TD Ameritrade account types offered: individual, joint, retirement (Roth IRA, traditional, Simple, SEP, Custodial), Education/College-Saving Plans, 529, HSA.

Although the standard taxable investment account may be one of the most common brokerage account options, TD Ameritrade offers a large variety of different account types to choose from based on your specific investing goals and criteria. This article will walk you through the different options and the specific purpose each one was designed for.


TD Ameritrade Standard Accounts Types

TD Ameritrade offers a few different types of standard accounts that are all very similar in terms of functionality and capabilities, and differ mainly in the number and type of account owners. The individual standard – the most common account - is setup with a single owner and has no minimum account requirement. With similar functionality, Guardianship or Conservatorship accounts are those where the assets of the account holder – usually a minor or person who is no longer capable of managing their finances - are managed by a court-appointed guardian.


TD Ameritrade Accounts Types


The other standard account types, such as Joint Tenants with Rights of Survivorship (JTWROS) and Tenants in Common accounts are setup with two or more account owners. A JTWROS account’s owners each have an undivided interest in the account’s assets, whereas the owners of a Tenants in Common account can each have a different ownership percentage. Community Property accounts are setup by two married individuals who acquired property together during their marriage. Both spouses have equal ownership of the account’s assets as it is assumed the account’s accumulated property is the result of both of their efforts.


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TD Ameritrade Retirement Accounts Types

TD Ameritrade also offers all of the most common retirement account types, including the Traditional, Roth and SEP IRA, and a Solo 401K account for small businesses and self-employed individuals. With a traditional IRA, you can contribute up to $6,000 of pre-tax income in 2019. Account owners who are 50 years of age or older can contribute an additional $1,000 each year. The main tax advantage of the traditional IRA is that it lowers your current taxable income.

The Roth IRA is very similar to a traditional IRA with the same contribution limits, however in this case the contributions are not pre-tax and therefore are not tax-deductible from your current income. A Roth IRA is funded with income that you’ve already been taxed on, and so the benefit is that you don’t need to pay taxes on it once you withdraw funds from the account (with a traditional IRA you will pay taxes on redemptions). The Roth IRA also offers more flexibility when withdrawing funds as you are allowed to withdraw your contributions anytime (since you’ve already been taxed on them) and withdrawals of earnings on your contributions are tax-free so long as the Roth IRA has been open for at least five years.

SEP IRA (Simplified Employee Pension Plan) and Solo 401K accounts are intended for small businesses and self-employed individuals. They offer the main advantage of being easier to setup, more flexible, and less cost-burdensome than the traditional employee retirement plans you would find at larger companies.


TD Ameritrade Education/College-Saving Plans Types

These accounts, which include 529 plans, Coverdell Education Savings Accounts, and Custodial Uniform Gift to Minors (UGMA) Accounts, are a great idea for parents looking to grow their savings tax-deferred for the benefit of a child’s college education. The 529 plan is very flexible and meets the needs of most families (no income limits) by allowing you to contribute pre-tax income to the plan to use toward a child’s future education expenses.

A Coverdell Education Savings account is similar to the 529 Plan in that the account’s assets must be used to pay for qualified educational expenses (tuition, textbooks, etc.). It is different from the 529 in that contributions are not tax-deductible, however distributions are tax-free. Annual contributions to the Coverdell account are capped at $2,000. UGMA accounts are a form of custodial account that you can setup under the name and benefit of a minor, who owns any assets that are gifted to the account.


Other TD Ameritrade Specialty Investment Account Types

In addition to the above-mentioned account types, TD Ameritrade offers accounts under a variety of different legal structures, such as Trusts, Partnerships, Investment Clubs, and small business accounts to name a few. Trusts are commonly used by wealthier individuals to transfer assets to a relative after death, whereas partnerships and small business accounts are setup and owned by a business for the purpose of investing as a corporation. No matter what your investment goals and financial condition are, whether you’re investing as an individual, couple, or organization, TD Ameritrade has an account that will fit your needs.


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