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TD Ameritrade

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TD Ameritrade is a top brokerage for investors across the United States. With competitive fees, a wide range of account and investment options, and excellent investor resources, this platform is certainly worth considering if you’re in the market for a new home for your stocks, bonds, and other investments.In October 2019, TD Ameritrade announced that it would be doing away with commissions.

That’s right — it’s now FREE to trade stocks, ETFs and options online with TD Ameritrade.

The brokerage also offers tax-loss harvesting and four trading platforms tailored to beginner and veteran investors alike.

We took TD Ameritrade for a test drive. Keep reading to learn more about this broker and whether or not it makes sense for your investing needs.

  • No Minimum Opening Deposit – One of the biggest advantages to TD Ameritrade is that the company requires no minimum investment to open a new account. You can fund an account with $50 or $100 and get started investing today. This option makes it easy for investors both large and small to start investing immediately. (However, note that if you want to trade options or on margin, a $2,000 deposit is required.
  • Investment Options – TD Ameritrade offers just about every asset class that you can think of. You have plenty of mutual funds to choose from, with more than 13,000 different fund offerings. These funds can be used in your standard account or to start an individual retirement account (IRA) or a 529 plan to save for your child’s college. All of these accounts can be set up at TD Ameritrade.
  • Trading Tools – The Thinkorswim Trading Platform at TD Ameritrade has been voted the number one trading platform by Barron’s. With access to advanced mobile trading applications, on-the-go trading a breeze. The mobile applications are available for your phone, tablet, or Apple Watch.
  • Tax-Loss Harvesting – TD Ameritrade offers tax-loss harvesting, which can help you minimize portfolio losses with tax-efficient strategies.
  • Access to New Constructs Research (New) – TD Ameritrade clients have long enjoyed access to investing and trading reports from the likes of Jaywalk Consensus, Research Team, Market Edge, S&P Columns, and S&P Research. But now they can also view reports and ratings on more than 10,000 investments courtesy of New Constructs. Some of the most elite institutions have trusted this research firm for years.
  • No Commissions (New) – Joining the ranks of several other discount brokerages, TD Ameritrade now charges no commission fees on online stock, option and ETF trades.

What Is TD Ameritrade?

TD Ameritrade came about as a result of a series of mergers and acquisitions. Based in Omaha, Nebraska, the current company includes former subsidiaries and operations such as First Omaha Securities, Ameritrade, TD Waterhouse, and most recently, Scottrade. Each acquisition has brought new features and helped the company grow into what it is today.

The firm offers just about any investment option that you are looking for, including common stock, preferred stock, bonds, mutual funds, exchange-traded funds (ETFs), options, and money market accounts. You can even open a margin account.

TD Ameritrade is similar to E*TRADE in that the discount broker has branch offices around the country. It currently has investment consultants in more than 100 different branch offices.

How Does TD Ameritrade Work?

The most outstanding features TD Ameritrade has to offer include its array of account offerings, a wide range of investment choices, educational resources, and diverse trading platforms.

Accounts and Investments Offered by TD Ameritrade

As a full-service brokerage, TD Ameritrade offers just about any kind of account you may want. TD says that the most common new accounts include:

  • Individual
  • Joint Tenants WROS (With Rights of Survivorship)
  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • Trust
  • UTMA/UGMA

Most accounts at TD Ameritrade fall under the broad categories of standard (taxable), retirement (tax-advantaged), education savings (tax-advantaged), businesses, and trusts.

Once your account is open and funded (typically, there is no minimum opening deposit at TD Ameritrade), you can invest in pretty much anything available in significant stock, bond, mutual fund, and other investment markets.

Major investment categories include:

  • Stocks – Access major global markets like the NYSE and NASDAQ, plus over-the-counter (pink sheet) stocks. While you can trade penny stocks, Investor Junkie doesn’t recommend this risky investment style.
  • Options – Options investing is best suited to veteran traders. There are many risks to options trading that you should understand before buying in. However, you can quickly execute options trades and build complex, multi-leg options trades using TD Ameritrade’s platforms.
  • ETFs – You can buy and sell exchange-traded funds just like stocks through your TD Ameritrade account. TD Ameritrade offers more than 300 ETFs commission-free.
  • Mutual Funds – Easily invest in top mutual fund families through your account. TD Ameritrade also offers thousands of mutual funds with no buying or selling fees.
  • Futures – Like options, futures are best left to the veterans of the investment world. If you can stomach the world of commodities, however, you can trade contracts with competitive pricing.
  • Forex – Foreign exchange isn’t just for vacations to exotic countries around the world. TD Ameritrade brokerage accounts support 24 currencies including the popular euro, British pound, Swiss franc, Japanese yen, and many others.
  • Managed Portfolios – You can choose between a set of portfolios that work similarly to what many robo-advisor firms offer today, or work with a professional advisor to build a custom portfolio for your needs.
  • Other Products – Once you open an account, TD offers cash management, bonds, CDs and annuities.

That’s pretty much everything you can buy! Unless you’re a high-net-worth individual or accredited investor, you shouldn’t find TD Ameritrade limiting in any way. And if you do have six figures or more ready to invest, you can find many good fits for your portfolio here as well.

Education Resources

If you’re new to the world of investing, getting started can be intimidating. Most significant brokerages offer resources for beginner to advanced investors to level up their knowledge. These resources can help you learn more about basic investing principles and get detailed views into specific securities.

For specific stock and other investment analysis, TD Ameritrade gives you access to New Constructs, Jaywalk Consensus, Research Team, Market Edge, S&P Columns, and S&P Research. These can help inform better investment decisions. Of course, you should always do your own analysis as well and should never invest in something you don’t understand or purely by a research report recommendation.

General education resources include articles, videos, webinars, courses, and live in-person events.

Platforms and Tools Offered

TD Ameritrade offers investors free access to several different trading platforms. You can manage your account and enter trades through them. You can trade through your web browser or a mobile or desktop app.

    1. Web trading platform – The online trading system for TD Ameritrade is sufficient for most passive investors. You can log in and view your account, research investments, and enter trades through the TD Ameritrade website. It handles all of the basics and is ideal for newer investors and investors with less complex needs.
    2. Thinkorswim – The award-winning Thinkorswim platform is ideal for experienced and active traders. This platform is on par with what many professional traders use every day. It supports a huge range of charts, customizable views, and analytics resources, as well as the ability to execute trades within the platform in a couple of quick clicks.
    3. Mobile Trading – We live in a mobile, always-connected world. With TD Ameritrade and most online brokers, stepping away from the computer should not sever your connection to your investments.
    4. TD Ameritrade Mobile – The mobile app is available for major smartphone operating systems and even supports the Apple Watch. This feature is ideal for trading on the go and keeping tabs on your account. As with the web platform, it’s good for beginner to intermediate investors but does not support the powerful trading tools available in the other platforms.
    5. TD Ameritrade Mobile Trader – The mobile companion to Thinkorswim gives you advanced trading features from the convenient location of your pocket with an Android or iOS device.

TD Ameritrade Pricing and Fees

In October 2019, TD Ameritrade joined the growing ranks of commission-free online brokerages.

That means you can trade stocks, ETFs and options for free (except note the 65-cent contract fee).

If you wish to place a broker-assisted trade, the new flat fee is now $25.

TD Ameritrade offers hundreds of no-transaction-fee mutual funds. However, if you want to trade a no-load fund not on that list, you’ll still pay $49.99 per trade.

Futures and options on futures require a $2.25 fee per contract, plus exchange and regulatory fees.

Customer Service

TD Ameritrade generally offers well-rated customer service. You can get help by phone or email or in a physical TD Ameritrade branch. Apple users can also reach customer service via iMessage on their iPhones.

TD Ameritrade is a huge company, so many customer service options are available 24/7. There are more than 360 branch locations in the U.S., so if you live in or near a major metropolitan area, you may be able to access in-person support within a short drive of your home or work.

Ease of Use

TD Ameritrade is useful for investors and traders of all levels. It offers tools and features useful for essential, passive investing, all the way up to professional, active trading. That makes it an excellent place to start and maintain an account no matter where you are in your own financial journey.

Web-based, mobile, and desktop platforms do require some level of computer and internet knowledge. If you can’t manage your accounts digitally, you can place orders by phone for an added fee.

Pros and Cons

Pros

  • Commission-Free Trades — TD Ameritrade offers free online stock, ETF and option trades.
  • Easy-to-Use Interface — The platform is streamlined and easy enough for beginner investors to manage.
  • Research and Education — TD Ameritrade has many options to help you find the right stock, mutual fund, or ETF for your investing needs.

Cons

  • Tricky for Total Beginners — The only big drawback to TD Ameritrade is that brand-new investors might find its trading platforms a bit difficult.

Summary

TD Ameritrade is a competitive brokerage with reasonable fees, extensive resources, great trading platforms, and generally good ratings. While it has made a few missteps in the past (a data breach in 2007 and a problem with its money market account during the Financial Crisis), it is generally well respected and enjoyed by customers.

The company regularly adds new features and tools. For example, tax-loss harvesting was added in recent years. This brokerage competes with other major discount brokerages seriously and is worth consideration.

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