TD Ameritrade Review - NerdWallet

TD Ameritrade Review

TD AmeritradeTD Ameritrade is a powerful online broker with wide appeal: The company’s customer service, $0 minimum balance requirement and large selection of commission-free exchange-traded funds and no-transaction fee mutual funds make it a strong candidate for IRA account holders and beginner investors, but seasoned traders also gravitate to the company because of its premium trading platforms, research and data. The downside: The company’s trade commissions are on the high side at $9.99.

NerdWallet’s rating: 5.0 / 5

Fast facts:

  • Commissions: $9.99 per trade
  • Account minimum: $0
  • Promotion: Up to $600 cash bonus

TD Ameritrade is best for:

  • Beginner investors
  • Advanced traders
  • Commission-free ETFs
  • Trading platforms
  • Research and data

TD Ameritrade at a glance

Overall

Stock trading costs$9.99
Options trades$9.99 + $0.75 per contract
Account minimum$0
Account fees (annual, transfer, closing, inactivity)No annual or inactivity fee; $75 outgoing transfer fee
Trading platformTwo robust platform choices accessible to all customers: thinkorswim and Trade Architect
Mobile appMirrors the desktop and Web platforms
Mutual fundsMore than 2,000 no-transaction-fee mutual funds
Commission-free ETFsMore than 100 commission-free ETFs
Research and dataFree and extensive
Tradable securities• Stocks
• Bonds
• Mutual funds
• ETFs
• Options
• Futures
• Forex
Customer support/branches24/7 phone support; live chat and email support; 126 local branches.
Promotion Commission-free trades for 60 days plus up to $600 in cash bonuses

Where TD Ameritrade shines

Investment selection: TD Ameritrade offers a full selection of investment products, including futures and forex. The company’s list of over 100 commission-free ETFs was curated by Morningstar, a highly respected (and independent) investment research powerhouse. The group includes a diverse mix of equity funds, bond funds, international funds and commodity funds, with reasonable expense ratios. Investors looking for ETFs could easily create a diversified portfolio at TD Ameritrade, and the ability to trade commission-free means you can dollar-cost average into them at no charge.

TD Ameritrade also offers a mutual fund Premier List, also compiled by Morningstar and updated quarterly. The list provides independent recommendations in over 45 different fund categories, with approximately three top funds chosen in each. All funds on the Premier List are no-transaction fee.

Research: TD Ameritrade gives investors free access to research and data that would cost extra at many other online brokerages, including streaming CNBC and analysis from the likes of Morningstar, S&P Capital IQ, and MarketEdge. Investors can also speak to one of the company’s trading specialists — by phone or in person — for free, as well as access the company’s MyTrade social community and use virtual trading tools to test strategies risk-free.

Trading platforms: TD Ameritrade acquired thinkorswim, a trading platform, several years ago, then revamped it last year, strengthening its lineup: Investors can now choose between that platform, which caters to active traders who want to test trade strategies and analyze potential risk and reward, and its Trade Architect platform, which is Web-based and slightly less robust but still offers advanced features like a market/options heat map, screening tools and streaming news. TD Ameritrade also offers mobile trading via its Mobile Trader app, which virtually mirrors its trading platforms with live-streaming news, full options order capabilities and customization.

Account minimum: An account minimum of $0 is rare among online brokers, which often have minimum initial deposits of $1,000 or more. TD Ameritrade’s low minimum makes it easy for novices to get started, which is why we picked it as one of the best brokers for beginner investors. (Investors who want to trade options or utilize margin trading must have a $2,000 balance.)

Customer service: The company is frequently lauded for its customer support, which includes 24/7 phone support, as well as email, live chat, and over 100 local branches so investors can meet with a representative in person.

Where TD Ameritrade falls short

Stock commissions: The company’s trade commission of $9.99 is higher than deep-discount brokers such as OptionsHouse and TradeKing, and even surpasses the trade commissions at the likes of Fidelity and Charles Schwab, where trade commissions are $7.95 and $8.95, respectively. (To compare fees at all online brokerages, use NerdWallet’s Online Brokerage Tool.) As noted above, investors do get access to premium research, data, analysis and multiple trading platforms for free, so depending on how often you use those tools, the higher cost for stock trading here can easily be worth it.

Broker-assisted trades: If you need assistance from a broker, you’ll be charged $44.99 for the trade; comparable online brokers charge closer to $25 on average. Investors can avoid this by completing trades solo (and as mentioned above, TD Ameritrade’s trading platforms are extremely robust).

ETF short-term trading fees: Investors must hold ETFs for a 30-day period; otherwise, TD Ameritrade will levy a short-term trading fee of $19.99. The presence of this fee is standard in the industry, but TD Ameritrade’s is on the high end of the spectrum compared to other online brokers. (Fidelity’s fee, for instance, is $7.95.)

The bottom line

TD Ameritrade’s major shortfall is its higher-than-average trading commissions, but it makes up for that with better-than-average service, research and trading tools that will make everyone from beginner investors to active traders happy. The service and account features offered are above average for this price point and more than sufficient for most retail investors, and the barrier of entry for beginners is low with a $0 minimum deposit. Whether you’re looking to open an IRA after maxing out your 401(k) at work, or you’re interested in trading in a taxable account, TD Ameritrade should be on your list of online brokers to consider.

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

  • Matt Elgazar

    TD Ameritrade has done so many RIDICULOUS unprofessional things that I’ve had it with them.

    Pros: Good platform

    Cons:

    1). BIGGEST CON: TD Ameritrade and TOS CONSTANTLY have technical issues where the platform, App, AND TD website are all down. Why is this so important?! Well when I’m monitoring positions that I need to get out of (or enter) i literally CAN’T get out of a trade. I am at work half the time so then it is impossible for me to call in the order… BY THE WAY IF I DO CALL IN THE ORDER THEN IT TAKES 30 MINUTES FOR SUPPORT TO ANSWER THE PHONE BECAUSE EVERYBODY IS TRYING TO GET OUT OF THEIR POSITIONS BY PHONE!!!!!! UNREAL!!!!!! There is not even a backup safety feature where we can get out of positions! For example I was long an ES contract that had a stop order entered by default as a stop day order. At the end of the day i tried to re-enter my stop but the app wouldn’t start, nor would the platform or website be available for login. Well guess what, i have to hold futures position in es that I don’t want to be in and have no stop order in the market because none of these services are available, and tech support takes 30 minutes to answer a call. I could have easily lost my entire account simply because of a TOS tech support issue, but luckily the market didn’t move much against me. In the end I lost about 2 more points than i wanted to. This happened to me countless times within the last year (2015).

    2). Platform and app are EXTREMELY SLOW. My mac is by no means slow, but when i launch the platform or the app on my galaxy note 4 phone, the data will be so delayed EVEN WHEN I CLICK LIVE DATA STREAM (no delay).

    3). Fees are extremely high. Much higher than other broker dealers. Hard to lower those fees unless you trade a ton of volume.

  • Terry Adams

    Was the author paid by TD Ameritrade to write this article? There is no way a realistic view of TD Ameritrade could be even remotely flattering. They’re known around the globe for their shady business practices and shabby bug-ridden software tools. You couldn’t pay me any amount of money to ever use TD Ameritrade’s trading platforms.

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