TD Ameritrade is a one-stop discount broker for every kind of investor. Just getting started buying stocks? Shopping for mutual funds or ETFs for your first IRA? Seeking an amped-up investing platform for options trading or to get into futures and commodities? TD’s got you covered.
Standout features include the broker’s $0 minimum balance requirement; extensive — and free — research; portfolio-building guidance, and choice of three trading platforms. Active traders will appreciate the broker’s well-regarded thinkorswim platform but may be turned off by the $6.95 trade commission for stocks and ETFs. For investors who trade less frequently, shelling out a few bucks more for trading commissions is a small price to pay for everything else TD Ameritrade offers.
TD Ameritrade is best for:
- Beginner investors
- Advanced traders
- Investor education/advice
TD Ameritrade at a glance
|Stock trading costs||$6.95|
|Options trades||$6.95 + $0.75 per contract
|Account fees (annual, transfer, closing, inactivity)||No annual or inactivity fee; $75 outgoing transfer fee|
|Trading platform||Three robust platforms: TD Ameritrade.com and Trade Architect (web-based) and thinkorswim (desktop) accessible to all customers|
|Mobile app||Two apps corresponding to broker's trading platforms offering much of the same functionality|
|Mutual funds||More than 4,000 no-transaction-fee mutual funds|
|Commission-free ETFs||Nearly 300 commission-free ETFs
|Research and data||Free and extensive|
|Tradable securities||• Stocks
• Mutual funds
|Customer support||Phone service and support 24/7; email, text, Facebook Messenger chat support; local branches will more than double (to 360-plus) when merger with Scottrade is complete|
|Promotion||Cash bonuses ranging from $100 (for deposits of $25,000 to $99,999), to $600 (for deposits of $250,000 or more)|
Where TD Ameritrade shines
Account minimum: TD Ameritrade’s $0 account minimum for IRAs and taxable brokerage accounts makes it easy for anyone to start investing — and it’s much lower than the $500 to $2,500 many brokerages require. Unlike some deep discount brokers, TD doesn’t use its low minimum as an excuse to charge account inactivity fees or limit access to research and tools to only those with high-dollar portfolios.
Tradable securities: TD Ameritrade handily earned all five of its stars in the investment selection category. In addition to offering the full range of investments (including futures and forex), the broker equals Charles Schwab with its nearly 300 commission-free ETFs and more than 4,000 no-transaction-fee mutual funds.
Investor education/customer support: This is one of the reasons we also ranked TD high on our list of best brokers for beginners. The broker provides an entire investing curriculum on its website. Select a skill level — rookie, scholar or guru — and TD points to appropriate educational and research resources. Content is served in multiple formats, including videos, articles, slideshows and quizzes (much of it provided by investing education stalwart Investools) as well as ongoing live online seminars and presentations. TD keeps track of your progress and awards points and virtual trophies along the learning journey.
Another plus on the support side comes courtesy of TD Ameritrade’s acquisition of Scottrade. When the deal is completely sealed (toward the beginning of 2018), the broker will have more than 300 branch offices where customers can get face-to-face, one-on-one assistance.
Free research: If you’re ready to roll up your sleeves and dive into data, TD Ameritrade offers streaming news from Zacks, Dow Jones, Briefing.com and others; analysis from Market Edge, Credit Suisse, CFRA and Vickers; market heat maps and real-time streaming quotes. And it’s all completely free for customers using any of TD’s trading platforms. (Be sure to check out the website’s tool demos to get the most out of the offerings.) The brokerage also has a social community called myTrade, where clients can bat around ideas and trading strategies with other investors.
Choice of trading platforms: TD Ameritrade offers three trading platforms:
Web platform: TDAmeritrade.com is the on-ramp platform for new investors. There’s a lot of information to take in, and navigating the site can be a challenge, so take your time and make liberal use of the “Ask Ted” feature (Ted is a chatbot who’s good at providing directions). One standout feature is the Portfolio Planner tool, which helps users create a target asset allocation plan to assemble a properly balanced portfolio of stocks, ETFs, mutual funds and bonds. Investors can build a customized model or pick a pre-built one and use it to analyze a current portfolio or create a new one by determining which assets (including stocks and mutual funds) are the best fit for the strategy. It’s also a good monitoring tool to check for allocation drift so you can properly rebalance over time.
Trade Architect: A step up in sophistication, Trade Architect’s trading tools, research and real-time features — including news, quotes and market heat maps — are designed for more active stock traders and options investors. The web-based platform is refreshingly streamlined yet offers customized charting, 30 stock and option screeners, and option trading tools such as probability analysis, profit/loss graphs and target zone tools.
Thinkorswim: This is a desktop trading platform for serious stock, ETF, options, futures and forex traders. It has all of Trade Architect’s features, as well as advanced trading capabilities, a robust lineup of technical analysis tools and studies, customizable screeners, backtesting capabilities and the ability to test strategies and practice trading with a mock account called paperMoney.
Mobile trading: Offering investors a choice of platforms extends to the broker’s mobile products. There are two apps — TD Ameritrade Mobile with the functionality of the web-based platform, and TD Ameritrade Mobile Trader for Trade Architect and thinkorswim traders. Both feature much of the same functionality as their platform counterparts, although users may need to install both to get the full suite of services.
Where TD Ameritrade falls short
Trade commissions: Our biggest knock against TD Ameritrade is its trading costs. The broker’s $6.95 commission rate for stocks and ETFs (and $6.95 base rate plus $0.75 per contract for options trading) make it one of the pricier choices among discount brokers, especially when compared to other big-name brokers like Fidelity and Charles Schwab, which charge just $4.95. Free access to TD’s premium research, data, analysis and multiple trading platforms may make paying a premium commission worthwhile for many investors, however.
Broker-assisted trades: Similarly, TD Ameritrade’s $44.99 broker-assisted trade commission is more expensive than most firms’, which often cost between $25 and $35. Customers can slash $10 off the cost if they forgo human help and place a trade via TD’s interactive voice response phone system.
ETF and mutual fund short-term trading fees: In the “there is no free lunch” vein, it’s good to remember that buying an ETF from a broker’s commission-free list requires making a commitment. At TD Ameritrade, investors must hold any of the broker’s nearly 300 commission-free ETFs for at least 30 days. Anything less and you’ll have to shell out a fairly steep $19.99 short-term trading fee. (Also note that TD Ameritrade’s short-term redemption fee on almost all of its mutual funds traded within 90 days or less is $49.99.)
The bottom line
TD Ameritrade covers all of the bases and does it very well. Investors can receive portfolio-building guidance, a thorough education in investing, access to high-quality research, trading tools, a wide selection of commission-free ETFs and no-transaction-fee mutual funds, and the choice of three platforms all under one roof. That these features are all free — and the broker has a $0 minimum deposit requirement — helped TD earn some of the highest marks in our discount broker reviews.