing the importance of tools and research, TD Ameritrade equips users with a variety of features to enhance their trading experience. These features include market data packages, customizable watchlists, real-time alerts, powerful screeners, comprehensive news feeds, and insightful reports.

Pros of TD Ameritrade

  • It offers free stock and ETF trading, while forex, bond, and options fees are also low.
  • It has a large and well-established reputation as one of the biggest online brokers in the US.
  • It has a wide range of asset classes and investments, including over 13,000 mutual funds.
  • It has high-quality trading platforms, especially thinkorswim, which is suitable for both beginner and advanced traders.
  • It has good customer support available 24/7 via phone, email, and live chat.
  • It has local branches across the US for in-person assistance.

Cons of TD Ameritrade

  • It charges high fees for non-free funds and futures.
  • It has higher-than-average commissions on most mutual funds, including many popular ones.
  • It has high margin rates on borrowed cash compared to some competitors.
  • It does not offer fractional shares, which means you have to buy whole shares of stocks or ETFs.
TD Ameritrade Logo

TD Ameritrade is one of the best brokers in the USA with a fantastic range of investment products, powerful platforms, high quality tools and an abundance of educational resources to help you make informed decisions.

All investments involve risk, including loss of principal. Past performance does not guarantee future results.

Comparison between Oanda and TD Ameritrade

In this section, we will compare Oanda and TD Ameritrade based on the following features:

Regulation

Oanda is regulated by the FCA in the UK, offering up to £85k protection to UK clients, IIROC in Canada, providing up to CAD 1mn coverage to Canadian clients, and ASIC in Australia, with no protection for clients outside the UK and Canada. TD Ameritrade, on the other hand, is regulated by the SEC and FINRA in the US, offering up to $500k protection to US clients. Both brokers are subject to the Regulation Best Interest (Reg BI) rule, ensuring investment recommendations are made in the client’s best interest.

Trading Platform

Oanda has Oanda Trade, which is a web-based and mobile platform for forex and CFD trading, and MetaTrader 4, which is a popular third-party platform for forex, CFD, and automated trading. TD Ameritrade has TD Ameritrade Web Platform, which is a web-based and mobile platform for stocks, ETFs, options, forex, and futures trading, thinkorswim, which is a desktop and mobile platform for advanced trading on various assets, and Trade Architect, which is a web-based platform for basic trading on stocks, ETFs, options, and mutual funds.

Pricing and Fees

Oanda charges variable spreads and commissions for its forex and CFD trading, depending on the account type and platform. Oanda also charges overnight financing costs, inactivity fees, and fees for deposits/withdrawals, bank wire transfers, and debit card and ACH transactions.

TD Ameritrade offers commission-free trading for online U.S. stocks, ETFs, and options, as well as forex and futures. However, TD Ameritrade charges high margin rates, ranging from 6.25% to 9.5%, depending on the account balance. TD Ameritrade also charges fees for broker-assisted trades, mutual fund transactions, paper statements, account transfers, and wire withdrawals.

Broker Type

Oanda is a market maker broker that uses a no-dealing desk (NDD) execution model for its forex and CFD trading. This means that Oanda acts as a counterparty to its clients’ trades and may have a conflict of interest. However, Oanda claims that it uses advanced pricing technology and liquidity sources to provide competitive spreads and fast execution.

TD Ameritrade is also a market maker broker that uses a dealing desk (DD) execution model for its forex trading. This means that TD Ameritrade acts as a counterparty to its clients’ trades and may have a conflict of interest. TD Ameritrade claims that it uses sophisticated algorithms and multiple liquidity providers to ensure fair pricing and execution. For its futures trading, TD Ameritrade uses an electronic communication network (ECN) execution model that connects clients directly with the exchange without any intermediaries.

Leverage

Oanda offers leverage up to 50:1 for major currency pairs and up to 20:1 for minor currency pairs, commodities, indices, and stocks. TD Ameritrade offers leverage up to 50:1 for major currency pairs and up to 20:1 for minor and exotic pairs. However, leverage may also depend on the account type and the platform used by the trader.

Asset Selection

Both Oanda and TD Ameritrade offer a decent range of assets to trade with. Oanda offers over 68 forex pairs, as well as CFDs on indices, commodities, metals, bonds, and crypto through its partnership with Paxos. TD Ameritrade offers a wide range of investment products and services, such as stocks, ETFs, options, mutual funds, bonds, futures, forex, and crypto. However, TD Ameritrade has more asset classes than Oanda, such as stocks, ETFs, options, and mutual funds.

Social Trading

Oanda does not offer social trading features on its platforms, but it allows clients to use third-party services such as ZuluTrade and TradingView to access copy trading and social trading tools.

TD Ameritrade offers social trading features on its thinkorswim platform, such as chat rooms, trader TV, market news, and social sentiment indicators. TD Ameritrade also allows clients to use third-party services such as TradeWise and Motley Fool to receive trade recommendations and alerts.

Minimum Deposit

Oanda does not have a minimum deposit requirement for its standard account, but it requires a minimum deposit of $20,000 for its premium account. Oanda accepts various payment methods, such as credit/debit cards, bank transfers, PayPal, and checks.

TD Ameritrade also does not have a minimum deposit requirement for its standard account, but it requires a minimum deposit of $25,000 for its futures account. TD Ameritrade accepts payment methods such as ACH transfers, wire transfers, checks, external securities transfers, and physical stock certificates.

Withdrawal and Deposit Methods

Both Oanda and TD Ameritrade offer various payment methods, but there are differences in fees, processing times, and availability. Oanda accepts debit cards, bank transfers, PayPal, Neteller, and Skrill. TD Ameritrade accepts debit cards, bank transfers, checks, and physical stock certificates. However, it charges a $25 fee for wire transfers, and processing times vary based on the payment method and banks involved. Both brokers require withdrawals to be made through the same method used for funding the account.

Which Should You Choose: Oanda or TD Ameritrade?

The answer to this question depends on your trading preferences and goals. Here are some factors to consider when choosing between Oanda and TD Ameritrade: If you are looking for a global and regulated broker that offers low spreads on forex pairs and access to crypto trading, you might prefer Oanda. If you are looking for a US-based and reputable broker that offers commission-free trading on stocks, ETFs and options and access to a wide range of investment products and services, you might prefer TD Ameritrade. If you are looking for a broker that offers leverage for forex and CFD trading, you might prefer Oanda, especially if you are not based in the US.

Also, If you are looking for a broker that offers more asset classes to trade with, such as stocks, ETFs, options and mutual funds, you might prefer TD Ameritrade. If you are looking for a broker that offers social trading or copy trading features, you might be disappointed with both Oanda and TD Ameritrade, as they do not offer these features on their platforms. However, TD Ameritrade’s desktop platform thinkorswim has a social trading feature called myTrade. If you are looking for a broker that has no minimum deposit requirement, you might prefer Oanda, as TD Ameritrade requires a minimum deposit of $2,000 or an electronic funding of $100 per month.

Conclusion

When it comes to online brokers with a solid reputation, Oanda and TD Ameritrade are widely recognized names, each offering distinct features and services to their clients. These brokers come with their own set of strengths and weaknesses, and they cater to different types of traders. That’s why it’s crucial to carefully compare them based on your specific trading preferences and goals before reaching a decision. Our aim with this article has been to provide you with the necessary understanding of the disparities between Oanda and TD Ameritrade, empowering you to choose the broker that aligns best with your needs. Wishing you a fulfilling and prosperous trading journey ahead. Happy trading!


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