TD Ameritrade Review 2020: Pros, Cons and How It Compares

Since eliminating commissions, TD Ameritrade is tough to beat, having already stood out for its $0 minimum, free tools and research and multiple trading platforms.

Arielle O'SheaSeptember 24, 2020

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Our Take

5.0

NerdWallet rating 

The bottom line: TD Ameritrade meets the needs of both active traders and beginner investors with quality trading platforms, $0 commissions on online stock, options and ETF trades and a large selection of mutual funds.

Best Broker for Stock Trading Platform and Research

TD Ameritrade

on TD Ameritrade's website

on TD Ameritrade's website

Fees

$0

per trade

Account Minimum

$0

Promotion

None

no promotion available at this time

Pros & Cons

Pros

  • Commission-free stock, ETF and options trades.

  • Free research.

  • High-quality trading platforms.

  • No account minimum.

  • Good customer support.

  • Large investment selection.

Cons

  • Costly broker-assisted trades.

Compare to Other Advisors

TD Ameritrade
Interactive Brokers IBKR Lite
SoFi Active Investing
Fees

$0

per trade

Fees

$0

per trade

Fees

$0

per trade

Account Minimum

$0

Account Minimum

$0

Account Minimum

$0

Promotion

None

no promotion available at this time

Promotion

None

no promotion available at this time

Promotion

Free

career counseling plus loan discounts with qualifying deposit

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Full Review

TD Ameritrade requires a $0 minimum investment and delivers standout features, including extensive — and free — research and data, portfolio-building guidance, $0 commissions for stock, options and exchange-traded fund trades and nearly 300 branches for in-person customer support. Investors have a choice of four trading platforms.

In November 2019, Charles Schwab announced its acquisition of TD Ameritrade. The deal is expected to close at the end of this year. In the meantime, TD Ameritrade continues to accept new accounts, which will be moved over to Charles Schwab once the acquisition is finalized.

TD Ameritrade is best for:

  • Beginner investors.

  • Advanced traders.

  • Investor education/advice.

  • Commission-free trades.

  • Fund investors.

TD Ameritrade at a glance

Account minimum

$0

Stock trading costs

$0

Options trades

No base commission; $0.65 per contract.

Account fees (annual, transfer, closing, inactivity)

No annual or inactivity fee. $75 full transfer; $0 partial transfer.

Commission-free ETFs

All ETFs trade commission-free.

Number of no-transaction-fee mutual funds

More than 4,100.

Tradable securities

• Stocks. • Bonds. • Mutual funds. • ETFs. • Options. • Futures. • Forex. • Foreign ADRs. • IPOs for qualified accounts.

Trading platform

Two platforms: TD Ameritrade web and thinkorswim (desktop).

Mobile app

TD Ameritrade mobile web, TD Ameritrade Mobile (iOS only), TDA Mobile Trader (companion to thinkorswim platform).

Research and data

Free and extensive.

Customer support options (includes website transparency)

Phone support 24/7; technical phone support Monday - Friday, 7 a.m. to 6 p.m. Eastern. 364 local branches. Support also available via text, Facebook Messenger, Twitter direct message, Apple Business Chat and Amazon Alexa.

Promotion

None.

Where TD Ameritrade shines

Commission-free trades: In 2019, TD Ameritrade dropped its trading commission — which, at $6.95, was considered high compared with other discount brokers — and introduced free online stock, ETF and options trades. Note that options trades still come with a per-contract fee of $0.65, which is typical at brokers.

Tradable securities: TD Ameritrade aces the investment selection category by offering the full range of investments, including futures and forex and bitcoin futures trading for approved clients.

As for the less exotic stuff, the broker's selection of over 4,000 no-transaction-fee mutual funds is equal to or exceeds what's offered at other big-name brokers like Charles Schwab and Fidelity.

TD Ameritrade also excels at offering low-cost and low-minimum funds, with over 11,000 mutual funds on its platform with expense ratios of 0.50% or less, and over 10,000 with investment minimums of $100 or less. It's an ideal broker for beginner fund investors.

Investor education/support: To say that the broker's digital educational offerings are abundant is putting it mildly. There's so much available in every format — videos, articles, slideshows and quizzes, as well as ongoing live online seminars and in-branch presentations — it's hard to know where to start. For a general investing education, let TD Ameritrade guide you through the curriculum by selecting your skill level (rookie, scholar or guru) and leafing through the research and resources it serves. For more specific guidance, there's the "Ask Ted" feature. "Ted" is a chatbot who's good at providing directions to all of the broker's investing tools, tutorials, key data and whatever else pops into mind.

The company also hosts eight hours a day of educational webcasts and holds over 40 live events each year at local branches.

Virtual trading simulator: Surprisingly few online brokers offer mock trading accounts on their platforms. TD Ameritrade is one of them. Its paperMoney virtual simulator is a desktop-based platform geared toward advanced and frequent traders. It provides $100,000 in practice "money" along with access to a margin account. It's available for free through the broker's two platforms and its Mobile Trader app, although non-customers can register for a free 60-day trial — a good way to test a new platform before committing to setting up a real-money account.

Choice of trading platforms: TD Ameritrade offers two main trading platforms, each with a corresponding mobile version.

TDAmeritrade.com is the on-ramp platform that offers pretty much everything an average investor needs to identify, research, screen and trade stocks, funds, bonds and CDs and options. Baked into the free platform are:

  • Research from Morningstar, Thomson Reuters, CRFA (formerly S&P Capital IQ) and TD Ameritrade's own financial pros.

  • Screeners.

  • A customizable landing page.

  • The broker's GainsKeeper tool, to track capital gains and losses for tax season.

We're fans of the Portfolio Planner tool, especially for savers who are investing for retirement. It helps users create a target asset allocation plan to assemble a properly balanced portfolio of stocks, ETFs, mutual funds and bonds. Investors can either build a customized model or pick a prebuilt one and use it to analyze a current portfolio or create a new one. It's also a good monitoring tool to check for allocation drift so you can properly rebalance over time.

Separately, the company has a desktop trading platform called thinkorswim that's aimed at serious stock, ETF, options, futures and forex traders. It has all the features active traders need, including advanced trading capabilities, a robust lineup of technical analysis tools and studies, customizable screeners and charting, backtesting capabilities, real-time news, quotes, market heat maps and more.

Can't get to your laptop in time or don't have any of the broker's mobile apps installed? You can also place any code-red, emergency trades through third-party platforms via Twitter Direct Messages, Facebook Messenger and Apple Business Chat. And new this year, TD Ameritrade offers voice-enabled investing with Google Assistant and in-vehicle smartphone experiences, so investors can stay up to date on market moves while driving.

Mobile trading: The choice of platforms extends to the broker's mobile products. TD Ameritrade Mobile (iOS only) is a companion to the desktop platform and TD Ameritrade Mobile Trader is aimed at the advanced trading crowd and is a companion app to the thinkorswim platform. The company also has TD Ameritrade Mobile Web, the browser-based platform optimized for mobile devices.

TD Ameritrade Mobile has much of the trading functionality of the web-based platform and also provides Level II quotes (not available on the web platform). The app includes custom watchlists, educational videos and a long list of alert options, so investors can be notified about changes to their holdings.

TD Ameritrade Mobile Trader includes futures and forex trading, complex option ordering capabilities (three or four legs) and chat support from TD's trading desk. Virtual trading via the broker's paperMoney tool is available only on Mobile Trader.

The company also has the TD Ameritrade Portfolios app, which is for managed portfolio clients to monitor their investments. For more on TD's robo-advisory service, see our review of TD Ameritrade Essential Portfolios.

Where TD Ameritrade falls short

Broker-assisted trade fee: TD Ameritrade's $44.99 broker-assisted trade fee is high relative to the competition — a more typical charge is in the $20 to $30 range.

The bottom line

TD Ameritrade is a rare broker that covers all of the bases and does it very well. For a broker with no commission on stock, ETF and options trades, clients get an impressive list of services including portfolio-building guidance, hands-on investing courses, high-quality research, trading tools and a wide selection of no-transaction-fee mutual funds. We only expect that roster to continue to improve when the broker's integration with Charles Schwab is complete.

» Want more options? See our best online brokers for stock trading

Dayana Yochim contributed to this review.

on TD Ameritrade's website