TD Ameritrade Review - Versatile Online Discount Brokerage

TD Ameritrade Review - Versatile Online Discount Brokerage

TD Ameritrade Review

As one of the oldest and largest discount brokerages in the United States, TD Ameritrade offers investment options for just about anybody ranging from “buy and hold” investors to active traders that need advanced research platforms. 

While there is a lot to like about TD Ameritrade, it might not be the cheapest brokerage and day traders still might prefer to trade elsewhere.

However, it is hard to find another discount brokerage with the same amount of services that can be used by novice and advanced investors despite the higher fees. In this TD Ameritrade review, we'll take a look at some of the key aspects of this beloved brokerage.


Overview of TD Ameritrade

TD Ameritrade was founded in 1975 as First Omaha Securities. Today, they have over 6 million customers with over $600 billion in assets and also have over 100 branch offices located across the country in addition to being one of the oldest and largest online brokerages.

A good reputation also precedes TD Ameritrade as Barron’s has also rated the brokerage #1 in 2016 as being the #1 online broker long-term investing, usability, research amenities, portfolio analysis & reports, and novice investors.

Three of these accolades have been awarded at least two years in a row. Safe to say, this is a brokerage with stellar reputation.


Who Should Consider It?

Beginner Investors

Novice investors will like TD Ameritrade’s thorough educational support database as they learn how to invest.

It’s also easy to get started because there are no account minimums if you only have a couple hundred dollars to begin investing with.

New and experienced investors, that don’t necessarily want to be responsible for the day-to-day investing decisions, will also like the option to automate their investing habits with roboadvisor funds that allow you to enjoy the benefits of a managed portfolio without the steep costs of a traditional fee-based broker.

Passive (Long-term) Investors

Those that like to buy and hold their investments for several years or decades will appreciate TD Ameritrade’s wide selection of investment offerings including 100+ commission-free ETFs, automated robo-funds, and annuities.

Active Traders

TD Ameritrade has received much praise in the investing realm because of their extensive research platform.

Active traders will have a hard time finding more in-depth trading tools at other brokerages. It’s one reason they have won awards from several leading financial publications.

Any Trader Not Looking For The Cheapest Commission

It’s no secret that TD Ameritrade isn’t the cheapest brokerage to choose from. But, as mentioned earlier in this section, they have a lot of offerings and services that many cheaper brokerages don’t offer.


Likes & Dislikes

Likes

Dislikes

  • Multiple trading platforms that benefit investors from all levels of experience
  • Powerful research and data tools
  • Incredible education center
  • No account minimum
  • No platform or data fees
  • Wide variety of investment products
  • 100+ commission-free ETFs
  • Short selling allowed
  • Not the cheapest online brokerage
  • Short-term trading fee for commission-free ETFs sold within 30 days of purchase
  • Potential confusion as they have so many different trading tools - you will need to take a few minutes to research the various apps and platforms to determine which is best for you
  • Some customers have reported periodic system downtimes

Investment Offerings

You can buy just about any investment at TD Ameritrade. Below is a list of the available investment offerings:

  • Stocks
  • Options
  • Mutual Funds - more than 13,000 to choose from
  • ETFs - includes 100+ commission-free funds
  • Bonds & Fixed income
  • Futures
  • Forex
  • IPOs
  • Cash Management
  • Annuities
  • Managed portfolios

ETFs

ETFs have quickly increased in popularity in the last several years as they trade like hold a basket of stocks like mutual funds and usually have lower expenses.

One nifty aspect of the 100+ commission-free ETFs is that you have the option to trade select iShares and Vanguard funds, which are two of the most reputable and highly recommended fund families around.

Automated Investing

TD Ameritrade’s Essential Portfolios (roboadvisor funds) are quickly becoming another way that online brokerages are able to encourage “set it and forget it” investing by allowing you to invest in a basket of ETFs with a small management fee of 0.30% and an initial minimum investment of $5,000.

This fee and minimum investment are competitive with the other brokerages that offer this same service.

Unlike other brokerages that use their own funds, TD Ameritrade uses iShares and Vanguard ETFs selected by Morningstar as they do not have any ETFs of their own.

After completing a questionnaire, you will have the option to choose an investing strategy ranging from conservative, moderate, growth, or aggressive that best aligns with your survey answers.

TD Ameritrade has something for everyone when it comes to investment offerings. The availability of 13,000 mutual funds and commission-free ETFs from iShares and Vanguard is huge for those wanting to invest with long-standing fund families that have proven track records.

Young and middle-aged investors will also appreciate the fact that they can also create annuities and managed portfolios when they transition to a conservative wealth management strategy in a few decades as well.


Fees

While TD Ameritrade is in most part more expensive than some other online brokerages, they have recently cut some of their commissions from $9.99 to $6.95 per trade as the other online brokerages like Charles Schwab, Fidelity, and Vanguard continue trying to outdo one another in charging the lowest fees.

  • Buy or Sell any Stock or ETF online: $6.95 (excludes commission-free ETFs)
  • Broker assisted trades: $44.99
  • No-Load Mutual Funds: $49.99
  • Load-Only Mutual Funds: $0 plus mutual fund fees
  • Options Trades (online): $6.95 plus $0.75 per contract
  • Futures: $2.95 per contract plus exchange and regulatory fees

Dropping their trade commission from $9.99 to $6.95 has helped them remain competitive with the cheapest brokerages that charge as little as $4.95 per trade for stocks and ETFs.

Their fees might be higher than other brokerages and it might be better to go with another brokerage if you don’t need the additional research tools or educational platform, but you should still keep in mind that low-fee brokerage might not always be the best way to go as they might have some limitations.

If you want to trade mutual funds, it’s most cost-effective when you trade from their no-load, no-transaction-fee offerings, just like almost every other brokerage.


Platform

Usability and Features

TD Ameritrade differs from other online brokerages in that they offer several different trading platforms. Others might only offer a second platform for advanced traders.

Web Platform

This is the basic platform that is great for any novice or experienced investor that only wants to trade traditional stocks, bonds, and ETFs and doesn’t need the additional charts and tools that professional traders need.

But, this doesn’t mean you are without any research tools as you can access performance graphs for a particular stock or fund.

The web platform is easy to navigate with its drop-down menus and placing the information you need in easy-to-find spots.

There is even a portion of the platform that you can customize called “The Dock” by adding modules like Yahoo! Finance newsfeed or the Social Signals module that monitors buzzwords on social media.

Trade Architect

Trade Architect is as good as it gets for advanced traders that use another brokerage’s version of this platform.

And, it’s offered for free without any minimum number of monthly trades either.

You have the ability to create interactive charts, stream news from CNBC, access level II quotes, and talk to trading specialists for free!

With Trade Architect, you can use more than 30 different stock and option screeners and read third-party investing reports.

Plus, there are weekly webcasts on equities, options, and other asset classes to help improve your investing expertise as well.

thinkorswim

The thinkorswim platform is what helps justify TD Ameritrade’s higher trade fees and will quickly become the envy of many professional traders.

With this platform, you have access to the following advanced options:

  • Company Profile
  • Advanced Earnings Analysis
  • Advanced Options Analysis
  • Plot FRED Data
  • Chart Social Sentiment
  • Backtesting and Replaying Historical Markets Tick by Tick
  • View Economic and Corporate Calendars
  • Create and Conduct Real-Time Stock Scans
  • Share Charts and Workspace Layouts

Not much has been left out of this platform and it has won several awards for its design and features.

Many will be impressed with TD Ameritrade’s various platforms. Advanced traders stand to be the most pleased due to the wide array of research tools and basic investors will also like the ability to customize the web platform to better suit their needs and interests.


Design

TD Ameritrade has worked hard to make user-friendly apps. It’s evident when you have 4 different choices (3 aforementioned platforms + mobile trading).

Being able to customize “My Dock” in the web platform is a small step forward and the real value is in the Trade Architect and thinkorswim platforms.

Trade Architect

Trade Architect strikes a great balance for you when you are an active trader that wants more than the basic charts and tables offered on the basic web platform for novice investors, but, would feel overwhelmed with the suite of options offered on the thinkorswim platform.

Despite having advanced features, it’s still easy to navigate and find the extra information you need to make an educated decision.

thinkorswim

As this platform is so advanced, it can get real confusing if you don’t understand all the features.

Navigating the platform is relatively easy given its potential, but, there is a steeper learning curve than with Trade Architect.

All four of the platforms are well-designed, but, you will find the most value in Trade Architect and thinkorswim.

If you do some active trading, but, do not need the advanced features of thinkorswim, it’s best to remain on the Trade Architect platform to avoid confusion.


Customization Options

One reason people like apps is the ability to customize the program to cater to your needs. TD Ameritrade also offers these options to help make their platforms more personable.

My Dock

My Dock is the customizable part of the web platform where you can add modules like the Yahoo! Finance newsfeed, a social media monitor, alerts, and watchlists.

thinkScript

thinkScript is one of the features available on thinkorswim. You can use price date along with functions, operators, and variables to create your own alert system.

FRED Data

This is another thinkorswim feature allowing you to obtain statistics from the Federal Reserve Economic Data and customize it for your research needs in many different ways.

Overall, many casual users will find the My Dock customization to be a nice touch instead of only staring at menu options and data feeds they do not use. The professional traders will be pleased that they get full access to render the research data as they please.


Mobile Platform

As investors gradually shift away from trading on their computer to their mobile devices, online brokerages are placing more emphasis on full-service mobile apps.

TD Ameritrade can be considered a leader in this arena and offers two different types of apps depending on your trading expertise.

TD Ameritrade Mobile

New and casual investors will be happy with the TD Ameritrade Mobile App.

With this “basic” app, you can do the functions of most other brokerage apps like monitoring your portfolio’s performance, reading the latest market news, deposit checks, and make trades.

To make a trade, you simply select which account you want to use and then select the stock or fund you wish to buy or sell and the number of shares. After hitting the confirm button, the trade is executed.

One unique feature regarding trading is that they have educational support videos to help you trade on either app version and have specific videos for Android and Apple devices.

Most other brokerages don’t provide this much training material. And, you can even text an agent if you need real-time support.

Additional features of the mobile app include the option to take a picture of a product’s barcode to find the company stock information through Snapstock, and even sync your Apple watch to view particular watch lists and stock quotes.

TD Ameritrade Mobile Trader

Active traders will want the Mobile Trader app as it gives them access to over 300 advanced charts, elite tools, and the ability to simulate trades.

Essentially this app is the mobile-friendly version of Trade Architect.

There isn’t much not to like about either of TD Ameritrade’s mobile apps. As we continue to rely on our mobile devices more and more, these apps are some of the best.


Trading Process

Trading on any of the platforms is rather simple. If you get stuck, there are videos available in the learning center to help you if you need assistance, the thinkorswim platform in particular.

On  web platform, all order information appears at the bottom of the browser at all times, making the trading process smoother and quicker.

It is probably the hardest to execute a trade on the thinkorswim platform because it’s so advanced.

To do so, type in the stock symbol and left-click on either the Ask or Bid buttons to bring up the order screen in the bottom part of your screen.

After this, the order process will be very similar to the other three platforms.

You can also create advanced orders or access additional research features by right-clicking the Ask or Bid buttons on a stock screen.

When you are ready to confirm the order in thinkandswim, you click the “Send” button and the order will be executed as requested.

When trading in the Trade Architect platform, the process is the same except you won’t have access to as many research features if you are not ready to place an order just yet.

There is a small learning curve to trading in the advanced platforms, but, by clicking on the Bid or Ask buttons you will quickly be able to schedule a trade.


Charting

Trade Architect allows you to make some advanced charts, but, the real power is with the thinkorswim platform that allows you to go back 20 years.

You can create different chart types with the following information:

  • Candlestick patterns
  • Drawing alerts
  • Condition wizard
  • Social Sentiment
  • 300+ technical studies (thinkorswim only)

In addition to having lots of trading and platform options, you can also discover a lot of information through the charts beyond the typical historical price performance of the stock and its competitors that are the most information other brokerages will provide.​

Web Platform Charting

Even the basic web platform charting is pretty good for its capability, although any serious trader will probably use either the Trade Architect or thinkorswim charting platforms instead.

Casual investors might also be surprised at their charting capability. For advanced investors, they won’t have to go anywhere else for their charting and research needs.


Research

TD Ameritrade has all the research tools you probably need. In addition to the Morningstar reports and the latest market news, two tools most online brokerages offer, you also have access to the latest third-party analyst reports and Market Edge momentum index that helps grade the recent performance of a stock to help determine if you should buy, hold, or sell.

To help compile all the research into one location, a notable research feature is called ResearchTeam that brings data from various sources and also compares the stock you are researching to its competition to help you view the expert opinion and performance in a single screen.

A few other online brokerages offer extensive research resources like TD Ameritrade does and it’s a nice compliment to the additional trading tools offered as well.


Educational Materials​

You will probably find more educational materials here than almost any other brokerage with support articles and short videos on every topic, including how to initiate a trade on the mobile platform.

A dedicated learning center just for thinkorswim

Possibly even better is the vast number of videos for their thinkorswim platform because of it’s learning curve.

These videos will help you perform any task from trading a stock, charting, to learning the available functions for each tab.

All the videos are 5 minutes or less, so you won’t spend too much time learning instead of researching and trading.

myTrade

One advantage of the Internet is that you can literally connect to anybody on the globe and swap investment advice.

Just like Vanguard aficionados have the Bogleheads forum, you can visit myTrade to discuss different financial topics with TD Ameritrade members.

TD Ameritrade has won awards for being one of the best online brokerages for novice investors for a reason. Part of that is because they try to make it as easy as possible to help you understand their platforms and basic investing principles.


Support

TD Ameritrade is known for their high-quality customer service. When you call an agent, hold times are minimal and the customer service agents are always helpful and friendly.

They also have live chat support that is also available 24/7 and is available in the web browser and their mobile app. This type of support can be just as helpful as and possibly quicker than calling an agent.

If you would rather send an e-mail, sending documents for example, you can expect to receive a reply within 24 hours.

Finally, you can always visit a physical branch to receive in-person support for urgent or complex matters.

The customer service of TD Ameritrade is on par with many other of the leading online brokerages.

As it is a full-service brokerage, they do offer better support than many of the discount brokerages that can charge lower fees partially because they have a smaller support staff.


TD Ameritrade Review Final Verdict

TD Ameritrade is a great brokerage option for any investor regardless of their skill level.

There are very few brokers with the same range of investments, in-depth trading tools, research, educational materials, and advice with a low trade fees.

They might be a little more expensive than the competition and only the bargain hunters concerned about expenses might be better served at another brokerage.

As one of the oldest and largest discount brokerages in the United States, TD Ameritrade offers investment options for just about anybody ranging from “buy and hold” investors to active traders that need advanced research platforms.

Andrew
 

My name is Andrew and I run Slick Bucks to help folks learn to manage money cleverly, and how that clever management can make you wealthier.

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