In service for over 40 years now, TD Ameritrade is a brokerage firm, headquartered in Omaha, Nebraska. The firm gives individuals access to extensive options for investing through its online platform, that allows for trading of financial securities like mutual funds, stocks, bonds, options, foreign exchange, and fixed income investments.
TD Ameritrade came into light due to the ban on fixed brokerage commissions by the Securities and Exchange Commission. Founded by Joe Ricketts in 1975, he established the company as First Omaha Securities until being renamed as Ameritrade Clearing Inc. in 1983.
It works on three platforms – a desktop site, a web app, and a mobile app. The web portal, Thinkorswim, is a state-of-the-art application, boasting of an array of tools like heatmap and social sentiment analysis among others that enable traders to gather substantial insights.
Type of Accounts Offered
Appealing to every objective, TD Ameritrade offers a choice of accounts. The client profiles remain common across all trading accounts, which include cash, cash and margin, cash and options, and cash, margin, and options.
Standard Accounts
The most common of all, a standard account comes with sub-choices of an individual account, joint account, tenants in common accounts (where two or more people share ownership of a property).
Features
- Offers excellent flexibility with ownership of the account.
- Flat-rate trading structure.
Minimum Deposit and Fees
- No minimum deposit required at the time of opening a Standard Account.
- Electronic funding is $50.
- Minimum of $2,000 in case you opt for options trading.
- Flat stock trade fee of $6.95; options per contract fee of $0.75.
Retirement Accounts
Every individual has a different plan when it comes to retirement; this includes their lifestyle choices and standard of income. To accommodate all variations, TD Ameritrade offers multiple types of retirement accounts.
Features
- Tax liabilities are taken into consideration.
- Tools like IRA Selection Tool ( to decide between Traditional or Roth IRA) and 401k Rollover Tool are available to equip the investors better.
Minimum Deposit and Fees
- No minimum initial deposit required to open an account.
- No maintenance fees for any of the retirement accounts.
Education Accounts
Offering three types of plans under education accounts, TD Ameritrade takes into consideration your need to save money for college while also taking care of your tax liabilities.
Features
- Sub-account Types: 529 Plans, Coverdell Education Savings Account, UGMA/UTMA.
- Tax-defer option with 529 Plans and Coverdell Savings account.
- Different caps on maximum deposits for different accounts.
- Wide selection of Individual Investment Options.
Minimum Deposit and Fees
- No minimum deposit to open an account.
Specialty Accounts
Whether you are a partnership firm, a small business, a sole proprietorship or a corporate firm, the specialty accounts cover all business types providing a host of investment options.
Features
- Include trusts, limited partnerships, small business, corporate, non-profits, and accounts for investment clubs.
- Options for both incorporated and non-incorporated firms.
Minimum Deposit and Fees
- No minimum deposit to open an account.
Company History
Since its inception, TD Ameritrade has been the frontrunner in the use of technology to make investing more accessible for DIY investors, be it being the first firm to launch automated touch-tone phone trading in 1988, or acquiring K. Aufhauser & Co. to further advance on their first of its kind online internet trading platform.
It turned into a public limited firm by launching its IPO in March 1997 and went on to acquire ten firms in just a decade, inflating its technology, infrastructure, operations, and client base. In January 2006, Ameritrade acquired the U.S. brokerage firm TD Waterhouse from Toronto-Dominion Bank and renamed as TD Ameritrade.
Capitalizing on its reformation, TD Ameritrade broadened its product line and launched several informational tools like Portfolio Planner, a college savings account and more, to make the ordinary investors more confident in self-investing.
In one of its most transformational additions to its acquisitions, TD Ameritrade took over Thinkorswim Group Inc. in 2009, an eminent firm working on creating state-of-the-art software and tools for traders.
Trailblazing their way in the industry, TD Ameritrade made it extremely simple for the individual investors to trade stocks online by launching its mobile application (Android, iPhone, and iPad) in 2011.
TD Ameritrade Alternatives
When it comes to brokerage firms, you can find a horde of them out there. However, only a handful of them constitute the top of the list.
They differ in their charges, the flexibility of transactions, and overall cost to benefit value. Let’s take a look at some of the most renowned brokerage firms in the market apart from TD Ameritrade.
Charles Schwab
Based in San Francisco, California, Charles Schwab is a leading brokerage firm offering a large selection of commission-free exchange traded funds and no-transaction-fee mutual funds. It operates in 4 major divisions: investing, wealth management, banking, and trading.
It charges a flat stock trading fee of $4.95 and options per contract fee of $0.65.
Pros
- No minimum deposit.
- Stock trading of $4.95 is lower than most of the firms, making it cost effective
- Great for beginners with more than 4,000 no-transaction-fee mutual funds.
Cons
- An extremely high fee of $76 for buying transaction-fee funds.
- The online portal, StreetSmart, isn’t very user-friendly.
Fidelity
Based in Boston, Fidelity International is a leading online brokerage firm, offering a diverse portfolio to its clients including many no-transaction-fee mutual funds.
Pros
- A flat fee of $4.95, much cheaper than some other firms.
- Extensive resource center containing reports and data insights.
- Great for intermediate to experienced investors
Cons
- Minimum deposit of $2,500 for certain types of accounts.
- Might be a bit intimidating for beginners.
E-TRADE
Headquartered in the New York City, E-TRADE is a prominent name in the investment industry. It caters to both beginners and experienced investors, with integrated tools to help the users navigate the investment processes easily.
The stock trading fee for E-TRADE is a flat $6.95, with an options contract fees of $0.75, with a discount option available for volume transactions.
Pros
- Very user-friendly and hence, an excellent option for beginners.
- Detailed information available on the website to help investors take an informed decision.
- Free upgrade to E-TRADE Pro in case of more than 30 stock trades in a quarter.
- A highly extensive product offering.
Cons
- The commission of $6.95 is higher than most of the other brokerage firms.
- A minimum amount of $500 needed to open an account.
TD Ameritrade: Pros
In comparison to the alternatives available in the market, what makes TD Ameritrade the better choice despite its relatively higher stock trading fee?
- No minimum deposit on any account.
- The website is extremely user-friendly and easy to navigate, making it an easy first step for beginners.
- The gold variant of its online portal, Thinkorswim, is available free of cost to all traders irrespective of the minimum account deposits and trading status.
- Well acclaimed, robust customer support, 24*7 helpline.
- All-inclusive educational resources are available for traders at all levels.
- An exhaustive list of product offerings, including more than 4,000 no-transaction-fee mutual funds.
- Highly sophisticated online trading platforms along with two mobile apps integrated with the web portals.
TD Ameritrade: Cons
In-spite of the long list of pros that the firm boasts of, there are a few points that might discourage some traders to opt for TD Ameritrade. Let’s take a look.
- A high stock trading flat fee of $6.95; a lot of other firms offer a much lower number.
- A short-term trading fee of $19.99 in case you hold commission-free ETFs for more than 30 days.
TD Ameritrade Bottom Line
TD Ameritrade has been on the helm of innovations to make investing and stock trading as seamless as possible for the unaware, and its superior web portals and target-oriented mobile apps are a testimony to that.
Even though they ask you to shell out a couple of bucks more, the return on that incremental spend is worth it taking into consideration the sheer enormity and detailing resources it offers for all levels of users. Be it a novice or a seasoned trader, TD Ameritrade has plenty to offer to every investor.
Their customer service has been applauded in multiple reviews and shows their dedication to listening to their users. They understand what their customers need, and stay on top of the current and future technology to ensure that they deliver.
The quality of the resources made accessible by TD Ameritrade to investors is top-notch, which includes the one-of-its-kind daily broadcast it features (without any commercial breaks, so that’s an edge!) and The Ticker Tape, the written market analysis it publishes every day.
It’s challenging to balance all the variables in the mix – cost, ease-0f-access, quality of information, user-friendliness – when narrowing down on a broker. Trading and investing in stocks has long been considered a gamble; let’s make it an informed, data-driven trade!
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