Our experts answer readers' investing questions and write unbiased product reviews (here's how we assess investing products). Paid non-client promotion: In some cases, we receive a commission from our partners. Our opinions are always our own.
About TD Ameritrade
TD Ameritrade is an online brokerage best for active traders. The brokerage offers a large range of investment options, including stocks, bonds, ETFs, mutual funds, futures, bitcoin futures, and more.
TD Ameritrade is one of the best online brokerages for beginners, especially for active traders, as it offers low to no fees and no minimum balance requirements. In addition, a large chunk of the offered mutual funds are no-transaction-fee funds, so the brokerage could also be a good choice for traders who want to minimize fees on mutual funds.
Also, TD Ameritrade provides many of the same services as Charles Schwab, including copious trading platforms and tools, investment research materials, and educational courses and webcasts. Some tools include a stock screener, real-time data streaming, customizable chart, paper trading, and more. You can also access bond-specific tools, like the Bond Wizard, Bond Calculator, and Bonds Alerts. The Bond Wizard tool allows investors to determine the cost and yield of their bonds.
Its managed accounts, however, aren't open to new clients, so you'll have to utilize its affiliate, Charles Schwab, for such services.
The TD Ameritrade mobile app is available on iOS and Android devices.
TD Ameritrade: Overall Rating
| Feature | Insider rating (out of 5) |
| Fees | 4.75 |
| Investment selection | 5.00 |
| Access | 4.58 |
| Ethics | 4.88 |
| Customer service | 5.00 |
| Overall score | 4.83 |
TD Ameritrade Pros and Cons
| Pros | Cons |
|
|
TD Ameritrade is one of the strongest online brokerages and offers a vast selection of account options and investments. Most of the accounts offered through TD Ameritrade don't have an account minimum and generally charge low fees. Moreover, active traders can benefit from advanced charting and account tools, like stock screeners, customizable charts, and bond specific features. Beginners can also use the platform's large selection of educational resources and access to in-depth research.
You can't invest in fractional shares or cryptocurrencies with TD Ameritrade. Although the brokerage offers indirect crypto trading through investments like mutual funds and bitcoin futures, folks wanting to actively trade crypto should look elsewhere. Another downside to TD Ameritrade is that it no longer offers its managed/automated accounts. Instead, TD Ameritrade account owners wanting access to a robo-advisor must open a Charles Schwab account, which has higher minimums and fees.
Is TD Ameritrade Trustworthy?
To ask if TD Ameritrade is trustworthy is to also ask if Charles Schwab is trustworthy. Charles Schwab acquired TD Ameritrade on October 6, 2020, so the two companies are currently merging their businesses. Both companies have received high ratings from the Better Business Bureau.
The BBB rates companies using a grade scale range of A+ to F. Currently, TD Ameritrade has an A+ rating, and Charles Schwab has an A+ rating. These grades indicate that TD Ameritrade and Schwab both interact fairly well with customers.
In 2021, TD Ameritrade, Robinhood Investing, and several other investment apps faced backlash for restricting trades on Gamestop (GME), AMC Entertainment (AMC), and other stocks that surged due to a Reddit forum called r/WallStreetBets. You can see an updated list of its current trading restrictions here.
Ways to Invest with TD Ameritrade
Self-directed Brokerage Accounts
TD Ameritrade offers individual and joint brokerage accounts, which require no minimum deposit and include commission-free trades on US-listed stocks, ETFs, and options. If you're more of a research-oriented trader, TD Ameritrade additionally provides market analysis from Morningstar Investment Management professionals.
Individual and joint brokerage accounts can be opened as cash accounts, margin accounts, cash and margin accounts, cash and options accounts, and margin and options accounts. To access margin or options trading, your account must have at least $2,000.
You can also utilize several trading platforms — including its classic web platform, next-generation web platform, and thinkorswim trading platform — and investment tools. Its thinkorswim mobile, desktop, and web platforms are best for advanced traders searching for perks like real-time market alerts, stock scanners, options statistics, and more.
Managed Portfolios
Previously, TD Ameritrade offered three managed portfolios: Essential Portfolios, Selective Portfolios, and Personalized Portfolios. However, due to the Schwab acquisition, TD Ameritrade's managed and automated investing accounts are no longer available to new clients.
If you're a beginner and prefer a hands-off investment approach, you'll have to set up a managed account through Charles Schwab. Schwab currently offers two robo-advisors: Charles Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium.
Schwab Intelligent Portfolios has a $5,000 minimum, but it doesn't charge any advisory fees. With this account, the brokerage invests your money into a diversified portfolio of ETFs that align with your risk tolerance and investing goals. The account also includes 24/7 customer support, and it supports brokerage, IRA, trust, and custodial accounts.
Schwab Intelligent Portfolios Premium takes these features a step further by pairing them with unlimited guidance from a CFP. However, you'll need at least $25,000 to get started. Plus, fees include a one-time $300 planning fee and $30/month advisory fee.
Retirement Accounts
TD Ameritrade offers several retirement accounts for individuals and small businesses. The brokerage's current selection includes:
- Traditional IRAs: A tax-advantaged retirement savings account funded by pre-tax dollars. The 2023 contribution limit is $6,500 for folks under 50, or $7,500 for folks 50 or over.
- Roth IRAs: These are funded by post-tax dollars, so you won't pay taxes when you withdraw funds. The 2023 contribution limit is the same as traditional IRAs. You can start withdrawing funds when you're 59 1/2, or you'll be charged a 10% early withdrawal penalty fee.
- Rollover IRAs: You can roll funds over from an old 401(k) or 403(b) into a new TD Ameritrade IRA. There's no minimum initial deposit and no maintenance fees.
- SEP IRAs: A Simplified Employee Pension Plan IRA is a self-employed retirement plan for small business owners and their employees. The contribution limits in 2023 are $66,000 or 25% of your income, whichever is less.
- Solo 401(k)s: A retirement plan for folks that are self-employed. This type of account allows investors to contribute as both employer and employee contributions.
- SIMPLE IRAs: A small business retirement savings plan with an employee match. Businesses must have 100 or fewer employees.
- Money pension or profit-sharing plans: Businesses of any size can open a pension or profit-sharing plan for tax-deductible contributions and tax-deferred growth. Profit-sharing plans earn a percentage of their company's profit. A money pension plan earns an annual contribution of $66,000 or 25% of income, whichever is less.
In addition, each account comes without minimum opening deposits or maintenance fees. Roth and traditional IRAs feature educational resources, retirement tools, and access to investing and market research.
Education Savings Accounts
You can also save for college and educational expenses with TD Ameritrade 529 college savings plans and Coverdell Education Savings Accounts (ESAs). The Coverdell ESA offers tax-free distributions, with a $0 minimum deposit and a $2,000 annual maximum contribution limit.
The 529 plan provides several investment choices, including domestic equity, real estate, international equity, international bond, money market, and fixed-income investments. Minimums and fees vary by state.
TD Ameritrade also offers non-tax-deferred custodial accounts, which are types of custodial accounts that a parent or guardian can contribute funds until the beneficiary meets the age requirement of the state. Funds contributed to these accounts are considered an irrevocable gift under the Uniform Gift to Minors Act/Uniform Transfer to Minors Act (UGMA/UTMA).
Trust Accounts
A TD Ameritrade trust account allows investors to transfer assets to one or more trustees. Trustees can manage the assets of the account for the benefit of the account owner. TD Ameritrade offers trusts for taxable living, revocable, testamentary, and irrevocable trusts.
Partnership Accounts
A partnership account is an account shared by two or more people with an established agreement. Taxes are reported on the individual partners as personal income tax. These accounts can be opened as cash accounts, cash and margin accounts, cash and options accounts, and margin and options accounts.
TD Ameritrade also offers a limited partnership account, which is like a regular partnership account but at least one partner has unlimited liability. Common reasons to open an LP include a real estate investment partnership and hedge funds. Limited partners have very little to no responsibility for how assets are managed. Also, limited partners don't pay self-employment taxes.
Corporate Accounts
Whether for a profit or non-profit corporation, you can open a corporate account in order for your business to pay bills, pay taxes under the corporation's name, hold assets, and invest funds. Corporate accounts offer additional protection benefits, such as liability protection, and account flexibility.
Investment Club Account
An investment club account is an account owned by a group of people, usually a partnership, that contribute a pool of funds to be invested in securities. Dividences, capital gains, and losses are reported on the individual member's taxes.
Limited Liability Account
TD Ameritrade offers this type of account for legally established LLCs. A limited liability account has the same tax status benefit as a partnership account, as well as the limited liability benefit of corporate accounts.
Non-incorporated Account
Non-profit organizations that are not charted as corporations can open a non-incorporated account as a cash account; cash and margin account; cash and options account; or cash, margin, and options account.
Similarly, a sole proprietorship account can be opened by a non-incorporated, single-owner small business in order to receive tax-advantage.
Investment Options
TD Ameritrade's investment selection consists of stocks, bonds, mutual funds (it offers more than 13,000, including bond mutual funds and crypto funds), ETFs, options, futures, annuities, IPOs, foreign investments (Forex), and other fixed-income securities. In addition, nearly 3,700 of its mutual funds are no-transaction-fee funds.
The brokerage doesn't offer direct crypto trading, but traders can invest indirectly in cryptocurrencies through over-the-counter (OTC) trust, mutual funds, ETFs, and bitcoin futures and micro bitcoin futures.
TD Ameritrade Fees
Most TD Ameritrade accounts don't have an account minimum, but to access margin and options trading, there's a $2,000 account minimum. There are commission-free trades on US-listed stocks, ETFs, and options. However, options contracts cost $0.65 per contract.
You'll pay up to $49.95 or $74.95 for no-load mutual funds. Futures cost $2.25 per contract, and Forex investment prices vary. TD Ameritrade also charges $25 for broker-assisted trades. See its complete pricing guide here.
TD Ameritrade Frequently Asked Questions (FAQs)
The downside to TD Ameritrade is that, despite the vast selection of investment options, it doesn't offer fractional shares. It also doesn't offer direct cryptocurrency trading. Investors can only invest in mutual funds, ETFs, trusts, and futures that incorporate crypto.
TD Ameritrade offers options that cater to beginners who want to learn more about the stock market. These include its education center, which provides articles, videos, webcasts, in-person events, and podcasts on all things investing. The brokerage also offers a Market News section that keeps customers updated on the latest happenings.
This depends on your investing preferences. Robinhood strictly offers stocks, ETFs, options, cryptocurrencies, and American Depositary receipts (ADRs). Plus, its options have no contract fees, so this brokerage is a better option for options and crypto traders.
TD Ameritrade, on the other hand, offers a wider range of investment choices and account options. Plus, its vast selection of educational resources makes it a better fit for both beginners and investors who simply want more to choose from.
Methodology: How We Reviewed TD Ameritrade
TD Ameritrade was examined using Personal Finance Insider's rating methodology for investing platforms in order to look at account types, pricing, investment options, and overall customer experience. Brokerage accounts receive a rating between 0 and 5.
Online brokerage accounts offer tools, educational resources, various assets, low fees, and more. TD Ameritrade was evaluated with a focus on how it performs in each category compared to similar platforms.
How TD Ameritrade Compares
TD Ameritrade vs. Merrill Edge
Active traders, passive investors, and hands-off investors can all benefit from TD Ameritrade and Merrill Edge's offerings. But TD Ameritrade is a better choice for those who want to expose their portfolios to assets like forex and IPOs.
However, if you prefer automated investing, you'll pay less to get started than you would with TD Ameritrade's equivalent accounts, Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium. (TD Ameritrade no longer offers its managed accounts to new clients, but you can open managed accounts through its affiliate, Charles Schwab.)
Merrill Edge offers managed accounts — Merrill Guided Investing and Merrill Guided Investing with an Advisor — include $1,000 and $20,000 minimums, respectively. But you'll need at least $5,000 for Schwab Intelligent Portfolios and $25,000 for Schwab Intelligent Portfolios Premium. However, you'll pay less in advisory fees with the Schwab accounts.
TD Ameritrade vs. Fidelity
TD Ameritrade and Fidelity Investments both offer investment options for self-directed traders and hands-off investors, but the fees, account features, and investment choices vary for each platform.
Fidelity is a competitive choice for hands-off investors searching for low-cost automated or advisor-assisted accounts. You won't have to worry about any fees with Fidelity Go if you have an account balance below $10,000. But its advisor assisted account, Fidelity Personalized Planning & Advice, costs more than TD Ameritrade's equivalent account, Schwab Intelligent Portfolios Premium.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
**Enrollment required.