TD Ameritrade Review: A Good Choice for Beginners and Advanced Traders Alike

GOBankingRates Score

4.8
Quick Take: TD Ameritrade's sleek and intuitive trading platform appeals to novices and advanced traders alike. Its research and educational offerings are among the best in the industry, and the firm has eliminated commissions and most other fees. The one glaring drawback is the absence of partial-share investing, a crucial offering that is now common among its competitors.
  • Fees
    4.9
  • Variety of Investment Options
    4.3
  • Account Minimum
    5.0
  • Customer Support
    5.0
How did we calculate this?

Pros

  • Commission-free trading for stocks and ETFs
  • Customized interactive learning tools
  • Industry-leading trading platform
  • 401(k) rollover made easy
  • Order routing on stock trades continuously seeks price improvements
  • A wealth of free third-party research from trusted sources like Morningstar and CFRA

Cons

  • No partial-share investing
  • No direct access to cryptocurrencies

TD Ameritrade Overview

TD Ameritrade was already among the top brokerage firms before Charles Schwab — one of the biggest in America — completed its acquisition of it in 2020. The move helped boost Schwab’s customer base by 127%, according to The Ascent, and formed a brokerage behemoth with incomparable resources, reach and combined experience.

TD Ameritrade has been a trailblazer in the discount brokerage industry from the beginning. Known initially as First Omaha Securities, the institution that would become TD Ameritrade was one of the first firms to lower its fees when the Securities and Exchange Commission eliminated fixed brokerage commissions on May 1, 1975.

It also earned a reputation as a technological pioneer, executing the first touch-tone phone trade and the first mobile trade.

Today, TD Ameritrade continues its legacy of low fees, innovative technology and accessibility to everyday investors.

Key Features

TD Ameritrade earned high marks by eliminating fees, offering a broad menu of choices, reducing barriers to entry and prioritizing customer service.

Fees

TD Ameritrade offers $0 commissions for stocks, ETFs and options trading for all new and existing customers. Contract fees for options are $0.65, the industry standard, but TD Ameritrade charges no exercise or assignment fees.

Broker-assisted trades and interactive voice response phone trades cost $25 and $5, respectively, but you’ll never pay to trade online. TD Ameritrade also doesn’t sneak in market data fees, inactivity fees, platform fees or any of the other common hidden costs.

The one downside is the hefty $75 charge to transfer your entire account to another brokerage, which is on the industry’s pricier side. Partial transfers cost nothing.

Variety of Investment Options

TD Ameritrade offers an industry-leading variety of securities, including thousands of no-commission stocks and ETFs and more than 13,000 mutual funds, many of which are available with no transaction fees. On top of that, the platform offers 70 currency pairs for forex trading compared to 56 for E-Trade and none for Fidelity, as well as options and futures trading.

Currently, TD Ameritrade does not offer direct access to cryptocurrency — but that’s not the platform’s biggest shortcoming. TD Ameritrade does not allow users to execute partial-share trades, a critical offering that budget investors rely on to put their money in play. A single share of Tesla, for example, costs more than $900 as of Aug. 4, and many common stocks are even further out of reach.

Fractional-share trading is also critical for dollar-cost averaging, a common strategy favored by novice and advanced investors alike because it’s easy to apply over the long term. For example, if you contribute $100 every other Tuesday to an index fund ETF, you’ll buy more of it when it’s cheap and less of it when it’s expensive for consistent investing over time.

That’s impossible if you can’t contribute a fixed sum at regular intervals because you have to wait until you’ve saved enough money to buy a full share.

The inability to trade fractional shares is a glaring omission that will hopefully be remedied as TD Ameritrade fully integrates into the Schwab brand.

Account Minimum

There is no minimum to open an account — you can literally get started with nothing. TD Ameritrade does require a $2,000 deposit for a margin account and some options privileges, which is the industry standard. Fidelity also requires a $2,000 margin deposit, as does E-Trade.

Customer Support

Discount brokerages tend to offer get-what-you-pay-for customer support, but unlike the many fledgling online-only apps, TD Ameritrade has the resources to build world-class customer support infrastructure — and it shows.

When assessed against 14 other online brokers in the 2022 StockBrokers.com Online Broker Review, TD Ameritrade earned the No. 1 spot for both customer service and phone support. It has ranked No. 1 in customer service for an impressive nine years straight.

It recently launched the TD Ameritrade Satisfaction Guarantee. If any customer is not fully satisfied, the program will refund any fee in the TD Ameritrade pricing guide — including broker-assisted trade commissions, no-load mutual fund fees and options contract fees — from the previous billing cycle.

How TD Ameritrade Stands Out

TD Ameritrade’s status as an industry pioneer with national reach, institutional credibility and incomparable corporate resources allows it to maintain a sprawling hybrid structure. While it’s known for its tech-savvy online tools and mobile platforms, TD Ameritrade has never lost its presence as a face-to-face brokerage.

The company maintains more than 175 brick-and-mortar offices across the country — customers can drop in at any time. For context, Fidelity has only 170 physical offices and E-Trade operates just 30.

You can get service with a small-town feel at TD Ameritrade even if you don’t visit an office in person. That’s because local representatives are available 24/7 by phone and email, which is a refreshing break from the international outsourcing that has become the industry standard.

Comparable Investing Options

Fidelity

Fidelity is among the biggest brokerages in America and one of TD Ameritrade’s chief competitors. It offers the same $0 commission stock and ETF trades and $0 minimum deposit. Its deposit requirements for margin accounts and options trading are also identical.

Fidelity offers a comparable number of stocks, ETFs, mutual funds and other securities, but forex investors should look elsewhere — Fidelity does not offer currency trading. It does, however, offer securities by the slice — more than 7,000 stocks and ETFs are available for fractional share trading.

E-Trade

Like TD Ameritrade, E-Trade is owned by a giant — Morgan Stanley, in this case — and like Fidelity, it’s a primary competitor that shares many commonalities. It, too, offers no-fee trading for U.S.-based stocks and ETFs with no account minimums. Although its $0.65 options contract fee is the same as that of TD Ameritrade, the price drops to $0.50 for 30-plus trades per quarter. Futures traders can save money here, too — futures contracts cost just $1.50 per contract compared to $2.25 at TD Ameritrade.

But if you’re looking for partial-share investing, E-Trade disappoints as well. The platform does not yet allow fractional trading.

How To Open a TD Ameritrade Account

To open a free account, visit the TD Ameritrade welcome page and select an account type (individual brokerage account, IRA, Roth IRA, etc.). You’ll need your Social Security or individual taxpayer identification number, as well as your employer’s name, address and phone number. If you’re not a citizen or permanent resident, have your passport or visa number handy.

Who TD Ameritrade Is Best For

Thanks to its highly personalized and customizable platform and vast menu of investing options, TD Ameritrade stands out as a top choice for beginners, advanced traders and most investors in between.

Final Take

With intuitive, cutting-edge technology, free trading and a wealth of robust tools and resources, TD Ameritrade does not have many flaws to complain about. However, its only major drawback is a big one — the inability to trade fractional shares will be a dealbreaker for many.

FAQ

Here are the answers to some commonly asked questions about TD Ameritrade.
  • Can TD Ameritrade be trusted?
    • As part of its Asset Protection Guarantee, TD Ameritrade will reimburse you for any cash or shares that you lose to unauthorized activity. Also, the company is a member of the Securities Investor Protection Corp., which protects up to $500,000 in customer securities and up to $250,000 in cash. Finally, each customer gets $149.5 million worth of extra protection for securities and $2 million for cash through supplemental coverage provided by London insurers.
  • Is TD Ameritrade good for beginners?
    • TD Ameritrade offers a bounty of educational resources and research tools that, when combined with $0 fees and no account minimums, are perfect for novices — provided they can afford to buy full shares and aren't pursuing dollar-cost averaging through partial-share investing.
  • Does TD Ameritrade have hidden fees?
    • While many brokers charge for things like platform fees, market data fees and inactivity fees, TD Ameritrade does not.
  • How much money do you need to open a TD Ameritrade account?
    • You can open a TD Ameritrade with no money at all. There are no minimum balance requirements, so you can open an account with $0 and start saving for your first share.

Information is accurate as of Aug. 4, 2022.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.
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