TD Ameritrade Review
TD Ameritrade — which we named one of the best overall IRA account providers — is a tough broker to beat. It has above-average research tools, a large selection of commission-free ETFs, over 2,000 transaction-fee free mutual funds and strong customer support, including the option to meet in person at over 100 local branches.TD Ameritrade
Open a TD Ameritrade account
TD Ameritrade is best for:
- Beginner investors
- ETF investors
- Technical analysis
- Automated trading platforms
- IRA accounts (learn more about TD Ameritrade IRA accounts)
- Options trading
Whether you’re a beginner investor looking to open your first retirement account or a seasoned trader, you’re likely to find what you need in TD Ameritrade. The online broker has slightly higher trade commissions than some of the competition, but those higher costs include access to premium research, data, trading platforms and award-winning customer service. Investor costs are also kept down by a large, high-quality selection of commission-free ETFs and transaction-fee free mutual funds.
Open a new account with $3,000 or more and trade commission-free for 60 days, plus get a cash bonus on larger deposit amounts: $600 on $250,000+; $300 on $100,000 to $249,999; and $100 on $25,000 to $99,999.
TD Ameritrade at a glance
|Account Fees||$75 outgoing transfer fee|
|Mutual Funds||Over 2,000 transaction-fee free mutual funds|
|Commission-Free ETFs||Over 100|
|Options||$9.99 + $0.75 per contract|
|Broker-Assisted Trades||$34.99 for interactive voice response phone system; $44.99 for broker-assisted trades|
|Research and Data||Free and extensive|
|Customer Service||Phone service and support 24/7; email support and live chat; 126 local branches|
Where TD Ameritrade shines
ETF selection: TD Ameritrade’s offering of over 100 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 — many of the equity ETFs carry ratios under 0.25%, with several Vanguard offerings coming in at 0.1% or less. (For comparison, the average ETF expense ratio is around 0.44%.) 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.
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 platform: 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.
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 here can easily be worth it. For more, check out our TD Ameritrade fees deep-dive.
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 side 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 higher-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.
To compare TD Ameritrade to other online brokers based on the specific criteria that matters most to you, use NerdWallet’s Online Brokerage Comparison Tool.
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