TD Ameritrade

Introduction

Do you live in the US? Are you interested in investing, but find yourself overwhelmed at the number of online brokers?
If you answered yes to those questions, and especially if you’re a novice investor who’s just starting out, you owe it to yourself to at least put TD Ameritrade on your shortlist of options to consider. They’re one of the largest discount brokers in the business, and they are an especially good fit if you’re just starting out.
The company started life as a strictly US-based operation, and grew by acquisition, acquiring Scottrade, giving them more than 280 offices around the country. More recently (in late 2019), they were acquired by Charles Schwab, but it will take the two companies years to fully merge and integrate, so for the foreseeable future, TD Ameritrade continues to operate as a wholly independent entity.
They’ve also moved beyond the shores of the US, and have a growing presence in China and other parts of Asia. While the company doesn’t quite have a global footprint, they’re clearly headed in that direction.
In the sections that follow, we’ll take an in-depth look at everything TD Ameritrade has to offer, and we’ll be upfront about the platform’s shortcomings and limitations. That way, you’ll have all the information you need to make an informed decision. If that sounds good to you, read on!

Ease Of Use (4.3 stars out of 5)

This was a hard section to rank TD Ameritrade for. As is the case with almost every online broker out there, TD Ameritrade offers both a desktop and an app-based trading platform. Both are exceptionally well-designed and easy to use, which makes them very “newbie friendly” but there are a couple of catches and caveats.
For one thing, as we’ll outline in more detail later, TD Ameritrade offers a variety of tools, but the full set isn’t available on either platform, so depending on the tools you prefer, you may find yourself having to master and use both platforms. That’s not always the case, but it may be.
The other issue is that TD Ameritrade offers a number of different types of accounts and picking the right one is the first, and one of the most important decisions you’ll have to make.
Basically, it boils down to what you want to invest in. That’s the biggest determinant of what kind of account you’ll open. It matters because TD Ameritrade’s product catalog is huge, and the sheer size of the number of offerings available works against the simplicity of the platform’s design.
In addition to being delightfully easy to navigate through and use, the TD Ameritrade desktop platform features a highly customizable docking station that allows you to put the information you care most about front and center where it’s always easy to find.
The mobile platform, called “ThinkOrSwim,” features a different navigation scheme but can be customized to the Nth degree, again, allowing you to put the information you care about most at your fingertips.
Even better, the app-based platform allows you to customize your trading defaults and saves your preferences on the Cloud, so if you switch to a different mobile device, you won’t have to set everything up again.
Of interest, where most online brokers put the lion’s share of their attention into their desktop experience, leaving their app-based platform somewhat less full-featured, TD Ameritrade takes the opposite approach. You’ll find that the app-based experience is more feature-rich.
All order types (including conditional orders, one-cancels-another, etc.) are available on both the desktop and app-based platforms, and quick buy buttons are always readily available, making the system incredibly easy to use. Both platforms even allow you to set account-wide defaults for dividend reinvestment and tax lot choice (LIFO, average cost, etc.).
Finally, note that although there is no minimum deposit required to open an account, if you open yours with a starting balance of three thousand dollars or more, you’ll get sixty days of free trades, which makes it well worth considering.

Costs (3.7 stars out of 5)

The costs and fees associated with TD Ameritrade are generally quite good, but there are a few “gotchas” and because of the width and breadth of the company’s offerings, there are a lot of different fees to contend with and consider. Here’s a quick overview of some of what you can expect:

The Good

• No inactivity fees.
• No commissions for ETF or equity trades.
• No commission on Forex currency pair trades.
• No per-leg commission on options trades. Per-contract commissions are $0.65. Fees are waived for contracts priced at $0.05 or less. VIP option customers are able to privately negotiate discounted commissions based on volume.
• Paper statements incur a $2 handling fee for accounts with low balances. Trade confirmations are free.

The Not So Good

OTCBB trades incur a commission of $6.95/transaction (it’s not hard to find a broker that offers these for free)

Mutual fund commission for funds outside the No Transaction Fee program is $49.99 (pricey, but it only matters if you go outside the band).

Futures transaction fees are $2.25 per contract per side plus exchange fees.

Live broker fee is $25 per trade across asset classes.

And Sending a wire is $25. Sending a paper check is free, though there is a $15 overnight mail fee if the client requests it.

Also note that the margin interest TD Ameritrade charges is a bit higher than most of its competitors (usually 1% to 1.25% higher than average).
This can also feel a bit overwhelming to novice traders. The best approach to take is to only concern yourself with the fees associated with whatever you’re currently trading, compartmentalizing it to keep it from feeling daunting.

Educational Resources & Customer Support (4.9 stars out of 5)

TD Ameritrade is exceptional on this front. One of the best in the industry, in fact. They offer 24/7 phone support and chat built into both the web- and app-based platforms. In addition to that, the company maintains an active presence on a wide range of social media platforms, and they’ve got a good AI-driven help bot feature that can usually provide quick answers when you need them.

Their pool of educational resources is as broad as it is deep, and while a significant portion of those resources are designed with novice traders in mind, even if you’re a seasoned pro, you’ll find tons of great information here.

Research & Analysis Tools (4.8 stars out of 5)

In addition to offering world-class educational materials and a stellar support team, the company has assembled a mind-boggling collection of tools to help make you a more informed, and more effective trader. Again though, there’s so much here that it can be a bit overwhelming to a novice. Among other things, you’ll find:

Live News Feeds From:

• Wall Street Horizons
• Benzinga Audio Squak
• MarketWatch
• Midnight Trader
• Dow Jones
• CNBC Video
• And more

Third Party Research From:

• Credit Suisse
• Dow Jones
• Thomson Reuters
• MarketEdge
• Vickers Inside Trading
• And others

And a wide range of screeners including screeners for:

• Fixed Income Investments
• Mutual Funds
• Options
• ETF (100 categories, 35 criteria, with fifteen pre-defined ETF screens)
• And Stock Screeners with more than 85 predefined screeners on tap

If that wasn’t enough, you’ll also find a wide range of tools and calculators, a system that allows you to run hypothetical scenarios to see how your profits would be impacted based on different investment decisions, a social sentiment tool, Peer Comparison tool, and others.
On top of all that, you’ll also find a robust trade idea generator that can help you identify new investment opportunities. Taken together, this is amazing, and you’ll be hard pressed to find anyone that does it better.
If there’s a single fly in the ointment is that not all of the tools are available on both the web-based and the app-based platforms, so depending on which specific tool you want to use, you may find yourself having to jump from one to the other. Given the sheer range of tools available though, that’s seldom a huge issue.
One other thing to mention before we leave this section is charting. TD Ameritrade offers exceptionally robust charting capabilities on their ThinkOrSwim platform, allowing you to analyze data in a simply mind-blowing number of ways.
Although the charting capabilities on the web-based platform are quite good, they don’t hold a candle to what you’ll have available to you on the app-based platform.

Range Of Product Offerings (4.5 stars out of 5)

About the only two things you can’t trade on this platform are cryptocurrencies and CFDs. You can find pretty much everything else here, so you won’t run out of investment classes to trade in any time soon, though if your specific interest lies in either of the two items we mentioned above, this isn’t the right platform for you.

Pros And Cons

We like almost everything about TD Ameritrade’s platform and service offering. Most of our complaints are relatively minor. We wish some of their fees weren’t quite so high, but that’s a common enough complaint we can levy at just about any broker, and although the site is novice-friendly, there’s so much information present and so many options available that it can be a little overwhelming at first.
Probably the most serious complaint we have about this broker is the fact that not all of their tools are available on both the web-based and app-based platform, but the company is constantly improving, refining and tweaking and we suspect even that will diminish over time.

Conclusion

This is a simply superb platform from top to bottom. Not only can you trade and invest in just about anything, but the fees are (for the most part) quite reasonable and the tools and educational resources are best in class. This one comes highly recommended.