TD Ameritrade Review: The Original Online Broker

In 1983, Ameritrade Clearing Inc was founded as a central party clearing broker. In 1995,  the company acquired K. Aufhauser & Company, Inc., the first firm to offer an electronic trading platform. TD Ameritrade is the original online broker and now one of the biggest and best. This is my TD Ameritrade review.

My first online trading experience was in 1996 when I started trading stocks with Ameritrade. I used Ameritrade all throughout college that ultimately led me to getting a job at Goldman Sachs in 1999 in the equities department. From there, I got a promotion and a raise to work at Credit Suisse, where I worked for 11 years until I retired in 2012.

Ameritrade will always have a fond place in my heart. Through many series of mergers and acquisitions, most recently with TD Waterhouse and Scottrade, TD Ameritrade is the #1 online brokerage platform today.

TD Ameritrade offers every investment choice that you are looking for, including common stock, preferred stock, bonds, mutual funds, exchange-traded funds (ETFs), and high-interest money market accounts.

TD Ameritrade Overview

As a full-service brokerage, TD Ameritrade offers just about any kind of account you may want. TD says that the most common new accounts include:

  • Individual
  • Joint Tenants WROS (With Rights of Survivorship)
  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • Trust

Most accounts at TD Ameritrade fall under the broad categories of standard (taxable), retirement (tax-advantaged), education savings (tax-advantaged such as a 529 plan), businesses, and trusts.

Most people use TD Ameritrade to build their Individual investment account (taxable) because their 401(k)s and IRAs are usually have a tie-up with their employer.

If you want to achieve financial independence and retire before 59.5, it is crucial to build an taxable investment portfolio to produce passive income. You can't touch your 401(k) or IRA money without a 10% early-withdrawal penalty.

Below are the major investment categories you can invest in with TD Ameritrade:

  • Stocks – Access major global markets like the NYSE and NASDAQ, plus over-the-counter (pink sheet) stocks. While you can trade penny stocks, Investor Junkie doesn’t recommend this risky investment style.
  • Derivatives – Derivatives is best suited to veteran traders. There are many risks to derivatives trading that you should understand before buying in. However, you can quickly execute derivative trades and build complex, multi-leg derivative trades using TD Ameritrade’s platforms. I'm an investor in structured notes for downside protection.
  • ETFs – You can buy and sell exchange-traded funds just like stocks through your TD Ameritrade account. TD Ameritrade offers more than 300 ETFs commission-free. Just be aware that you have to hold them in your account for a minimum 30-day period to get the free trades.
  • Mutual Funds – Easily invest in top mutual fund families through your account. TD Ameritrade also offers thousands of mutual funds with no buying or selling fees.
  • Futures – Like options, futures are best left to the veterans of the investment world. If you can stomach the world of commodities, however, you can trade contracts with competitive pricing.
  • Forex – Foreign exchange isn’t just for vacations to exotic countries around the world. TD Ameritrade brokerage accounts support 24 currencies including the popular euro, British pound, Swiss franc, Japanese yen, and many others.
  • Bonds – Bonds are an integral part of a diversified portfolio. Their bond offering is massive.
  • Risk-free investments: High-interest money market accounts and CDs.

TD Ameritrade Education Resources

TD Ameritrade has a wealth of education resources for new and veteran investors alike. Before making any trade, it's important to thoroughly understand what you are investing in. The resources is one of the best things I want to highlight in this TD Ameritrade review.

For specific stock and other investment analysis, TD Ameritrade gives you access to New Constructs, Jaywalk Consensus, Research Team, Market Edge, S&P Columns, and S&P Research. These can help inform better investment decisions. Of course, you should always do your own analysis as well and should never invest in something you don’t understand or purely by a research report recommendation.

General education resources include articles, videos, webinars, courses, and live in-person events.

Related: The Proper Asset Allocation Of Stocks And Bonds By Age

TD Ameritrade Trading Platforms

TD Ameritrade offers investors various types of trading platforms depending on your level of experience and preference for trading. They are all free to use.

  • Web trading platform – The online trading system for TD Ameritrade is sufficient for most passive investors. You can log in and view your account, research investments, and enter trades through the TD Ameritrade website. It handles all of the basics and is ideal for newer investors and investors with less complex needs.
  • Thinkorswim – The award-winning Thinkorswim platform is ideal for experienced and active traders. This platform is on par with what many professional traders use every day. It supports a huge range of charts, customizable views, and analytics resources, as well as the ability to execute trades within the platform in a couple of quick clicks.
  • Mobile Trading – We live in a mobile, always-connected world. With TD Ameritrade and most online brokers, stepping away from the computer should not sever your connection to your investments
  • TD Ameritrade Mobile – The mobile app is available for major smartphone operating systems and even supports the Apple Watch. This feature is ideal for trading on the go and keeping tabs on your account. As with the web platform, it’s good for beginner to intermediate investors but does not support the powerful trading tools available in the other platforms.
  • TD Ameritrade Mobile Trader – The mobile companion to Thinkorswim gives you advanced trading features from the convenient location of your pocket with an Android or iOS device

Benefits Of TD Ameritrade

Below are the following benefits TD Ameritrade have to offer to online investors.

  • No Minimum Opening Deposit – One of the biggest advantages to TD Ameritrade is that the company requires no minimum investment to open a new account. You can fund an account with $50 or $100 and get started investing today. This makes it easy for investors both large and small to start investing immediately.
  • No Fees – Fees are a big consideration when you’re looking for an online broker. As of October 3, 2019, TD Ameritrade now charges $0 per trade. There are also no maintenance fees. Sometimes brokers will hit you with a $50 fee for not keeping a large enough balance in your account. That’s not the case at TD Ameritrade.
  • Investment Choices – TD Ameritrade offers just about every asset class that you can think of. You have plenty of mutual funds to choose from, with more than 13,000 different fund offerings. These funds can be used in your standard account or to start an individual retirement account (IRA) or a 529 plan to save for your child’s college. All of these accounts can be set up at TD Ameritrade.
  • Trading Tools – The Thinkorswim Trading Platform at TD Ameritrade has been voted the number one trading platform by Barron’s. With access to advanced mobile trading applications, on-the-go trading a breeze. The mobile applications are available for your phone, tablet, or Apple Watch.
  • Tax-Loss Harvesting – TD Ameritrade offers tax-loss harvesting, which can help you minimize portfolio losses with tax-efficient strategies.
  • Access to New Constructs Research – TD Ameritrade clients have long enjoyed access to investing and trading reports from the likes of Jaywalk Consensus, Research Team, Market Edge, S&P Columns, and S&P Research. But now they can also view reports and ratings on more than 10,000 investments courtesy of New Constructs. Some of the most elite institutions have trusted this research firm for years.

TD Ameritrade Review Final Verdict

As the first online brokerage, TD Ameritrade has the experience and expertise to be the #1 online brokerage platform today. Their user interface is great, they've got a fantastic selection of investment offerings, the cost to trade is low, and they've got tremendous research.

As someone who has spent over 20 years actively building passive income in order to stay retired, I believe TD Ameritrade is the best online brokerage firm today.

You can open up an account with TD Ameritrade.

About the Author: Sam worked in investment banking for 13 years at GS and CS. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income. Financial Samurai was started in 2009 and is one of the most trusted personal finance sites on the web with over 1.5 million pageviews a month.

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TD Ameritrade has not influenced the content of Financial Samurai. Financial Samurai may earn compensation for accounts opened at TD Ameritrade. TD Ameritrade review is a Financial Samurai original post.