TD Ameritrade Review
TD Ameritrade is a US brokerage company, regarded as one of the top rated and most popular worldwide. It has a long and transparent history, dating back to 1975 when it was founded.
Over time, following its main philosophy: "Bringing Wall Street to Main Street," TD Ameritrade turned its focus to serving mom-and-pop investors and making financial markets more accessible for everyone from one brokerage account. They also provide one of the best free paper trading accounts for people living in the United States.
Is TD Ameritrade the best online stock broker for beginners? Let's find out by reading the TD Ameritrade review now.
Currently, the company serves more than 11 million accounts and processes well over 650,000 trades per day. Today it is one of the industry leaders, offering a wide range of services and investment tools across all segments of financial markets.
TD Ameritrade is one of the best choices for both - novice and experienced traders. Although it charges more than most of its competitors, it offers one of the most complete and professional services.
Educational and research center, user-friendly and highly functional mobile apps, fantastic trading and analytics platforms, outstanding 24/7 customer service and many other.
Trading Platforms and Tools
Simply put, TD Ameritrade's platforms are the best on the market. The truth is that it is hard to find a so advanced mix of trading tools, ideal for beginner and professional traders and most importantly free of charge.
Yet, it may be somewhat confusing for those who have just opened their accounts to navigate through all the different platforms and features that they have access to. Here is a great comparison, directly from TD Ameritrade's website:
Web Platform and TD Ameritrade Mobile
It is clear that their platforms are differentiated in a way to target novice and experienced investors. The Web Platform (Trade Architect) and the TD Ameritrade Mobile are intended to satisfy the needs of those who are making their first steps on financial markets.
They are user-friendly and include only the most essential things that a beginner-to-intermediate trader may need in order to trade easily and efficiently. This makes the design clean and easy-to-navigate. Users can personalize their virtual "trade station" and include only the tabs that are relevant to their investment strategy.
But be careful with the Trade Architect. The only problem with Trade Architect is that it is flash-based, which nowadays is not supported by most browsers. Apart from that, TD Ameritrade recently announced that they are taking Trade Architect down due to the fact that Adobe will stop supporting the Flash coding language in 2020.
However, I expect, however, that there will be a worthy replacement. The reason why TD Ameritrade's tools get so much recognition and have made the company a leader in its respective industry is called "thinkorswim®".
This downloadable program requires a local installation and is intended for elite-level traders who are constantly involved in reading the news and getting the recent FRED (Federal Reserve Economic Data) updates.
You can use complex fundamental and technical indicators, set up custom alerts, backtest, trade on sentiment scores, employ automated trading strategies, etc. To make you further appreciate the benefits of using thinkorswim®, we should focus specifically on the benefit of having FRED at your disposal.
Currently, the only way to view this data in a similar structured, clear and concise way, as well as to modify it according to your needs, is to pay for a Bloomberg Terminal. The difference here is that TD Ameritrade offers you this for free and even without having a penny in your account, while the Bloomberg Terminal will cost you more than $2,000 per month.
Even the most demanding traders will be surprised by the fact that TD Ameritrade's platform offers simulated trading and more than 400 technical indicators for charting which ranks it on top within the whole industry. What is considered by many as the platform's best feature is called "thinkScript".
This propriety coding language allows its users to develop their own trading strategies and indicators. That way, traders who employ quantitative models can easily transfer them into the platform and enhance its existing functionalities.
The educational resource center
Apart from all that, thinkorswim®'s users can take advantage of its large educational resource center. Traders get access to valuable know-how through webcasts, online courses, and even in-person events.
There are plenty of how-to guides, demos and downloadable materials that provide users with everything they need to trade comfortably and with confidence. All the user has to do to take advantage of the huge resource base is to select a skill level and get automated suggestions about useful content, tailored to his personal needs.
The learner's progress is tracked and awarded on the basis of some basic gamification principles. TD Ameritrade has recently launched a robo-advisor service, which is intended to serve inexperienced investors or busy individuals, who do not have the needed time for stock picking. The service launched in 2016 and is called Essential Portfolios.
TD Ameritrade's platforms offer a wide variety of asset classes for their users to choose from. After creating an account, users can invest in:
- Mutual Funds
- Options (should be mentioned when the account is set up)
- Futures and Options on futures
What makes TD Ameritrade really stand out among its competitors is the fact that the brokerage company provides the biggest set of commission-free ETFs. After setting an account, an investor can take advantage of more than 300 ETF instruments and trade completely free of charge. This is 50 more than Charles Schwab for example.
The only thing to bear in mind when trading commission-free ETFs via TD Ameritrade is that each instrument that is purchased and sold within 30 days is a subject to a short-term trading fee of $13.90. The idea behind that is to limit the opportunity for short-term speculative traders to exploit the commission-free trading opportunities, available on the platform.
Apart from the no-commission stocks, and ETFs, TD Ameritrade offers its users a wide variety of no-transaction-fee mutual funds as well.
Commissions and Fees
Before deep-diving into TD Ameritrade's fee structure, let's focus on one of the best things - the fact that there is no investment minimum. This is a great advantage when compared with other brokers which require from their clients to have anywhere from $500 to $2 500 in their accounts in order to be able to trade.
TD Ameritrade's no-investment-minimum advantage makes it a great choice for basically all types of investors. With that said, TD Ameritrade's commissions are definitely not the most competitive within the industry.
Its fees are higher when compared to some of the other brokerage companies and it is not even by a small margin. TD Ameritrade charges a flat rate of $0.0 per trade for stock trading and an additional $0.75 per contract for options trading.
When it comes to trading mutual funds, TD Ameritrade's fees are set at $49.99. Broker-assisted trade fees are slightly lower at $44.99. Yet, the company is trying to decrease its fees in order to stay competitive and retain its leading position.
For example a year ago, the stock trading fee was $9.99. The fact that it is now lowered with more than 30% means that the company is trying to make its services more affordable to the masses.
Now let's focus on the things you get if you are willing to pay a slightly higher fees and choose TD Ameritrade instead of other service providers.
To give users the best possible opportunities to follow their preferred strategy, TD Ameritrade offers the choice between several different types of accounts:
Standard Accountsfor a flexible access to user friendly investment products, intuitive trading platforms and an objective research. This type of account may be used as an individual or as a joint account and it may be upgraded for futures, options and Forex trading.
Retirement Accountsto reach retirement goals with the help of Traditional IRA, Rollover IRA or Roth IRA, including information about all available kinds of tax advantages.
Education Accountsto plan for the future and to invest in it, with the choice between various state-qualified 529 plans, UGMA/UTMA accounts and tax-free Coverdell to be flexible when saving for education.
Specialty Accountsfor individual trusts, business partnerships, pension plans and sole proprietorships. They facilitate planning for the future easy.
Managed Portfoliosbeing offered by TD Ameritrade Investment Management, LLC., to help saving time with long-term investments and adjusted to personal financial needs, with options for changes and for growth.
Margin Tradingto take personal trading to a higher level. This account includes the opportunity to borrow money from TD Ameritrade to increase users' securities buying power by about 50 %.
Education and Research
The design team behind TD Ameritrade's platforms has done a really good job. The user interface is clean and simplistic, making the navigation process quite easy for both, novice and technically advanced users.
The comfortable experience when using the platform is achieved mostly by customizable dashboard features. By having the freedom to arrange the relevant windows across the user's console, each individual can easily track crucial information about their preferred instruments.
In My Dock, which is the name of the fully customizable sidebar, the user can place up to 13 different modules. They can be separated or arranged according to the user's preferences, thus maximizing the workflow and making the trading process really comfortable.
There are also site-wide bar streams with real-time quotes that are currently offered only by TD Ameritrade, which ease the trading process by neglecting the need of having to switch between different tabs and windows. That way, the user can monitor relevant information without risking to miss an important event or a potential price mover.
Yet, if the client has to switch to some other page for a second but gets notified about a good investment opportunity, he can take advantage of it instantaneously by using SnapTicket®. SnapTicket® is a feature that allows quick order placement that can be made from each and every page on the site.
When it comes to the mobile trading experience, TD Ameritrade once again stands out. The company's clients can take advantage of two separate apps, TD Ameritrade Mobile and TD Ameritrade Mobile Trader. The difference between them is that the first one is for inexperienced or more traditional investors, while the Mobile Trader one provides more sophisticated features targeting advanced investors and those employing more complex trading strategies.
When comparing both apps, it is worth noting that TD Ameritrade Mobile is easier to use as it contains only the essentials, while TD Ameritrade Mobile Trader is basically the mobile version of thinkorswim®. It is equipped with advanced charting features, consisting all of the 397 technical indicators that are available on the desktop platform.
Bear in mind that if you intend to trade more complex instruments, such as options, futures or even forex, you have no choice but using TD Ameritrade Mobile Trader. The great thing here is that both apps are Android- and iOS-compatible, so that you will have access to your trading station no matter where you are and what device you are using.
The professional customer service is another factor that really makes TD Ameritrade stand out. The customer support staff is knowledgeable and very efficient in their work. If there are some complex cases that cannot be solved by the support specialist that you are in touch with, the issue will be immediately transferred to the relevant department and then solved in a matter of a day.
When it comes to platform-related questions, apart from the helpful staff, users can take advantage of an advanced AI assistant. TD Ameritrade has developed the feature "Ask Ted". Ted is basically a chat bot who will guide you through the platforms and help you find whatever you are searching for.
No matter whether it is about account setup and verification, platform-related questions, general information or some other thing, each and every customer query is respected and treated in a very professional manner.
TD Ameritrade Review Summary
TD Ameritrade's founder, Joe Ricketts opened 1975 the first TD Ameritrade office in Omaha and they aquired Scottrade Financial Services in 2017. In 2019 TD Ameritrade was aquired by Charles Schwab and both services will be merged in 2020/2021.
Currently TD Ameritrade provides over ten million clients with investing and trading services; these clients have more than $1.0 trillion in assets.
TD Ameritrade is basically the best choice if you want to find a broker that values their customers, offer a wide range of services and is constantly innovating. Yet, if you want to cut costs, you should seek elsewhere as the fees that TD Ameritrade charges are slightly higher when compared with other service providers within the industry.
If you are a novice investor that is now making his first steps on financial markets, then TD Ameritrade is definitely the perfect fit for your needs. The built-in learning center contains everything needed for creating and shaping a personal investment philosophy, as well as defining the risk management strategy that will help you achieve your goals easier.
The fact that there is no investment minimum means that you can create an account and buy just a single stock or a commission-free ETF. Apart from that, the lack of minimum investment requirements provides users with the flexibility to open an account and take all the time they need to explore the platforms' features, before deciding whether or in what to invest.
Even with an account balance of $0, users still get access to all features within the platform. This basically means that you can use the platform for trading and for free professional education. Trade Ideas complements TD Ameritrade's already powerful tools and makes it even easier to identify entries and exits based on hundreds of trading strategies.Pros
- No minimum investment
- Easy-to-use, fully-functional platforms
- A wide variety of traded instruments
- Rich educational resources
- Great customer support
- Zero commissions are refinanced by selling order flow to 3rd parties.
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