TD Ameritrade Review – A Canadian Spin on the US Market

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Review of: TD Ameritrade
TD Ameritrade

Reviewed by:
Rating:
4.5
On October 11, 2011
Last modified:December 6, 2012

Summary:

TD Ameritrade offers low cost trading, excellent research tools, 500 free trades, and up to $600 bonus.

It’s been a while since I’ve seen Sam Waterston (who you might know as district attorney Jack McCoy on Law and Order) promote TD Ameritrade in television commercials. But after years of wondering whether or not they are a top notch online discount broker, I decided to give them a shot.  Oddly enough, I learned in writing this review that the “TD” in TD Ameritrade stands for “Toronto Dominion” so we actually have a Canadian Bank with an American twist.

Opening a TD Ameritrade Account

I wish I could tell you something invigorating happened while I was opening up my new TD Ameritrade account, but I cannot. The process took a total of 15 minutes and required all of the usual information like name, contact information, employment information and your banking information (should you choose to make your initial deposit via e-Check).

The only different part about opening an account with TD Ameritrade was what to do with cash not invested.  I had the choice of opening a TD Ameritrade deposit account where my cash would earn interest or simply keeping my cash in the brokerage account where it would not earn interest.  I chose the latter because I don’t expect to keep cash lying around my brokerage account.  I’ll deposit cash to invest it or immediately withdraw money when I sell.

Trading Tools and Technology

Experienced investors may be familiar with one of the platforms used by TD Ameritrade. As I login to my account, I see that I can download thinkorswim from TD Ameritrade. Thinkorswim was actually its own trading platform before TD Ameritrade acquired it, and it’s now been fully integrated with all TD Ameritrade members.

thinkorswim

Thinkorswim users can access professional-level tools for serious traders, which I would one day like to be.  You’ll get streaming real-time data, customizable charts, integrated one-click trading and all of the features below.

  • Trade analysis with volatility and probability tools
  • Advanced charts with studies
  • Real-time performance and risk monitoring
  • Backtesting
  • Anytime paper trading in past markets through thinkOnDemand
  • Active trader interface with time and sales
  • Live-streaming CNBC Plus

Trade Architect

For those feeling frisky enough to use the somewhat newly integrated platform provided by TD Ameritrade, a second option presents itself in the form of Trade Architect.  The beauty of this platform lies with its features and its costs.  Unlike other brokerage houses, the following services come 100% free to all traders:

  1. Streaming News
  2. NASDAQ level II quotes
  3. Trading specialists

Free Trades & $600 Bonus

For a limited time only, investors who open up a new (meaning no previous ties to TD Ameritrade) trading account are eligible to receive 60 days of commission free trading with up-to a $600 cash bonus.  Commission free trades are limited to 500 for every new account holder, provided after a $2,000 initial deposit and the account must remain open for a minimum of nine months, or the free trades made will be voided.  The cash bonus every new TD Ameritrade member receives depends on how much the initial deposit is.  The breakdown is as follows:

  • $600 Cash Bonus – Over $250,000 initial fund
  • $300 Cash Bonus – $100,000 – $249,999 initial fund
  • $100 Cash Bonus – $25,000 – $99,999 initial fund

TD Ameritrade Mobile Apps

iPhone App (Above Left) & Android App (Above Right)I can’t even imagine trading thousands of shares using an iPhone, but if you like the comfort of your handheld device, TD Ameritrade can make it happen.  Using the iPhone or Android will allow you to:

  • Set text and alert emails so you never miss your price
  • Access real-time quotes for any stock or fund
  • Trade with a virtual currency (Paper Trade) if you need the practice before diving in to a real cash account
  • Execute trades on  stocks, exchange-traded funds (ETFs) and enter multi-leg options orders

Commission Structure

If there’s one reason why a guy like me wouldn’t use TD Ameritrade as frequently as possible, it’s the commission structure.  I would classify myself as an infrequent, inexperienced trader who doesn’t want to pay a little extra for a little more in terms of trading freedoms and technology.   I like spending under $5 for any stock trade I make (TradeKing, Zecco, OptionsHouse).

But depending on the type of trader you are, you may find value in the prices offered by TD Ameritrade.  I’ve listed a current table of all commission costs.

Trade Type
Internet Cost
Interactive Voice Response Cost
Broker Assisted Cost
Stocks
$9.99
$34.99
$44.99
ETF's
$9.99
$34.99
$44.99
No Load Mutual Funds
$49.99
$49.99
$49.99
Options
$9.99 + $0.75 per contract
$34.99 + $0.75 per contract
$44.99 + $0.75 per contract

The Bottom Line

So after everything you see above, the $64,000 question is whether or not TD Ameritrade is the right broker for you.  I can’t really answer that question, but I can tell you these guys have everything any trader will ever need to be successful.   Your money is 100% secure, you have amazing tools to analyze trends and potential outcomes and mobile options if you’re on the road.  Truth be told though, I could probably say that for almost any online discount broker I’ve reviewed in the last five years, so ultimately it comes down to loyalties, preferences and effective marketing.

I’ll be keeping my TD Ameritrade trading account active for a while making an occasional trade, but the majority of my investing will be made elsewhere, as I prefer a $3.95 per trade cost rather than a $9.95 per trade cost.  I’ll give these guys every opportunity to blow me away with excellent customer service and better trading tools.

Published or Updated: December 6, 2012

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