TD Ameritrade Review

TD Ameritrade brokerage firm review: rating, fees and trading commissions, pros and cons, minimum requirements and promotion offers to open a new online discount broker account or IRA.


TD Ameritrade Rating:  4.5-star brokerage firm rating

  • Stocks & ETFs: $6.95
  • Options: $6.95 + $0.75 per contract
  • Mutual Funds: $49.99

TD Ameritrade Investing Review

TD Ameritrade is one of the largest brokerage firms in the United States. But deep pockets don’t necessarily translate into exceptional performance for clients. This article will analyze TD Ameritrade in vital investing categories, and then evaluate the company’s performance against some of its major rivals.

Range of Investment Vehicles

TD Ameritrade Investments Rating

TD Ameritrade currently offers trading in equities, warrants, fixed-income securities (including brokered CD’s), option contracts, stock IPO’s, currencies, futures (including options on futures and bitcoin futures), ETF’s, closed-end funds, and mutual funds. Many stocks can be traded during extended hours, and some ETF’s are tradable 24 hours a day, 5 days a week.

Precious metals and contracts for difference are not available at TD Ameritrade. The brokerage house also doesn’t have any significant emphasis on global trading. American Depository Receipts that trade on U.S. exchanges are available, but there’s no access to foreign markets.

Financial Research and Education

TD Ameritrade Research Rating

TD Ameritrade’s site contains a large assortment of learning materials. These can be found by clicking on the ‘Education’ tab in the top menu. The ‘Research & Ideas’ and ‘Planning & Retirement’ tabs also contain lots of good information.

For general investing education, we found numerous videos, self-guided course, webinars, and articles on a wide range of topics. These include how to build a bond ladder, the basics of trading options, and how to use technical analysis. Besides common securities like stocks, bonds, and options, there are also resources on currencies and futures contracts.

Security profile pages at TD Ameritrade contain tremendous amounts of important data. During our research, we found third-party stock reports available for download free of charge in pdf format. News articles are listed for each security, company events are posted, and comparisons are listed for a stock’s peers. The TD Ameritrade site also posts earnings for a stock, and relevant tweets are pulled from Twitter.


Ameritrade Research Review


Screeners on the broker’s website have the ability to scan the markets for potential investments. During our testing, we found them easy to use. The ETF scanner is able to search by Morningstar style box, portfolio turnover, SEC 30-day yield, geographic region, sector exposure, and many other variables.

Cash Management

TD Ameritrade Cash Management Rating

TD Ameritrade clients can add a debit card and checks to a brokerage account free of charge. There are no monthly charges, checks are free, and there is no limit on the number of checks that can be written. A bill pay service is included at no charge, and the broker reimburses ATM fees nationwide, although not globally.

TD Ameritrade partners with its affiliate TD Bank to provide an FDIC sweep program with twice the amount of regular insurance. That’s $500,000 of protection instead of $250,000. Interest is also paid on free cash balances. Currently, the APR ranges from 0.07% to 0.50%, depending on balance.

The cash management features at TD Ameritrade do not create a separate bank account. Rather, under the broker’s system, the original account remains an investment account with a core cash position linked to the checks and debit card.

Exchange-Traded Funds

TD Ameritrade ETF Rating

All US-listed exchange-traded funds are available for trading at TD Ameritrade. The broker has created a lineup of 571 ETF’s that can be traded with zero commissions. These funds must be held at least 30 days; otherwise a short-term trade fee (an odd figure of $13.90) is charged. Some of the fund families on the list include ProShares, WisdomTree, and SPDR.


Ameritrade ETFs Review


A very extensive ETF center on TD Ameritrade’s website hosts fund commentary by Morningstar, a fund comparison tool, and fund recommendations by CFRA.

Promotion

Trade free for 60 days + get up to $600.

Open TD Ameritrade Account

Mutual Funds

TD Ameritrade Mutual Funds Rating

Mutual fund investors have equally good resources. Using the broker’s screener, we found 11,222 funds available for new purchases. Of these, roughly 3,980 are available with no transaction fee. Most of these also come with zero load when purchased through TD Ameritrade.

As with ETF’s, there is a very good mutual fund center on the broker’s website, with a Premier List available courtesy of Morningstar. The list is updated quarterly and recommends investments in funds that meet stringent criteria.

Other highlights on the mutual fund center include quick pre-defined searches, a chart with funds by category (such as core equity, regional, or income), fund commentary, and an x-ray tool that examines holdings in a fund.

TD Ameritrade Pricing

TD Ameritrade Pricing Rating

Stock and non-commission-free ETF transactions cost $6.95 each at TD Ameritrade. Using the broker’s automated phone system instead of the website increases the price to $34.99. Using a live broker over the phone costs a very steep $44.99.

Option trades impose an extra 75¢ per contract. Exercises and assignments are a pricey $19.99.

Mutual funds with a load are always free to trade. No-load funds that don’t appear on the broker’s no-transaction-fee list cost $49.99 per trade (buy and sell both).

Fixed-income securities are usually priced on a markup/markdown basis. If TD Ameritrade acts as a broker instead of an agent, the price is $1 per bond with a $10 minimum and a $500 maximum.

Futures contracts are $2.25 each. Exchange and regulatory fees are passed onto the customer. For forex, the broker charges $0.10 per 1,000 currency units with a minimum commission of $1.

Margin loans tend to be on the pricey side as well. Currently, a debit under $10,000 costs 10.75%.

Despite these rather steep charges, a brokerage account has no regular fees. TD Ameritrade imposes no maintenance, low-balance, or annual charges. There is no fee to close any type of account, and there is also no minimum deposit for any account.

Portfolio Management and Financial Advice

TD Ameritrade Management Rating

Although our brokerage firm under investigation had a rough showing in the previous category, it’s going to get better here. A robo-advisory service is available for just 30 basis points per year. The service trades low-cost ETF’s, includes tax-loss harvesting at no additional cost, and requires $5,000 to begin.

TD Ameritrade has done a good job so far in this survey of offering a wide range of services, and it’s not going to disappoint in this category, either. Investors who don’t trust a software program to manage their accounts can sign up for one of the broker’s traditional packages. The cheapest option costs 0.60% but requires a $250,000 commitment. The advantage with this one is that a one-on-one relationship with a human advisor is included at no extra cost. Other packages require only $25,000 with annual fees between 75 and 90 basis points.

Customer Support

TD Ameritrade Customer Rating

TD Ameritrade has representatives on the phone available all hours of the day and night, 365 days a year. In addition to English, the broker-dealer provides service in a few other languages, including Chinese and Spanish.

When TD Ameritrade took over Scottrade, the new enterprise shut down some local branches, but incorporated others. Currently, TD Ameritrade has about 360 locations, which is one of the largest networks of any online discount broker. Most of these offices are open during the weekday.

The TDA website has a digital assistant named Ted. He’s able to answer many investment questions, but if a response doesn’t answer your question, there is usually a link posted to a human chat service. What we don’t like about this service is that customers are required to go through Ted first.

We were impressed with the self-help section on the broker’s website. It’s possible to perform many account-related functions here, such as report a security issue, refer a friend, modify communication preferences, download a form, and more.

Website

TD Ameritrade Website Rating

The website doesn’t disappoint in other areas, either. The broker’s clients get to buy and sell securities with some user-friendly tools. The first highlight is SnapTicket, a powerful trade bar at the bottom of the browsing window. During our testing, we were able to submit orders for stocks, ETF’s, and options. Conditional orders, such as one cancels another, have to be submitted on web pages.

TD Ameritrade recently retired its browser platform Trade Architect due to browser incompatibility issues. While this is disappointing, the website itself offers decent charting. We found comparisons, technical studies, multiple graph styles, and company events. A chart can be detached and displayed full screen.

The broker’s site offers many more helpful features, including alerts, option chains, triggers, and a watchlist. Bonds can be traded through the website, although futures and forex have to be traded on the firm’s desktop software, which we’ll look at shortly.


Ameritrade Review


Mobile Apps

TD Ameritrade Apps Rating

There are 3 mobile apps available to TD Ameritrade customers. Why does the broker offer 3? Probably because a single combined app would be too large for one download. The apps offer different functions, although two of them are pretty similar. Designed for equity, options, futures, and forex trading, they provide powerful charting tools (one of them has over 400 technical studies) and sophisticated trading tickets with many advanced choices. Alerts and watchlists can be set up as well. A simulated trading feature is another plus.

The third app offers mutual fund trading, mobile check deposit, market videos courtesy of Reuters, and a very good economic calendar. One app offers free streaming of CNBC. Security research is possible, and facial recognition can be enabled.


Ameritrade Mobile Review


Desktop Software

TD Ameritrade Trading Rating

Although TD Ameritrade has eliminated its browser platform, it thankfully has retained its desktop software. Called thinkorswim, it offers many powerful trading features, including sophisticated charting with hundreds of technical studies, direct-access routing, Level II quotes, security screeners, and a practice trading mode. thinkorswim is capable of placing trades for stocks, options, ETF’s, futures, and currencies. Dealing boxes make buying and sell forex a straightforward process. Other great features include a heat map, live streaming of CNBC, an internal customer service contact, and an economic calendar.


Ameritrade Trading Review


Other Tools

TD Ameritrade Tools Rating

Besides all the great software already mentioned, TD Ameritrade self-directed clients can use an app for Apple Watch. It is able to display market data, a watchlist, and trading information on a ticker symbol. Managed accounts clients can use Apple or Android watches.

The brokerage firm has a skill for Amazon Echo as well. The skill is unusual in its ability to provide not just market info, but also trading capability based on voice command.

With an Apple phone, it’s possible to send an iMessage to a TD Ameritrade associate. Missing in this category is an app for Apple TV.

Retirement and Education Accounts

TD Ameritrade IRA Rating

In addition to taxable accounts, TD Ameritrade offers a wide selection of nontaxable accounts for retirement and education planning. The broker’s IRA selection includes Traditional, Roth, Rollover, Minor, SEP, and SIMPLE varieties. Self-employed 401(k) plans are available, along with UTMA/UGMA, Coverdell, and 529 plans. TD Ameritrade does not charge any fees for these accounts. This generous policy includes no fee to close an account.

Using TD Ameritrade’s mutual fund screener, we found 585 target-date mutual funds designed for retirement saving. About half of these have no transaction fee. Some of the available fund families include Allianz, Fidelity, BlackRock, and Goldman Sachs.

Comparison

TD Ameritrade Comparison

TD Ameritrade does quite well when compared to most of its rivals. Its software is the best we have seen in the industry. Its weakest area is cost; Ally Invest and Schwab are at $4.95 per stock trade. At this rate, and with very good software tools of their own, they both look like better values. Several brokers, including Firstrade, have gone all the way to $0; and Firstrade offers the $0 commission for mutual fund trades.

USAA offers more mutual funds than TD Ameritrade, although most firms offer fewer. TD Ameritrade’s range of investments is larger than everyone except Interactive Brokers. Betterment has a lower fee on its robo service, but doesn’t provide the same level of old school management that TD Ameritrade delivers.

Recommendations

TD Ameritrade Funds Rating

We recommend TD Ameritrade for pretty much everything except trading contracts for difference and global investing. Interactive Brokers would be a better choice in these areas. Traders who want the best value should consider Firstrade.

TD Ameritrade Review Judgment

Hands down, TD Ameritrade is one of the best brokerage firms in the industry.

TD Ameritrade Promotion

Trade free for 60 days + get up to $600.

Open TD Ameritrade Account

TD Ameritrade Commissions and Fees

InvestmentsPrice
Stocks and ETFs $6.95
Stocks and ETFs broker assisted $49.99
Stocks and ETFs interactive voice response (IVR) telephone system $34.99
Options $6.95 + $0.75 per contract
No-load mutual funds $49.99
Treasuries at auction $25
All other bonds and CMOs, CDs on a net yield basis
Futures$2.25 fee per contract (plus exchange & regulatory fees)
ForexNon-commission currency pairs trade in increments of 10,000 units (and do not contain a "#" symbol suffix). There are no additional fees or charges.

TD Ameritrade IRA & Account Fees

FeeAmount
IRA Setup Fee$0
Annual IRA Fee$0
IRA Termination Fee$0
Full Account Transfer Out$75
Partial Account Transfer Out$0
Outgoing Wire Fees (Domestic)$25
Outgoing Wire Fees (International)$25
Account Closing Fee$0

TD Ameritrade Margin Rates

Debit Balance Margin Interest Rates
above $999,999 7.75%
$250,000 - $999,999 8.50%
$100,000 - $249,999 8.75%
$50,000 - $99,999 9.00%
$25,000 - $49,999 10.00%
$10,000 - $24,999 10.25%
under $10,000 10.50%


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TD Ameritrade reviewed by TopRatedFirms.com Rating: 4.5