TD Ameritrade is a full service brokerage, offering online services for most types of investors. There are no minimum requirements to open an account, and there are plenty of research and educational tools to choose from. It’s a smart pick if you’re looking for a wide variety of securities and account types.
What Is TD Ameritrade and How Does It Work?
Founded in 1975, TD Ameritrade is one of the largest brokerages in the world, providing services for more than 11 million investors, totalling a staggering $1 trillion in assets. Their online platform is user-friendly for both beginner and experienced traders.
The brokerage offers both self-directed and managed portfolio options — the minimum investment for each will vary. For all investors, it offers robust online trading platforms, educational and research tools, and a mobile app.
TD Ameritrade’s claim to fame so to speak is their $0 minimum opening balance requirement, $0 commissions (on most trades), and their selection of securities. In particular, investors can choose from many commission-free exchange traded funds (ETFs) and mutual funds that don’t charge any transaction fees.
If you’re interested in more advanced types of securities, you can invest in investments such as options, futures, forex and even bitcoin futures (TD Ameritrade will need to approve you for those).
You can choose from different account types including IRAs, taxable, 529, HSA and for the self-employed, solo 401ks. Whatever you choose, there are different trading platforms and research tools available to help you determine what your investment strategy should be.
Although Charles Schwab acquired TD Ameritrade in October 2020, the platforms are still operating separately.
No commissions for online stock and ETF trades
$0 minimum to open an account
TD Ameritrade At a Glance
Types of Accounts
4 IRAs; Solo 401k; 529
HSA and 2 taxable
For all investors
Commissions and Fees
$0 select mutual funds
$0 stock trading, ETFs
Stocks, Bonds, CDs
ETFs, Mutual Funds, Options, Futures, Forex
Research and Tools
Argus, Reuters, more
Yes, with alerts
Live chat; social media; in-person; phone support
8 a.m. to 6 p.m. ET, M-F
Types of Accounts
You can open most types of accounts at TD Ameritrade, including your typical investment accounts like taxable and IRAs. You can also invest in ones not usually found with smaller online brokerages, such as HSAs, 529s and small business options like the solo 401k.
There is no minimum account requirement to open an account with TD Ameritrade. No matter if you’re totally new to investing or rolling over hundreds of thousands of dollars from another investment account, you’ll be able to open an account with TD Ameritrade.
That being said, depending on what types of investments you want to purchase, there may be minimums for those. Same goes for TD Ameritrade’s managed portfolios.
Commission and Fees
In most cases you won’t pay commissions and fees for most transactions — including select mutual funds, ETFs, and stocks— though here are some exceptions:
You’ll be charged a $6.95 fee if you want to trade securities that aren’t listed on major exchanges
Options are $0.65 per contract
Full transfers cost $75
Purchasing a mutual fund that isn’t fee-free will set you back $49.99
You can invest in most securities at TD Ameritrade, including mutual funds, ETFs, stocks, bonds, options futures, and forex. If you’re interested in trading cryptocurrency, you won’t be able to trade it directly, but you can do so through futures contracts and crypto coin trusts instead.
TD Ameritrade’s trading platform allows you to execute trades and input orders by submitting a trade ticket—mostly what you’d find with other brokerages. It’s simple if you’re looking to trade on-off orders and even on the go.
There are also two more sophisticated platforms for advanced trading:
TD Ameritrade web platform: You can do pretty much all trades here, including ones for stocks, bonds, mutual funds, ETFs, and options. You can also access third-party research, watchlists, and watch streaming news.
Thinkorswim: Available in web, desktop, or a mobile version, more advanced traders can use this platform to trade the securities mentioned above, plus futures, options, and forex. It’s possible to trade these five days a week for 24 hours a day. You can also access more than 400 advanced analytics, technical studies, and charting tools.
Investors can even conduct emergency trading by using third-party platforms by way of Apple Business Chat, Facebook Messenger, and even Twitter Direct Messages. You can even use Google Assistant for voice-enabled investing and in your car to stay up to date on markets.
If you want to try your hand at more active trading, you can test out your skills using TD Ameritrade’s paperMoney virtual simulator. Think of it as a mock trading account where you can get $100,000 in fake money to trade in a margin account.
You can use those for free via TD Ameritrade’s trading platforms and their mobile app. If you’re not an existing customer, you can sign up for a free 60-day trial.
Research and Tools
Investors can take advantage of a wide selection of tools — more than many other brokerages — including ones from 15 third-party providers offering research, analysis, news, and commentary. Providers include Argus, CFRA, FRED, Reuters, Vickers, and Morningstar.
TD Ameritrade’s mobile app is available on both iOS and Android, which complements their desktop platform. You can use either the thinkorswim app if you’re a more advanced trader, or the standard app for all other trades.
Both apps have many of the same features as the web-based platforms. You can receive Level II quotes, watch educational videos, create custom watchlists, and create alerts for most features so you will know as soon as there’s a change to your holdings.
Mutual Fund Fees
TD Ameritrade does not charge transaction fees for more than 3,700 mutual funds — great for those who want a budget-friendly option. You can look at the funds based on different characteristics. Each mutual fund has a dedicated page where you can see statistics such as performance across different time periods, holdings, and more.
However, there are over 13,000 mutual funds to choose from. That means if you choose one that isn’t fee-free, you’ll need to pay a commission of $49.95 or $74.95 for a no-load mutual fund. You won’t be charged a commission from TD Ameritrade for load funds, but the sales commission may be much bigger.
Unfortunately, there is no robo-advisor option through TD Ameritrade.
Otherwise, you have two options if you’re interested in having your portfolio managed at TD Ameritrade:
Selective Portfolios: This option is best for investors who want assistance in selecting ETFs and mutual funds based on individual investment goals. An advisor will monitor your portfolio and rebalance it as necessary. To start, you’ll speak with a financial consultant who will help you with an investment strategy and come up with financial goals. Tax loss harvesting is available for certain portfolios, and fees range from 0.75% to 0.90% for your first $100,000 invested. You’ll need to invest a minimum of $25,000.
Personalized Portfolios: This option offers a customized service for those who have more to invest (at least $250,000) and want someone to help guide them as to how their investment goals tie into their overall financial life. TD Ameritrade suggests Personalized Portfolios are better for long-term investors. You’ll work one-on-one with a senior financial consultant, as well as a portfolio consultant to determine what asset allocation suits you best. You’ll be able to access your account via a customized dashboard and tax loss harvesting is available for certain portfolios.
You can reach TD Ameritrade’s customer service in a wide variety of ways. You can receive 24/7 support for virtually all their contact options, including live chat, text, and social media. To reach someone by phone, you can do so from Monday to Friday from 8 a.m. to 6 p.m. ET. If you want to speak to a representative in person, you can do so at any of their 250 branches — some consolidated with Charles Schwab — across the U.S during their business hours.
Is TD Ameritrade Right for You?
TD Ameritrade ticks off all the boxes of what most investors are looking for in a brokerage — low fees, wide selection of securities, no minimum opening balance, and advanced trading tools. Considering all the advanced products and services, you can even get assistance as long as you can meet their minimum investment requirements. There’s not much we don’t like about this brokerage.
Pros and Cons of TD Ameritrade
These are some of the good and not-so-good things about TD Ameritrade.
$0 minimum to open an account
Offers over 3,700 mutual funds with no transaction fees
Stocks, ETFs and options are commission-free
Excellent customer support
Robust free research tools
High quality trading platformNo direct trading in cryptocurrency
No direct trading in cryptocurrency
No fractional shares available
Frequently Asked Questions (FAQs) About TD Ameritrade
We’ve rounded up some of the most popular questions about TD Ameritrade that may help you decide if this is the right investment platform for you.
TD Ameritrade has tools and investment options suited for beginner investors. Investors can access their robust educational platform and easy to use desktop and mobile apps. However, if you’re a total beginner, the tools may feel too advanced for you.
You can make a trade by either logging into your TD Ameritrade account online or using their mobile app or trading platforms. You can simply place an order on their website by selecting what you want to trade and complete an order ticket with your request.
For more advanced traders, using the thinkorswim platform is a smart idea because they can take advantage of research tools to plan and make trades.
TD Ameritrade customers won’t be charged commission to trade ETFs, stocks, or options. You also won’t be charged fees for certain mutual fund transactions or making partial withdrawals from your account. However, you’ll pay $75 if you make a full withdrawal for your brokerage account and a $0.65 per contract fee for options.
There may also be expense ratios for different investments, though TD Ameritrade itself doesn’t charge them.
Contributor Sarah Li-Cain is a personal finance writer based in Jacksonville, Florida, specializing in real estate, insurance, banking, loans and credit. She is the host of the Buzzsprout and Beyond the Dollar podcasts. Contributor Veronica Matthews contributed to this report.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.