TD Ameritrade 2018 Review – Cash Bonus and Free Trades

Review of: TD Ameritrade
TD Ameritrade

Reviewed by:
Rating:
4.5
On May 24, 2018
Last modified:September 5, 2018

Summary:

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

You can’t beat a cash bonus and free trades, right? We’ll cover that and more in our TD Ameritrade Review.

TD Ameritrade is one of the largest and most diverse investment platforms in the industry. It provides the full range of self-directed trading, along with managed portfolio options if that’s your choice.

It may be the perfect brokerage firm if you’re looking to combine both self-directed investing and professional portfolio management. In addition, TD Ameritrade also has its banking affiliate–TD Bank–giving you an opportunity to bank with the same institution you invest with. TD Bank has more than 1,200 branches, most open seven days a week.

TD Ameritrade 2018 Review

About TD Ameritrade

TD Ameritrade was founded in 1971, which makes it about middle-aged as large investment brokerage firms go. The investment firm is based in Omaha, Nebraska, but the company has its origins in Toronto Dominion Bank, which is the source of the abbreviation “TD.”

Since its founding, it has grown to be one of the largest investment brokerage firms in the industry. As of September, 2017, TD Ameritrade has over 11 million customer accounts, with more than $1.1 trillion in assets under management. It functions primarily as an online trading platform for self-directed investors. But it also offers managed portfolio options.

Table of Contents

Investing with TD Ameritrade Self-directed Brokerage Services

One of the biggest advantages of investing with TD Ameritrade is the size of the organization, and all the options and tools it puts at the investor’s disposal. Here are some of the highlights:

Accounts Available

Individual and joint taxable accounts; traditional, Roth, rollover, SIMPLE and SEP IRAs; Solo 401(k) plans; trusts, annuities, and custodial accounts; Coverdell ESAs and 529 accounts.

Minimum Initial Investment Required

$0, which is perfect for new and small investors.

Customer service

Available 24 hours a day, seven days per week, by phone, live chat, email and text. TD Ameritrade also offers more than 360 branch locations in major metropolitan areas, if you prefer face-to-face contact.

Trading fees

TD Ameritrade trading fees are about average compared to other online discount brokerage firms. Their fee schedule looks like this:

  • Stocks and ETFs: $6.95 per trade
  • Options: $6.95 per trade, plus $0.75 per contract
  • Mutual funds: Free for load funds, $49.99 for no-load funds
  • US Treasury securities: $25 flat fee
  • Bonds and certificates of deposit: On net yield basis
  • Futures and options on futures: $2.25 fee per contract, plus exchange and regulatory fees

Be aware that these are the trading fees for online transactions. They’re higher on assisted trades. For example, broker-assisted trades are $44.99 per trade, while trades conducted on the interactive voice response (IVR) system are $34.99 per trade.

FOREX Currency Trading

You can trade over 70 different currency pairs. Currency pairs trades in increments of 10,000 units (without the “#” symbol) are commission-free. (TD Ameritrade earns its fee on the spread.)

Currency pairs trades in increments of 1,000 units are subject to a commission of $0.10 per 1,000 units, with a minimum fee of $1.

Maximum leverage on Forex trades is 50:1 on major currency pairs, and 20:1 on exotic currency pairs.

TD Ameritrade Current Promotion Offer

To attract investors, TD Ameritrade is offering a promotion worth up to $600 if you open a self-directed brokerage account. The offer is tiered based on the amount of your deposit. It can include 60 days of commission-free trades, a cash bonus, or a combination of both.

TD Ameritrade Promotions

TD Ameritrade Investing Tools and Features

TD Ameritrade’s self-directed investment brokerage platform provides tools and features for investors at every level of experience. Some of the more interesting ones include:

Overnight Trading

TD Ameritrade offers what they refer to as “24/5” trading. That means you can trade 24 hours a day, during regular business days, excluding holidays.

TD Ameritrade “thinkorswim”

This feature offers professional level trading technology, elite tools and insight generation. It provides streaming real-time data, customizable charts, and integrated one-click trading.

TD Ameritrade paperMoney

This is a virtual trading account, that lets you test trading strategies before committing real money. It provides you with a virtual margin account and a virtual IRA, each funded with “$100,000”.

Advanced Trading

This feature enables you to set rules to automatically trigger orders to help you manage risk. The feature is available for equities, ETFs, options, futures, Forex, and options on futures.

Investor Education Tools

TD Ameritrade offers a wealth of educational resources. This includes SwimLessons, instructional webcasts by former floor traders. You can check in every day to learn new technology tips and tricks to enhance your trading strategies. They also offer The Learning Center, providing tutorials, demos and how-tos to help you learn the ins and outs of the TD Ameritrade trading platform.

Technical Analysis

TD Ameritrade gives you access to more than 400 technical studies, ranging from resistance to candlestick and profile. You can also customize your charts by adding visuals, as well as build your own algorithms.

Mobile Trader App

TD Ameritrade’s Mobile Trader App is optimized for iPad, iPhone, Apple Watch and Android smartphones and tablets. It offers the same features that are available on the desktop version, including analyzing trends, monitoring your positions, viewing real-time streaming quotes, and providing access to charts and technical analysis. You can even transfer cash to and from other accounts, as well as make free check deposits of up to $10,000 from your mobile device.

Now let’s take a look at TD Ameritrade’s managed portfolio options.

TD Ameritrade Essential Portfolios

Essential Portfolios is TD Ameritrade’s robo-advisor platform. If you’re not familiar with robo-advisors, they’re professionally managed low-cost, online, automated investing platforms. A portfolio is designed for you, based on your investment goals, time horizon and risk tolerance. The portfolio is periodically rebalanced to maintain target allocations.

Your only responsibility in the mix is to fund your account. It’s perfect for investors who want a well-diversified investment portfolio, but either lack the expertise, the time or the willingness to go the self-directed route.
TD Ameritrade Essential Portfolios offers the following features:

  • Minimum initial investment: $5,000
  • Accounts available: Individual and joint taxable accounts, trusts and traditional, Roth, rollover, SIMPLE and SEP IRAs
  • Dividend reinvestment: Not provided; instead, dividends are swept into a cash account to assist with portfolio rebalancing
  • Tax-loss harvesting: Available on all taxable accounts
  • Advisory fees: 0.30% of assets under management

TD Ameritrade Essential Portfolios Investment Allocation

Essential Portfolios is managed through TD Ameritrade Investment Management, LLC. There are five different portfolio types, Conservative, Moderate, Moderate Growth, Growth and Aggressive. Each portfolio includes varying degrees of the following six asset classes:

  • US Equity
  • International Developed Equity
  • Emerging Markets Equity
  • US Bonds
  • Non-US Bonds
  • Cash

Each asset allocation is represented by one or more low-cost ETF’s. The funds are recommended by Morningstar, and are comprised primarily of those offered by Vanguard or BlackRock iShares. The portfolios do not use any of TD Ameritrade’s own proprietary funds.

The asset allocation for each portfolio is currently as follows (as of May 2018):

Asset Class
Conservative
Moderate
Moderate Growth
Growth
Aggressive
US Equity
13%
22%
29%
41%
51%
International Developed Equity
5%
9%
12%
18%
22%
Emerging Markets Equity
3%
5%
6%
9%
11%
US Bonds
70%
56%
46%
27%
13%
Non-US Bonds
8%
7%
6%
4%
2%
Cash
1%
1%
1%
1%
1%

TD Ameritrade doesn’t disclose the specific ETFs used to create each of the five portfolios. But unlike most robo-advisors, they do disclose the annual performance of each portfolio. You can find that information on the TD Ameritrade Essential Portfolios Performance Page.

TD Ameritrade Selective Portfolios

TD Ameritrade Selective Portfolios is a hybrid managed investment portfolio. When you participate in this portfolio, you have the option to work with a financial consultant, or you can select a portfolio that’s consistent with your investment goals, time horizon and risk tolerance.

TD Ameritrade Selective Portfolios offer the following features:

  • Minimum initial investment: $25,000
  • Accounts available: Individual and joint taxable accounts, trusts and traditional, Roth, rollover, SIMPLE and SEP IRAs
  • Dividend reinvestment: Not provided; instead, dividends are swept into a cash account to assist with portfolio rebalancing
  • Tax-loss harvesting: Available on all taxable accounts
  • Advisory fees: 0.75% to 1.25% for the first $100,000

TD Ameritrade Selective Portfolios is actually comprised of four different portfolios:

  • Core Portfolios (Core ETFs and Core Mutual Funds): A diversified portfolio made up of both mutual funds and ETF’s
  • Supplemental Income Portfolios: Invested primarily in fixed income assets, with limited exposure to equities
  • Opportunistic Portfolios: For investors who seek a tactical investment approach that seeks to exploit opportunities in changing market conditions
  • Managed Risk Portfolios: Designed to produce moderate and consistent returns with low volatility

Each portfolio may also have a different allocation, depending upon your needs as the investor. For example, the Supplemental Income Portfolios have Conservative and Moderate allocations. The Conservative allocation has no exposure to equities, while the Moderate portfolio contains 17% equities.

By contrast, Opportunistic Portfolios offer only Moderate Growth and Aggressive portfolio options. Both allocations are invested primarily in equities, both domestic and international.

In the same manner as Essential Portfolios, TD Ameritrade provides investment results on the Selective Portfolios Performance Page.

Investments resaults

Again, while TD Ameritrade does provide the asset allocations for each of the Selective Portfolios, they don’t provide the specific ETF’s and mutual funds that are used to represent those allocations.

TD Bank

One of the major advantages of working with a large, well-diversified financial institution is the availability of related services. If you open an account with TD Ameritrade, whether it’s for self-directed investing or for managed portfolio options, you will also have access to banking services through TD Bank.

TD Bank provides all the services you would expect out of a full-service bank. What’s more, they not only offer personal banking, but also both small business banking and commercial banking. If you’re self-employed, that will give you access to business loans and lines of credit, merchant solutions, payroll services and even a small business resource center.

For personal banking, TD Bank offers online banking, digital wallets and bill pay. In addition to checking and savings accounts, money markets and certificates of deposit, they also provide a full range of loan services that includes mortgages, home equity loans and lines, personal loans and credit cards.

TD Bank has more than 1,200 locations in 15 states in the eastern US. Branch operations are available from Maine to Florida. What’s more, TD Ameritrade has pioneered weekend banking. At most branches, they’re open on both Saturdays and Sundays. In addition, many branches also provide a financial consultant, who can help you with your investments.

TD Ameritrade Pros and Cons

TD Ameritrade Pros:

  • TD Ameritrade provides you the choice of self-directed investing, managed investing, or a combination of both.
  • Self-directed investing has no minimum initial investment, which is perfect for new and small investors.
  • The wealth of tools and educational resources makes the platform suitable for all investment experience levels.
  • 24/7 customer service availability.
  • The additional availability of more than 360 local branches, as well as more than 1,200 bank branch locations.
  • Tax-loss harvesting is available on all taxable accounts. There is no account minimum balance to qualify.
  • You can bank where you invest, through TD bank.

TD Ameritrade Cons:

  • Fees. TD Ameritrade isn’t the absolute least expensive investment platform, either for self-directed investing or for managed portfolios. It’s basic trading fee of $6.95 per trade is in the middle of the range. The Essential Portfolios advisory fee of 0.30% is slightly high for robo-advisors. The maximum fee of 1.25% on Selective Portfolios comes close to that charged by traditional investment managers.
  • The minimum initial investments of $5,000 for Essential Portfolios and $25,000 for Selective Portfolios will be prohibitive for new and small investors.
  • TD Ameritrade does not offer automatic reinvestment of dividends, though this does essentially happen through the rebalancing process.

Should You Open an Account with TD Ameritrade?

Considering all its advantages, and despite the cons, TD Ameritrade is one of the best overall investment platforms in the industry. They offer full-service investment capability, and discount broker price levels.

The ability to shift back and forth between self-directed investing and managed options–or to maintain both–is a major advantage. So is the tie-in with TD Bank, enabling investors to bank with the same company you invest with. The availability of hundreds of branches, in combination with 24/7 customer service is another major advantage. And let’s not forget about that promotion offer for new accounts.

If you’re looking for an investment platform that provides the widest range of services and features, at a reasonable price, TD Ameritrade needs to be considered.

For more information and to open up an account, check out TDAmeritrade.com.

Topics: Investing
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