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Who Should Choose TD Ameritrade?
TD Ameritrade is well suited to the needs of both novice and experienced investors, especially those who are looking for a full-featured online broker that offers great educational resources.
The thinkorswim trading platform is hard to beat. It offers customization, charting and analytical tools that are readily available on both mobile and desktop. It features access to trading specialists and superb customer service to help answer any questions you might have quickly and accurately. Well-designed screeners help users narrow down the vast universes of funds, stocks and bonds to find the assets they need.
TD Ameritrade provides comprehensive learning resources, including classes in technical analysis, income investing, options, trading strategies, investment basics and more. Its extensive educational resources earned it first place in Forbes Advisor’s best day trading platforms listing.
Here’s one minor caveat that potential customers should keep in mind: TD Ameritrade was acquired by Charles Schwab Corp in 2020. For now, these two online brokerage platforms remain separate, although the companies plan to complete the integration of their services by 2023.
TD Ameritrade’s few drawbacks include the lack of fractional share investing, which could leave newer investors at a disadvantage (Charles Schwab’s stock slices will likely be available within a year or so). Cryptocurrency assets are almost entirely absent from the platform, with the exception of Bitcoin futures.
Finally, TD Ameritrade’s margin rates are among the highest charged by any brokerage evaluated in our survey. Users who are looking for a margin account may be better served by a brokerage with lower rates.
TD Ameritrade Commissions and Fees
TD Ameritrade charges zero trading commissions for online purchases of stocks and exchange-traded funds (ETFs)—just like the rest of its major competitors. The commissions and fees the brokerage does charge are at rates broadly comparable to other services.
- Options: $0.65 per contract
- Futures and futures options: $2.25 per trade
- OTC stock trades: $6.95 per trade
- Broker-assisted trades: $25 fee per transaction
TD Ameritrade offers 13,000 mutual funds, including nearly 4,000 no-load, no-transaction-fee funds. This selection of funds compares favorably with competing online brokers. Just remember that like some of its competitors, TD Ameritrade charges a $49.99 fee if you sell most no-fee, no-load funds within six months of purchase. Select competitors, like E*TRADE, may have shorter holding periods that appeal to certain types of investors.
TD Ameritrade charges nearly the highest margin rates of the online brokers we surveyed. The fee for margin account balances of less than $10,000 is 9.50%, dropping to 9.25% for balances between $10,000 and $25,000. The lowest margin rates (6.75%) are available for those borrowing more than $1 million. In comparison, low-fee champ Interactive Brokers charges a flat rate of 2.60% for all margin borrowing.
In terms of service fees, TD Ameritrade comes in at about average. Outgoing wires cost $25, a full account transfer out is $75 and paper statements cost $2 per month. There are no inactivity fees or paper confirmation statement fees.
TD Ameritrade is paid for order flow, a practice in which brokerages receive compensation for processing transactions through particular market makers at exchanges. In the past, this has resulted in some customers not getting the best price for their investments, like if a brokerage opts for the market maker that compensates them the most versus the one that has the best price for their customer. TD Ameritrade, however, recently won a lawsuit rejecting the claim that “TD Ameritrade had failed to abide by its duty to seek the best execution for customer stock trades.”
TD Ameritrade Platform and Technology
Account Types
From basic to specialty accounts, TD Ameritrade customers will find everything they need, including:
- Taxable brokerage accounts
- Traditional IRA, Roth IRA and rollover IRA accounts
- SEP IRAs and SIMPLE IRAs for entrepreneurs
- Solo 401(k), pension or profit-sharing business retirement plans
- 529 plans, Coverdell accounts and UGMA/UTMA accounts
- Other speciality accounts span a wide range of business, investment club and charitable trust options
Web Platform & Mobile App
TD Ameritrade offers a simple web-based trading interface with a corresponding mobile app as well as the highly regarded thinkorswim trading platform, available in desktop, web-based and mobile app iterations.
The web platform allows users to trade stocks, bonds, ETFs, mutual funds and options. It’s very intuitive and easy to use, with additional features like streaming news, third-party research and trading watch lists.
thinkorswim Trading Platform & Mobile App
The thinkorswim trading platform was designed for investment professionals, and it shows. This is where TD Ameritrade customers get access to more advanced asset classes, such as futures trading, forex and futures options, in addition to all of the asset classes available on the web platform. Customizable features include:
- Alerts and watch lists
- Portfolio builder
- Trade journal
- Heat mapping
- AI assistant
- Paper trading
- Screeners
- Level II quotes
- Extended hours trading
- Advanced tools for dynamic scans and customizable technical indicators
- Complex options orders with rolling scans
The platform offers thinkScript, a simple programming language that lets users build their own analysis tools tailored to their specifications. This straightforward scripting language lets you take market data and build studies, special watch lists and charts as well as share them with other users.
The only real drawback we could find with thinkorswim is the lack of a short locator. This could be a problem for investors who are intent on short trading stocks.
thinkorswim Charting
We rank TD Ameritrade’s thinkorswim charting capabilities in line with the top online brokers. thinkorswim is a favorite among technical analysts. Charting tools include:
- 400 technical studies
- 20 drawing tools
- Integrated trading from chart
- Drawing tools
- Save chart settings as template
- Historical trades
Order Types
TD Ameritrade provides any type of order that an investor might need. In addition to basic orders, advanced traders will appreciate the conditional and durations orders. Order types include:
- Market, limit, day
- Trailing stop
- Good til cancelled (GTC)
- One cancels the other (OTO)
- Limit on open/close
- Market on open/close
- Short selling
With advanced order routing technology, most market orders are filled at a better price than the current quote. As noted above, TD Ameritrade receives payment for order flow—direct routing of trades is not available.
TD Ameritrade Mobile Apps
Investors tethered to their phones will appreciate the slate of TD Ameritrade mobile apps. The TD Ameritrade Mobile and thinkorswim apps are on a par with the desktop platform and received a near perfect ranking on our survey.
The TD Ameritrade mobile app features:
- Portfolio monitoring
- Market news, real time quotes and price alerts
- Stock, ETF and options trading
- Level II quotes
- Education including videos on stocks, options and investing strategies
- Social media integration
- Third-party research, analyst reports and social signals
The thinkorswim app is ideal for serious traders who need to keep on top of their options and futures trading or day trades. Advanced investors will appreciate the conditional orders and multi-leg options trades. Most charting and analytical features are available on the mobile app. Investors can chat with a live trading specialist, stream video from the TD Ameritrade Network and enter into chat rooms with other traders.
TD Ameritrade Range of Offerings
TD Ameritrade offers a full gamut of tradable asset classes, from traditional stocks, mutual funds and ETFs to American depositary receipts (ADRs), penny stocks and initial public offerings (IPOs). Fixed income investors will find bond specialists and screeners to help populate this asset category.
The platform is widely recognized as a sound choice for options trading, with this trading type available on both the web platform and thinkorswim as well as the mobile apps. Options specialists provide guidance when crafting strategies. Futures and forex investors can trade 23 hours a day, six days a week.
The cash management and banking features are a useful supplement to the investment assets. The only asset classes lacking are fractional shares and cryptocurrency—with the notable exception of Bitcoin futures.
| Offering | Available? |
|---|---|
Stocks | Yes |
ETFs | Yes |
Mutual Funds | Yes |
Bonds | Yes |
Options | Yes |
Futures | Yes |
Forex | Yes |
International Markets | Yes (limited) |
Penny Stocks | Yes |
Advisory Services | Yes |
Cryptocurrency | Bitcoin futures only |
Fractional Shares | No |
Cash Management Services | Yes |
TD Ameritrade Research and Education
Forbes Advisor chose TD Ameritrade as our best online broker for beginners and best day trading platform for education in large part due to its unbeatable research and education resources.
Educational Resources
TD Ameritrade excels in online investment education. Their educational offerings include:
- Immersive courses. TD Ameritrade strives to provide courses tailored for beginners and advanced traders, offering courses like Fundamentals of Futures Trading or Options for Volatility.
- Articles & videos. Offerings include 200 instructional videos, tutorials and investing publications.
- Webcasts. Options cover long-term investing, active trading, portfolio management and market commentary.
- TD Ameritrade Network. This streaming, real-time news channel offers market insights and strategy education from industry pros. Shows include “Futures with Ben Lichtenstein,” “The Watch List with Nicole Petallides” and “Morning Trade Live.”
- Paper trading. TD Ameritrade paper trading feature allows new and experienced investors to test strategies before deploying real money.
Research Resources
TD Ameritrade offers a broad suite of investment research tools, including third-party analyst reports and a variety of screeners.
- Market Edge. Offers timely information and technical analysis of the markets.
- Screeners. Find opportunities in stocks, options, mutual funds or ETFs with predetermined screeners based on strong buys, lifecycle, highest alpha or lowest expense ratio.
- Premier List. Compiled quarterly by the experts at Morningstar, Premier List is an objective and unbiased resource that focuses on no-transaction-fee mutual funds across 45 categories to give you a list of rigorously pre-screened funds.
- Market Java. This daily morning report gives you the most recent market news, views and insights from respected third-party research industry providers prior to the opening bell.
TD Ameritrade Customer Service and Security
Customer service is an area where TD Ameritrade outshines much of the competition.
We tested email, phone, text and chatbot responses multiple times and were impressed with TD Ameritrade’s performance. Tests yielded short phone wait times, correct responses to our questions and fast email responses.
The majority of phone calls were answered within one minute, with 10 minutes being the longest wait time. Texts were responded to immediately. Emails were typically answered within an hour, with three hours as the longest response time. Every question was answered accurately, and the customer service representatives were credentialed and well trained.
TD Ameritrade’s chatbot was good, and most importantly it was quickly replaced by a human service agent if it was unable to answer a question.
The firm’s security and insurance will meet the needs of the majority of investors. TD Ameritrade offers industry standard security features. These include:
- Firewalls
- 128-bit encryption
- Two-factor authentication
- Mobile security features
Some competitors offer voice recognition as an additional layer of security when users contact customer service, a useful feature that TD Ameritrade lacks.
Account insurance is more than adequate for most investors. It includes the standard $500,000 of Securities Investor Protection Corporation (SIPC) coverage. TD Ameritrade automatically offers $149.5 million in supplemental insurance for each customer as an additional cushion against company failure or bankruptcy. Cash assets receive up to $2 million in additional coverage.
Customers should always be aware that no brokerage provides insurance that protects financial assets from losses due to investment choices or market declines.
About TD Ameritrade
TD Ameritrade traces its roots back to 1975, when Joe Ricketts founded First Omaha Securities, Inc. The brokerage has evolved into TD Ameritrade over nearly four decades via numerous acquisitions and an IPO in March 1997. It pioneered online trading in the 1990s, and it was among the first firms to begin offering discounted commissions.
In 2020, TD Ameritrade was acquired by Charles Schwab Corp. The companies plan to complete the integration of their online brokerage services by 2023. Until then, Schwab and TD Ameritrade will continue to operate as two separate broker-dealers.
Today, TD Ameritrade provides investing and trading for 11 million clients totaling more than $1 trillion in assets. The firm is also the custodian for more than 6,000 independent registered investment advisors. Clients place roughly 500,000 trades per day at TD Ameritrade.
