TD Ameritrade Review
TD Ameritrade was on every broker’s dart-board in 2019. Their competitive fees, account and investment options, and creative and diverse research & education platforms all combine to create an almost-ideal broker, and certainly one of the best in our eyes.
In October 2019, TD Ameritrade joined competitors in their bid to remain competitive by announcing they were going commission-free. Traders everywhere rejoiced and things were looking good for the broker on the outside.
Not surprisingly, TD Ameritrade’s stock price dropped 25% following the news as shareholders anticipated a decline in profits. Shortly thereafter, Charles Schwab jumped on the opportunity, announcing that it would acquire TD Ameritrade in a $26 billion deal that will reshape the business along with the greater stock brokerage industry.
- Account Minimum: $0
- Fees: $0
- Best for: Experienced & Beginners
- Highlight: Free and Extensive Research & Data
- Portfolio Analysis: 10/10
- Education: 10/10
- Commissions & Fees: 9/10
- Usability: 9.5/10
- Customer Serve and Help: 9.5/10
- Account Options: 8/10
- Overall: 9.5/10
Investor Warning: Carefully consider the investment objectives, risks, charges and expenses of any investment company before investing. ETFs can entail risks similar to direct stock ownership, including market, sector, or industry risks. Some ETFs may involve international risk, currency risk, commodity risk, and interest rate risk.
What is TD Ameritrade?
TD Ameritrade is an online broker who’ve been around for over 40 years now.
The broker was born from a series of mergers and acquisitions including former subsidiaries First Omaha Securities, TD Waterhouse, Ameritrade, and their most recent, Scottrade. Each acquisition has increased the companies efficiencies and features and has helped them grow into one of the leading online brokers.
In late November 2019, it was announced that Charles Schwab acquired TD Ameritrade in a $26 billion deal. This will mean that two of the largest discount brokers are coming together to form a powerful force in the industry in the midst of a war on fees.
The past year has been as series of growth and transformation for the company as it streamlined its website and improved their educational features following the acquisition of Scottrade. Now the company will be controlled by Schwab CEO Walt Bettinger.
Overview and Summary
TD Ameritrade has several key points in 2019, we’ve rounded up their top 6:
- TD Ameritrade is an online broker that’s been around for over 40 years and have a strong history of innovation.
- In late November 2019, it was announced that Charles Schwab acquired TD Ameritrade in a $26 billion deal.
- TD Ameritrade is a leader in trading, executing around 800,000 trades per day.
- TD Ameritrade really invest in helping to educate customers. From podcasts and immersive curriculum, articles, videos and webcasts to in-person events.
- TD Ameritrade’s mobile trader has account monitors, price alerts, news and research and e-documents tabs.
- TD Ameritrade offer more than 4,100 no transaction-fee (NTF) mutual funds and their ETFs are free, too.
TD Ameritrade and Charles Schwab Merger
In late November 2019, it was announced that broker giant Charles Schwab acquired one of its biggest competitors, TD Ameritrade.
Schwab was the first in a line of companies to introduce zero-commission on stock and ETF trades. TD Ameritrade was forced to follow suit, an unfortunate situation which may have played a part in the company going to the bargaining table.
The two companies will now merge in a $26 billion all-stock deal. This will give Schwab the advantage of a 12 million increase in its client base and $1.3 trillion in client assets. Altogether, this gives the company 24 million clients accounts and more than $5 trillion in client assets.
Times They a’ Changin’: A Move Towards Accessibility
The past few years have been a race to shrinking fees and zero commissions among asset managers.
A “war on fees” has put discount brokers under pressure to move with the changing market and introduce more accessible trading for young investors. This led to a slew of announcements from brokers over the past few months that they would be introducing commission-free practices, including from TD Ameritrade.
This industry switch-up was welcomed by retail investors but came as a blow to shareholders. Commission fees have traditionally driven online trading firms. Now, with this move towards lower fees, firms are being forced to think of new ways to make money. This could result in more consolidations in the industry.
If this deal goes through, Schwab’s estimates savings of around $1.8 to $2 billion. They’ll acquire TD Ameritrade’s 12 million client base and roughly $1.3 trillion in assets, along with custodial services to over 7,000 investment advisors. An expansion that will Make their RIA division more than twice the size of their rival, Fidelity.
TD Ameritrade is a leader in trading, executing around 800,000 trades per day. The company has a history of innovation and growth since their beginning in 1975 and today its made up of a 10,000 person team. Schwab’s acquisition of TD Ameritrade therefor, will make them a serious competitor in US retail trading.
How Does TD Ameritrade Work?
TD Ameritrade offers a wide selection of investment choices, outstanding educational resources, and diverse trading platforms. The brokerage is also very easy to use — we say it’s the best online stock broker for beginners.
Getting set up with an account will only take a few minutes. Here’s what you’ll need:
- Social Security Number or Individual Identification Number (ITIN)
- Your employer name and address
You’ll then follow a quick 5 step process that will take just a couple of minutes.
- Step 1: Start your application on TD Ameritrade’s account application page
- Step 2: Enter personal information
- Step 3: Review and edit information
- Step 4: Agree to terms
- Step 5: Set up your online login
Who TD Ameritrade is Best For
TD Ameritrade is best for you if you consider yourself one of the following:
- Experienced and beginners
- No Commissions
- IRA Investors
- Forex traders
- Options traders
- Traders of pennystocks
TD Ameritrade will suit both experienced, well-polished traders and traders in their early years with a selection of trading platforms, fee-free commissions on online stock, a wide variety of mutual funds and options and ETF trades.
Variety of Trading Platforms
TD Ameritrade offer a trade ticket for quick orders and execution, similar to most brokers. It’s quick and efficient and makes sense for one-off orders. That’s why TD Ameritrade is ranked as one of the best platforms for day trading. They offer two main platforms with particularly great features, with a mobile version for each.
TD Ameritrade’s web platform at TDAmeritrade.com offers all you need to research, screen and trade stocks, bonds, ETFs mutual funds and options. Here’s what you’ll get for free:
- Research from Morningstar, Market Edge and more
- A GainsKeeper tool (tracks capital gains and losses
- Customizable landing page
Their Portfolio Planner tool is also great for those investing for retirement. You can create a target asset allocation plan to create a portfolio of ETFs, stocks, mutual funds and bonds. You have the option of choosing a premade one, customizing it yourself to look at a current portfolio or create a new one. It also allows you to monitor for allocation drift so you can rebalance in the long run. TD Ameritrade is in our top 6 future brokers and trading platforms.
Thinkorswim: Optimized Performance
TD Ameritrade’s, Thinkorswim platform is next level with forex, futures and futures option on top of tradable securities. Thinkorswim will give you access to
- Advanced trading capabilities
- Technical analysis tools
- More than 44 technical studies
- Market heat maps
This platform is a complete professional suite and would suit any experienced trader looking to optimize their performance. It’s one way in which TD Ameritrade differs from E*Trade and other competition.
PaperMoney: Virtual Trading Simulator
TD Ameritrade’s virtual trading platform paperMoney is a desktop platform most suited to advanced traders. You’ll get $100,000 in virtual money to practice with as well as a margin account to increase your buying power. Investors will get to backtest strategies and practice backtesting, access futures and foreign exchanges.
The simulator uses TD Ameritrade’s thinkorswim platform, and it’s free for customers. If you’re not a customer and would like to give it a go then you can make use of their 60-day free trial.
No Trading Commissions
In October 2019, TD Ameritrade were one of several top online brokers to introduce zero-fee commissions for stock, ETFs and options trades. Their original price was a steep $6.95, so this is yet another example of the pressure brokers felt under to remain competitive.
Where TD Ameritrade Shine
Trade-ucation: An Immersive Curriculum & Ask Ted
TD Ameritrade really invest in helping to educate their customers. From podcasts and immersive curriculum, articles, videos and webcasts to in-person events and a TD Ameritrade Network, they have everything laid out in a clear and easy format.
Not only that, but the company understands that everyone needs different information for their needs, and overpiling information on anyone, just won’t work. That’s why they create experiences that are fully customised to suit your interests and goals.
If you want a general investing education, then TD Ameritrade can guide your through by first selecting your skill level and then looking at the research and resources to help.
Here are some of the highlights of their education:
A fully immersive curriculum
You’ll have experienced coaches to walk you through a range of investing and trading topics to help you make more informed decisions. All their immersive coaches can in done in your own time.
Articles & videos
TD Ameritrade have a huge catalog of over 200 instructional tutorials, videos and investing publications.
You can watch webcasts to your heart’s content. If you prefer to learn by listening or even just to help you along on your journey then you’ll have access to webcasts on active trading, long-term investing, portfolio management and market commentary
TD Ameritrade Network
This network will give you strategy tips into current market events from industry experts.
The company’s events on investing and trading are a great opportunity for you to learn and grow your network.
TD Ameritrade’s customer support is helpful, easy to get a hold of, and always on hand to help guide you through your journey. You can chat with a friendly team member on the brokers Mobile Trader app, but if you’d like to meet with someone, the broker welcome clients to visit one of their 360 branches around the U.S broker for a more personal chat.
If you’ve ever wanted an immediate answer to a hard question then TD Ameritrade’s Virtual Investment Consultant, “Ted” will help you with more specific queries or guidance that you need. He’ll direct you through the tutorials, investing tools, data and anything else you need to help you make more informed decisions..
TD Ameritrade also have helplines on most social media platforms including Facebook, Twitter, Amazon’s Alexa, WeChat and Apple Business Chat for quick and easy access.
Overall, TD Ameritrade provide accessible customer support for quick, easy and informed advice or assistance.
Mobile Trading: Tap, Swipe, Trade with TD Ameritrade
TD Ameritrade’s Mobile Trader is a companion to their web platform, thinkorswim. It’s easy to use and helps you manage your accounts and investments. This is more suited to advanced traders, whereas thinkorswim is more beginner-friendly.
TD Ameritrade’s mobile trader has account monitors, price alerts, news and research and e-documents tabs. It also includes futures and forex trading, chat support and complex option ordering capabilities.
The one-two punch of user friendliness coupled with a variety of features for advanced traders and investors is why we feel that TD Ameritrade has the best stock trading app on the market today.
TD Ameritrade offers more than 4,100 no transaction-fee (NTF) mutual funds and their ETFs are free, too. That’s a great deal if your focus is on funds.
Where TD Ameritrade Fall Short
Overall, TD Ameritrade are a first class company and do well in a lot of areas, including research, education, support and fees. However, they do have a few sneaky fees that we’ll highlight below. Once you’re aware of them, you can make better, smarter decisions with your money.
Transfer Out Fee
You won’t be charged an inactivity fee at TD Ameritrade but you will incur a $75 transfer-out fee, aside from partial transfer fees, which are free.
Short-Term ETF Fees
Keep note too that ETFs require a longer term approach. Customers must hold ETFs for at least 30 days to avoid a charge of $13.90. You’ll also have to fork out a hefty $49.99 short-term redemption fee on most mutual funds traded 90 days or less.
Comparison of Brokerages
- Account min: TD Ameritrade $0, Fidelity $0 Charles Schwab, $0
- Fees: Fidelity $0, Charles Schwab $0 , TD Ameritrade $0
- Highlight: Free & extensive research and data, Charles best online broker for stock traders, Robinhood Pioneer of commission free stock
What Does This All Mean?
TD Ameritrade acquired their way to the top of the chain with their educational platform, mobile trading, and fee-free funds.
TD Ameritrade cater to beginners and more experienced investors and have a full range of services, professional and educational tools likely to meet anyone’s standards and push you forward in your investing journey.
The current market is going through a big transition, companies are fighting to keep customers and in doing so, they’re giving customers more value. This may be the best time to be on the lookout for a new broker.
Compare TD Ameritrade
Find out how TD Ameritrade stacks up against the competition.