The Bottom Line: TD Ameritrade’s commissions aren’t the cheapest, but the upside is access to a high quality service.
Pros & Cons
Large investment selection.
High-quality trading platforms.
No account minimum.
Good customer support.
Higher trade commission.
Costly broker-assisted trades.
High short-term ETF trading fee.
TD Ameritrade requires no minimum investment and delivers standout features, including extensive — and free — research and data, portfolio-building guidance, a large selection of commission-free exchange-traded funds and more than 350 branches for in-person customer support. Investors have a choice of four trading platforms, but frequent traders may be turned off by the broker's higher-than-average $6.95 trade fee.
TD Ameritrade is best for:
TD Ameritrade at a glance
Where TD Ameritrade shines
Account minimum: TD Ameritrade’s $0 account minimum for IRAs and taxable brokerage accounts makes it easy for anyone to start investing — and it’s much lower than the $500 to $2,500 many brokerages require. Unlike some deep-discount brokers, TD doesn’t use its low minimum as an excuse to charge account inactivity fees or limit access to some of its research and tools to only those with high-dollar portfolios.
Tradable securities: TD Ameritrade aces the investment selection category by offering the full range of investments, including futures and forex and bitcoin futures trading for approved clients. In 2019 the broker says it will offer cryptocurrency spot contracts and futures contracts on a single exchange through its partnership with ErisX, a regulated exchange for cryptocurrency trading.
As for the less exotic stuff, the broker's selection of more than 300 commission-free ETFs and more than 4,000 no-transaction-fee mutual funds is equal to or exceeds what's offered at other big-name brokers like Charles Schwab and Fidelity.
Investor education/support: To say that the broker's digital educational offerings are abundant is putting it mildly. There's so much available in every format — videos, articles, slideshows and quizzes, as well as ongoing live online seminars and in-branch presentations — it's hard to know where to start. For a general investing education, let TD guide you through the curriculum by selecting your skill level (rookie, scholar or guru) and leafing through the research and resources it serves. For more specific guidance there's the "Ask Ted" feature. Ted is a chatbot who's good at providing directions to all of the broker's investing tools, tutorials, key data and whatever else pops into mind.
Virtual trading simulator: Surprisingly few online brokers offer mock trading accounts on their platforms. TD Ameritrade is one of them. Its paperMoney virtual simulator is a desktop-based platform geared toward advanced and frequent traders. It provides $100,000 in practice "money" along with access to a margin account. Investors can backtest strategies, access foreign exchanges and futures and practice backtesting. It's available for free through the broker's two platforms and its Mobile Trader app, although non-customers can register for a free 60-day trial — a good way to test a new platform before committing to setting up a real-money account.
Choice of trading platforms: TD Ameritrade offers two main trading platforms, each with a corresponding mobile version:
TDAmeritrade.com is the on-ramp platform that offers pretty much everything an average investor needs to identify, research, screen and trade stocks, funds, bonds and CDs and options. Baked into the free platform are:
Research from Morningstar, Market Edge, CRFA (formerly S&P Capital IQ) and TD's own financial pros.
A customizable landing page.
The broker's GainsKeeper tool, to track capital gains and losses for tax season.
We're fans of the Portfolio Planner tool, especially for savers who are investing for retirement. It helps users create a target asset allocation plan to assemble a properly balanced portfolio of stocks, ETFs, mutual funds and bonds. Investors can either build a customized model or pick a prebuilt one and use it to analyze a current portfolio or create a new one. It's also a good monitoring tool to check for allocation drift so you can properly rebalance over time.
Separately, the company has a desktop trading platform called Thinkorswim that's aimed at serious stock, ETF, options, futures and forex traders. It has all the features active traders need, including advanced trading capabilities, a robust lineup of technical analysis tools and studies, customizable screeners and charting, backtesting capabilities, real-time news, quotes, market heat maps and more.
Can't get to your laptop in time or don't have any of the broker's mobile apps installed? You can also place any code-red, emergency trades through third-party platforms via Twitter Direct Messages, Facebook Messenger and Apple Business Chat.
Mobile trading: The choice of platforms extends to the broker's mobile products. TD Ameritrade Mobile (iOS only) is a companion to the desktop platform and TD Ameritrade Mobile Trader is aimed at the advanced trading crowd and is a companion app to the thinkorswim platform. (The TD Ameritrade Portfolios app is for managed portfolio clients to monitor their investments. For more on TD's robo-advisory service, see our review of TD Ameritrade Essential Portfolios.)
TD Ameritrade Mobile has much of the trading functionality of the web-based platform, and also provides Level II quotes (not available on the web platform). TD Ameritrade Mobile Trader includes futures and forex trading, complex option ordering capabilities (three or four legs) and chat support from TD's trading desk. Virtual trading via the broker's paperMoney tool is only available on Mobile Trader.
Where TD Ameritrade falls short
Trade commissions: Our biggest knock against TD Ameritrade is its trading costs. The broker's $6.95 commission rate for stocks and ETFs (and $6.95 base rate $0.75 per contract for options trading) make it one of the pricier choices among discount brokers, especially when compared to peers like Fidelity and Charles Schwab, which charge just $4.95. Access to TD’s premium research, data, analysis and multiple trading platforms may make paying a premium commission worthwhile for investors who do not trade frequently.
ETF and mutual fund short-term trading fees: In the "there is no free lunch" vein, it's good to remember that buying an ETF from a broker's commission-free list requires making a commitment. At TD Ameritrade, investors must hold any of the broker's 300- commission-free ETFs for at least 30 days. Anything less and you'll have to shell out a $13.90 short-term trading fee. (Also note that TD Ameritrade's short-term redemption fee on almost all of its mutual funds traded within 90 days or less is a pretty steep $49.99.)
The bottom line
TD Ameritrade covers all of the bases and does it very well. No, it's not the cheapest in terms of trading costs. But you get a lot for your money, including free access to an impressive list of services including portfolio-building guidance, hands-on investing courses, high-quality research, trading tools and a wide selection of commission-free ETFs and no-transaction-fee mutual funds. The choice of two well-regarded, robust platforms (TD Ameritrade Web and thinkorswim) and the broker's $0 minimum deposit requirement helped TD earn some of the highest marks in our discount broker reviews.
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