TD Ameritrade makes discount brokerage services available for a range of investors. In the following review, we will break down the features that make a TD Ameritrade account stand apart and give you the information you need to make important investment decisions wisely.
The customer service of Ameritrade stands out. This is a company that offers researched advice and easy entry to the market – a combination unusual in a discount broker. There are no minimum account sizes and the commission prices are competitive in the industry, which makes it attractive to many investors.
It is critical to do your own research and choose a broker carefully. This is why we’ve prepared the following summary of what you need to know about TD Ameritrade.
What Ameritrade Does Well
There is stiff competition among discount brokers to distinguish themselves in the marketplace. They each have a slightly different list of offerings, but some go above and beyond in certain areas, which is why it’s important to shine a light on what stands out. Ameritrade is distinctive in a few areas, such as:
• Customer support – TD Ameritrade has support branches in most major and medium cities. There is also customer service online, by phone and by text. Even in social media. Customers can meet face-to-face with employees or speak to them at will around the clock.
• Research – With so many screeners and research options available, it’s easy to take advantage of TD Ameritrade’s research options. You can use screeners for mutual funds, options and stocks to build knowledge and confidence in your investments. You will also have access to third-party research offerings from Morningstar, Moody’s and S&P Global.
• TD Ameritrade app – You can take your trades on the go with the Ameritrade app. The company has created a highly-rated app available for Windows, Android and iOS. You will have streaming information about companies as well as the ability to make investments, buy, sell or research new investments.
• No minimums – You will not find a minimum investment at TD Ameritrade. This allows you to start a new account quickly and easily without building up a sizeable savings first or pulling from another account as a seed for a new one.
• Fund selection – There is a wide range of commission-free mutual funds and ETFs available through TD Ameritrade. Other discount houses tend to focus on just one type of investor. But Ameritrade has offers that accommodate and interest both hands-on and hands-off stockpickers in multiple areas.
Commissions with TD Ameritrade
You’ll want to know how much a brokerage firm charges. This is a key piece of information, especially as the key selling piece of a discount firm is how much they actually charge. With heavily discounted fees and commissions, investors have more options about how to buy and sell as well as options on how to grow their portfolios. TD Ameritrade provides a breakdown of commissions detailed in the following chart.
|Stocks and ETFs||Stock options||Mutual funds|
|$6.95||$6.95 + $0.75 per contract||$49.99 (thousands for free)|
A full-service broker charges considerably more than TD Ameritrade, but there are other discount traders with commission rates even less than what is listed here. The difference between TD Ameritrade and the lowest commissions on the market is $2 per trade, which many consider to be negligible or simply an investment of its own in the research capabilities TD Ameritrade provides that others don’t.
While commission rates are important considerations, they aren’t everything when it comes to choosing a brokerage house. After all, the types of investments you’re making and the frequency of those investments ultimately determines how much you’ll pay.
Fees and Refunds with TD Ameritrade
Buried in the fine print of any brokerage house you’ll find a few more fees, and TD Ameritrade is no exception. The following are the fees that are still associated with TD Ameritrade despite the reduced fee structure. Fortunately, most, if not all, of the additional fees are easy to avoid
• Short-term trading fee – If you buy a commission-free ETF, you can expect to pay no fees provided you hold that investment for thirty days. If you trade the ETF before the thirty days are up, you will be charged a short-term trading fee of $13.50. This may add up for investors who buy and sell frequently, but should have no impact on those who hold the ETFs for at least thirty days.
• ATM refunds – TD Ameritrade, like all investment houses, will send a debit card to access your accounts. When you use this debit card at a bank, you will be charged an ATM fee by that company. Fortunately, TD Ameritrade realizes this and refunds all of the bank fees charged by other institutions so you should wind up paying nothing to use your debit card at an ATM.
• Paper statements fee – You can expect to pay $2 for every paper statement that comes your way. This is an industry norm, and you can avoid this fee by either holding more than $10,000 in your investment accounts or by opting out of paper statements. You will have full access to your accounts online without the paper trail.
ETFs and Mutual Funds at Ameritrade
You won’t find mutual funds and ETFs at every discount broker. But at Ameritrade you’ll find not only a wide variety of ETF and stock options, but also thousands of options that have no commission. This is one of the largest collections of ETFs and mutual funds available in the industry, and many of them are free to buy or sell.
TD Ameritrade’s list of ETFs include big names like WisdomTree, Invesco, State Street (SPDR) and iShares. If you hold the ETF investment for at least thirty days you won’t be charged any sort of commission for the investment. If you sell before the thirty days is up, you can expect to pay a short term trading fee of $13.90, however.
In summary, you will find that TD Ameritrade offers:
• 303 commission-free ETFs
• 12,531 mutual funds overall
• 1,932 NTF (no-transaction-fee) mutual funds with no load
The TD Ameritrade Trading Platform
You will find multiple ways to access your TD Ameritrade accounts. There is a mobile app, a desktop version of the software, and a website that make accessing your account straightforward and streamlined.
The mobile platform for TD Ameritrade is an app developed across iOS, Android or Windows devices. This robust app gives you access to level II quotes, conditional orders and complex trade options as well as some research all on the go and through your preferred device. You can access the web-version of TD Ameritrade’s platform through your mobile device as well.
The internet-based platform is idea for the classic investor. On the internet, you’ll find streaming quotes, custom alerts and the sorts of research screeners that sort through market offerings and possibilities based on your customized or technical parameters.
The desktop version of TD Ameritrade’s platform is ideal for the active trader. Here you’ll find the features these traders are looking for including graphics about stock histories and potential, level II quotes and also features like backtesting.
Ameritrade Research Opportunities
While a discount broker isn’t designed to be a full-service, hold-your-hand type investment house, there are still many user-friend tools available for investors. These tools are available to help investments choose their stock, mutual fund and bond purchases wisely. With Ameritrade you’ll find proprietary and third-party research, calculators, and screeners for mutual funds and stocks.
Specifically, the tools you will find include:
• Ratings from analysts – Stocks will be rated as strong buys according to First Call Consensus. Other analyst ratings will be available and used in the platforms to showcase buy-ready stocks. These analysts include TheStreet, MarketEdge, Ford and CFRA. You’ll have easy access to a list of stocks expected to perform well.
• Screeners for ETF investments – With these screeners you’ll be able to dig deeply into the hundreds of ETFs offered to find the ones that meet very specific criteria. You can easily see results of criteria like Morningstar’s small cap values, expense ratios that are below average and investments that are commission free.
• Bonds and other fixed income reports – S&P Global and Moody’s reports are offered through Ameritrade to give customers information about the performance and expectations of bonds and other fixed-income mutual funds.
Margin Rates with TD Ameritrade
You can use a margin loan for two reasons. These loans can be used to increase your leverage in a portfolio by increasing the amount of your investment capital using borrowed money. This allows for greater gains, but also opens you up to greater risk. This is the most frequent use of margin funds, although it can be risky should the investment turn south.
The other use of margin loans is to cover the gap that occurs immediately after selling a stock. There is a two day lag between selling a stock and the funds arriving to be ready for use. A margin loan can provide immediate access to funds without waiting two days. When the funds from the sale do arrive, the loan can be paid back immediately.
These loans do come with their own costs and interest. TD Ameritrade charges interest on margin loans according to the scale of the loan. These interest rates are published by TD Ameritrade in the following table:
|Debit balance||Interest rate|
|$10,000 to $24,999||9.75%|
|$25,000 to $49,999||9.50%|
|$50,000 to $99,999||8.50%|
|$100,000 to $249,999||8.25%|
|$250,000 to $999,999||8.00%|
|$1,000,000 or more||7.25%|
These interest rates only apply if you are using margin loans, of course. If you are not using any loans in your investments, than you will not pay anything at all. Additionally, since interest is charged by the day, those who use a margin loan to cover a 48 hour gap can enjoy a low interest payment before the loan is repaid in full. Those who use margin funds extensively can expect to pay quite a bit in interest payments.
Buying Canadian Stocks with TD Ameritrade
With the new marijuana market opening up and the many other successful companies in Canada, American investors are eyeing the possibilities of investments across the border. Americans are interested in buying and selling Canadian stocks along with their own, and they want to know how to make this happen.
In some cases, a Canadian stock is already offered alongside American stocks. In this case, an investor can simply add the stock to his existing portfolio. In other cases, the investor will need to open a new Canadian account to have full access to Canadian stocks.
Opening a new brokerage account in Canada is simple with the tools and low investment limits offered by TD Ameritrade. Americans looking to make cross-border investments can do so with confidence thanks to the full suite of tools to research Canadian investments as well as the top pick options provided by trusted industry analysts.
TD Ameritrade’s Customer Service
A discount brokerage firm doesn’t offer a full-service offering. These no or low-frills companies like TD Ameritrade do still have an extensive customer service network for investors, so they may be independent, but they are not completely on their own.
TD Ameritrade provides the tools to speak with a customer service agent through email or text as well as by phone around the clock. There is also an option to speak with a representative and even arrange trades through Facebook Messenger.
Also, thanks to Ameritrade’s large office network, you can arrange a meeting in person with a representative in almost any metropolitan area. This should give you confidence that you have access to service when you need it along with the tools to research your own investments at will.
Is TD Ameritrade what you’re looking for?
Every discount broker has its own key elements. You should consider a new account with TD Ameritrade if you find the following key elements are a good fit for your investment plans.
• You prefer access to mutual funds and ETFs. With more than 2,200 no-load mutual funds without transaction fees as well as hundreds of ETFs available without commissions, you can find plenty of options to add diversity to your TD Ameritrade portfolio.
• Real customer service agents are important to you. You can find real people to talk to when questions arise with TD Ameritrade. Not only is there an office in almost every city, but you’ll also find customer service agents on the phone, by email and by text around the clock.
• You won’t be using margins. If you use margins frequently, you’ll likely be bothered by the slightly higher rates TD Ameritrade charges on margin loans. But if you don’t use margins or you use them for a couple of days at a time, these rates won’t matter a bit.
• You enjoy the possibilities of research. If you enjoy digging through the data to find the best investments, the possibilities of TD Ameritrade will suit you perfectly. The trades might be a couple of dollars more, but that is a fair trade for the comprehensive research opportunities that Ameritrade is able to provide.
Finding a Broker You Can Trust
You need to feel confident in your choice of brokerage house. It all boils down to not only how much it will cost to make trades or use loans, but also how much you trust the company to help you handle your money and investments wisely.
Reviews like this one are designed to break down critical information and make it easy to see at a glance if a company like TD Ameritrade is the right one for you.
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