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 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.
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:
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.
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.
TD Ameritrade trading fees are about average compared to other online discount brokerage firms. Their fee schedule looks like this:
- Stocks and ETFs: $0 per trade
- Options: $0 per trade, plus $0.65 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 $25 per trade, while trades conducted on the interactive voice response (IVR) system are $5 per trade.
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.
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.
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:
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”.
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.
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.
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:
- Fees. TD Ameritrade is the absolute least expensive investment platform, either for self-directed investing or for managed portfolios. It’s basic trading fee of $0 per trade is obviously as good as you’ll find anywhere.
- 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:
- TD Ameritrade does not offer automatic reinvestment of dividends, though this does essentially happen through the rebalancing process.
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.