In this TD Ameritrade review, we discuss the benefits and drawbacks of working with TD Ameritrade and whether it is the right brokerage for your needs.
Investing is an important part of everyone’s financial life. It’s one of the best ways to save and grow your money over the long term by purchasing stocks, bonds, mutual funds, and other assets.
Traditional brokerage companies give you some of the most flexible investment options out there, allowing you to invest in a wide variety of assets using various types of accounts. At TD Ameritrade, their goal is to provide highly accessible customer support and research tools while keeping costs as low as possible.
TD Ameritrade Review at a Glance
- In-depth research tools
- No account minimums
- Powerful mobile app
- Wide selection of commission-free ETFs
- High commission for trades
- Short-term trading fees
Best for: TD Ameritrade is a solid choice of brokerage for most people who want to start investing. Its lack of account minimums makes it great for people who are just starting out while its powerful research tools make it useful for seasoned investors as well. People who want more automation tools and handholding might be better served with a robo-advisor or similar company.
See Also: Blooom: A Robo-Advisor to Help Grow Your 401(k) (Plus a Free Analysis Tool)
What is TD Ameritrade?
TD Ameritrade is an Omaha, Nebraska-based brokerage firm.
A brokerage firm is a financial company that exists to help people buy and sell securities, such as stocks and bonds.
Today, when people talk about brokerage firms, they’re generally discussing companies that offer investment accounts that let them purchase stocks, bonds, mutual funds, options, futures, Exchange Traded Funds, and other investment products.
TD Ameritrade positions itself as a “pioneer” in the brokerage industry, touting itself as one of the first companies to offer discount-rate trade commissions and as one of the first companies to use technology to make investing faster and easier.
Today, TD Ameritrade is known for its exceptional customer service and powerful research tools, which all come with an account that charges no maintenance fees and no minimums.
See Also: How to Invest: A Beginner’s Guide to Investing in the Stock Market
How Does TD Ameritrade Work?
TD Ameritrade is a full-fledged brokerage firm. To get started, you’ll need to set up your account, make a deposit, and research the tools and fees associated with your investments.
Opening an account with TD Ameritrade is easy. There are no account minimums to meet, so all you have to do is set up your account online.
Like most financial companies, TD Ameritrade will ask you to provide a username, password, and some personal information. This information will be used to prove your identity so that you can begin buying and selling investments.
Once you’ve created your account, you’ll have to link a checking account to your TD Ameritrade account. This is the account that you will use to fund your investment purchases. If you ever make withdrawals from your account, this is the checking account that the money will be sent to.
Once you make a deposit to your account, you’ll be able to start buying and selling securities.
One of the most important things to know about a brokerage account is what investment options are available to you.
Nearly every brokerage will let you invest in things like stocks, bonds, mutual funds, ETFs, and options. What you really want to pay attention to is the investment options that the brokerage promotes. Often, you’ll be able to get commission-free trades or other benefits for purchasing select types of investments.
Unlike many large brokerages that run their own mutual funds and ETFs, TD Ameritrade does not run its own funds. Instead, it has partnered with many of the leading providers to offer more than 300 commission-free Exchange Traded Funds.
ETFs work like mutual funds in that buying a share in a single ETF lets you split your investment among dozens or hundreds of different securities.
TD Ameritrade offers more than 120 equity-focused ETFs, more than 70 bond ETFs, and nearly 100 international ETFs, making it easy for you to design a diversified portfolio without paying a single commission fee. Many of these ETFs are low-fee index funds, which means you can save a lot of money on management fees.
If you’d rather invest in individual securities, TD Ameritrade gives you that option. You can buy and sell stocks, bonds, options, and more using your brokerage account.
When you invest, you’re putting money away for use in the future. Many people invest with goals that are very far into the future, such as retirement or to provide for a child’s education. There are different types of investment accounts that are designed specifically for these purposes.
For example, Individual Retirement Accounts (IRAs) are designed for people who want to put money aside for retirement. IRAs provide tax benefits to people who use them to save for retirement, so having the ability to invest in an IRA can be a major benefit. Other types of accounts which are used for different purposes, like 529s, also get tax advantages.
TD Ameritrade has experience in administering all sorts of brokerage accounts. You can get a standard taxable brokerage account that offers no special benefits or restrictions. You can also open retirement accounts or education accounts. That lets you keep all of your money with one company while making the most of the tax benefits offered by these specialty accounts.
People with more complicated financial situations can even open trusts or small business retirement plans at TD Ameritrade, making it a great one-stop shop for your investment needs.
Investing isn’t free. Most brokerages charge fees, known as commissions, each time you make a trade. Even if you invest in commission-free vehicles, such as ETFs, those funds will charge management fees.
Your goal should be to find the cheapest way to invest in the securities that meet your financial goals.
Here are the fees you’ll have to pay for trading at TD Ameritrade.
|Type of Trade||Fee|
|Stock or ETF||$6.95|
|Commission-Free ETF or Mutual Fund||$0|
|No-Load Mutual Fund||$49.99|
|Options||$6.95 + .75 per contract|
|Treasuries at auction||$0|
|Bonds and CDs||Variable|
|Futures||$2.25 per contract + exchange and regulatory fees|
TD Ameritrade is known for the powerful research tools it provides to its customers. There is no fee to access these tools, they simply come with your TD Ameritrade account. Having these tools at your disposal makes it easy to track individual companies or securities and determine if they are a worthwhile investment.
Your TD Ameritrade account comes with unique tools for different investing objectives.
Market Edge offers technical analysis and market news that you can use to get up to date on individual stocks or markets as a whole.
The ETF Market Center helps you screen the ETFs that might meet your needs based on a variety of settings.
The Social Signals tool taps into social media platforms like Twitter to help you get a feel for public sentiments surrounding the market and various companies.
These tools and the many others offered by TD Ameritrade will help you stay on the cutting edge of the market so that you can make investment decisions quickly.
Two TD Ameritrade mobile apps offer mobility for investors who prefer to monitor and trade investments while on-the-go. Labeled TD Ameritrade Mobile, this app allows monitoring of investments while TD Ameritrade Mobile Trader allows trading. Both apps are available to iPhone and Android users.
One thing that TD Ameritrade excels at is providing strong customer service. You can easily call the company 24/7 to get help. You can also get help by email, text, or even Facebook Messenger.
If you’d rather speak to someone in person, you can visit any of the hundreds of TD Ameritrade branches across the United States to discuss your account.
TD Ameritrade FAQs
Let’s talk about some of the most common questions people have about TD Ameritrade.
Is there a monthly fee for TD Ameritrade?
No, there is no monthly fee to have a TD Ameritrade account. You will pay fees for other activities, like trading stocks.
How much does it cost to open a TD Ameritrade account?
There is no cost to open a TD Ameritrade account and no minimum deposit requirement for most types of trading. If you want to trade options or trade on margin, you must have at least $2,000 in the account.
How long does it take to buy or sell a stock?
It takes three days from the time that you buy or sell a stock for the trade to settle and for the money or stock to arrive in your account. This is not a requirement set by TD Ameritrade. Rather, the Securities and Exchange Commission has set this rule to allow for recordkeeping and other SEC trading requirements to be met.
Who Should Use TD Ameritrade?
The people who will get the most out of TD Ameritrade are those who want access to powerful research tools while retaining access to fee-free mutual funds and ETFs. If you want to dabble in investing in individual securities while maintaining an index fund-based strategy, TD Ameritrade has all the tools you need.
TD Ameritrade Review Summary
TD Ameritrade is a full-featured brokerage account that offers everything you need to execute an indexing-based strategy and the research tools required for investing effectively in individual securities. Overall, it’s a great choice of brokerage for most investors.