TD Ameritrade Review

TD Ameritrade Ratings at a Glance

TD Ameritrade is one of the top discount brokers in the United States. Among active traders, they’re best known for their extensive ThinkOrSwim trading platform. Primary services include equities and options, but they also offer futures, forex, fixed income, mutual funds, etc. With a TD Ameritrade brokerage account, you can begin investing, manage your money and gain some financial freedom.

Charles Schwab Acquisition

In 2019 Charles Schwab announced they would be acquiring TD Ameritrade in 2020 with an astonishing $26 billion dollar deal. Schwab plans to transfer all TD Ameritrade accounts and assets over to its platform by the second half of 2023. With the Schwab transition imminent, it’s important for traders to know what they’ll be getting in the future.

Why TD Ameritrade Over Others?

When you visit TD online, you can register for an account, start investing, or learn about the markets. Avail yourself of the TD Ameritrade premarket trading hours, regular trading hours and aftermarket options, allowing you to trade 24/5 and build your portfolio from the ground up.

TD Ameritrade offers the best of both worlds. On one hand, 0-commission trading along with a vast library of educational articles and videos makes TD Ameritrade ideal for new investors. On the other hand, the Thinkorswim platform gives accomplished traders the tools needed to do everything from options trades to selling livestock futures at 3 a.m. 

Top Reasons to Choose TD Ameritrade

• Investment products and services for all types of investors: Multiple trading platforms across a variety of accounts gives everyone a choice. Companies can use TD Ameritrade to set up 401(k) plans or SEP IRAs, parents can open Coverdell ESAs or 529 plans and individual investors can open Roth IRAs or standard brokerage accounts.

• Wide variety of tradable asset classes: TD Ameritrade clients can trade stocks (including OTCs), ETFs, mutual funds, bonds, options, futures and currencies.

• Exceptional customer service: The company offers 24/7 customer support through via phone and email. Live chat support is available during working hours, plus there are 275 physical branches nationwide.
• New account customer service number: 800-454-9272
• Existing account customer service number: 800-669-3900

TD Ameritrade Quick Summary

How to Open a TD Ameritrade Account

Opening a TD Ameritrade account is a fairly simple process, but there are a few things to consider along the way.

1. Visit the TD Ameritrade site

Go to the top right corner and select Open New Account or choose the Open New Account tab in the bottom right.

2. Choose the type of account you want to open

For your purposes, you’re likely opening an individual account. However, you can choose from a range of accounts that help you invest for your kids, plan for retirement, etc. If you need assistance, you can click on Find an Account.

3. Enter your information

As you can see, you will:

• Enter your personal information
• Enter your financial information
• Review your information
• Sign TD’s investment account agreements
• Create a User ID and password

At this point, you can log in, fund your account and begin investing.

The first question for most traders is the same: Is TD Ameritrade Free? Yes and no.

Like most discount brokers, TD Ameritrade charges high margin interest rates. Margin trading is when your broker loans you some of their cash to buy securities. For the duration of the post-settlement period as you hold those securities on margin, your account accrues daily interest charges.

Learning how to use TD Ameritrade, then, it more about maximizing the investments you prefer and avoiding excessive margin trading. Some investments are worth the margin interest rates you’ll pay, but some are not.

Here’s TD Ameritrade’s margin rate table, as of May 2022:

Here’s how margin works. If you have $9,000 in your TD Ameritrade account but you want to buy $18,000 worth of SPY, use your $9,000 in cash and TD Ameritrade lends you the other $9,000. Just like any other loan, you’re charged interest on your balance. Currently, TD Ameritrade collects an annualized rate of 10.25% for margin loans under $10,000, accrued daily. So, your daily financing cost would be (9,000 * .1025) / 360 = $2.5625.

That might not seem like a lot. But, if you’re paying a 9.5% interest rate to trade stocks, you need money coming in because the average annual return of the S&P 500 is roughly 8%, so you have to beat the market just to break even on a typical margin loan.

Remember, you aren’t charged until the loan closes. For US stock trades, that’s T+2 (2 business days) following the transaction. In other words, if you buy a stock Tuesday, you don’t start paying margin interest until Thursday. If you close your position before then, you don’t pay any margin interest.

Managing your money outside of the markets is just as easy as investing. TD Ameritrade withdrawal fees only apply to full account transfers or certificate withdrawals. You can perform any of these functions online or through the TD Ameritrade app.

Stock and ETF Commissions at TD Ameritrade

Stock commissions at TD Ameritrade are free. They’re subsidized by payment for order flow, which means that TD Ameritrade might send your order to a market maker, rather than an official exchange or ECN. This could increase transaction costs for highly active traders who are trading on low time frames, but for most traders, it saves them from paying $5 ticket charges on each side like the old pre-2019 days of retail brokers.

If you’re a highly active day trader, it might be worth paying a small commission rate to a broker that allows you to directly route your order to the exchange you please. There are no real quantitative studies on this, but most traders who are really active on the 1-minute and 3-minute charts say that paying for commissions is worth it, because their all-in transaction costs (factoring the better order fills) are lower. It really comes down to your strategy and the type of stocks you trade.

Options Commissions at TD Ameritrade

TD Ameritrade charges $0.65 per contract for options trades. This is in-line with the rest of their peers. Here’s a table displaying the per contract fee charged by the top brokers:

For the most part, options commissions are pretty similar across the board, but Tastyworks has something unique to offer traders who trade a lot of multi-legged options spreads like Iron Condors and Butterflies. Additionally, each leg caps at $10, meaning that, for example, the max you can pay for an Iron Condor of any size is $40.00, even if you trade a few hundred contracts per leg.

However, for most traders that just buy some options to hedge or speculate, or maybe trade a few vertical spreads per month, the more important choice is which broker fits your needs the most, rather than scalping a few extra dollars out of your monthly commission costs. You can’t decide TD Ameritrade vs Fidelity, for example, by comparing a single fee. You need to know more about what the platform can offer you.

TD has developed a user-friendly platform and tries to appease investors of all shapes and sizes. From account signup to trade execution, the process is smooth and painless. New accounts can be opened in minutes and a variety of different options are available, including retirement vehicles like the traditional TD Ameritrade IRA, TD Ameritrade Roth IRA or custodial accounts like UTMA/UGMA and 529 plans. 

TD Ameritade’s commitment to usability and client satisfaction is unmatched in the industry. Here are 3 features that make it a fan favorite:

• Easy onboarding: New to TD Ameritrade? They’ll have you up and running in minutes. You can fill out the application online. Standard brokerage accounts can be opened, electronically funded (possibly with an Ameritrade offer code) and ready for trading all on the same day. Non-margin accounts have no minimum deposit to open and equity trades are commission-free. If you aren’t computer-savvy or simply want a helpful hand, new client account specialists can be reached 24/7.

• Instruction and guidance: TD Ameritrade has an abundance of materials teaching users how to use the various platforms. For example, Thinkorswim is an intricate trading platform that comes with a bit of a learning curve, especially for new users. But TD offers a complete Thinkorswim Learning Center with how-to articles and videos covering all the platform’s impressive features. In the Getting Started chapter, you’ll get tutorials showing how to use keyboard shortcuts, customize the platform and use interactive elements like Active Trader. In fact, there’s a how-to article for every single tradable security available on Thinkorswim. And even if you stump the FAQ section, TD Ameritrade customer service reps are standing by 24/7.

• Powerful trading tools: Getting new investors up to speed and ready to trade is a crucial part of TD’s mission, but they also appeal to the professional demographic of traders. And with those traders in mind, it has done some serious platform development. Few brokers offer trading tools of comparable power to Thinkorswim, which was voted #1 trading platform for both desktop and mobile by Stockbrokers.com. Experienced traders can get Level II quotes, direct market access, and different order types to execute trade with speed and precision. Over 300 different charting tools can be integrated into your research, plus probability and risk analyzers allow trades to be simulated with expected outcomes. Usability is a two-way street — investors need tools commensurate with their skill level.

TD Ameritrade does great work educating its clients both on how to use its various platforms and about the market as a whole. By leveraging the resources available in these libraries, TD clients can better develop their investment goals.

• Research reports from reputable sources: TD Ameritrade has research and news updates from sources like Morningstar, Barrons, MarketWatch, S&P Global and more. You’ll get the latest news on earning reports, economic data and current events delivered right to your screen.

• Learning center for platform how-to’s and demos: Is Thinkorswim too intimidating for you? Perhaps it wouldn’t be after a little demonstration. The Learning Center at TD Ameritrade is loaded with how-to articles and video demonstrations showcasing its signature trading platform, as well as the standard web platform and mobile app. You can also test your skills using a Thinkorswim paper money demo, helping you get an idea of how the market works when you’re actively trading. What if you want to learn how to short a stock on TD Ameritrade? That information is available.

• In-depth educational materials on markets and trading: Do you know the difference between technical and fundamental analysis? Are you unsure which retirement savings vehicle best suits your investment strategy? If you have questions about markets and investing, TD has answers. A whole stock investing curriculum is available for both current and prospective clients, plus tailored education sections on retirement planning, investing for college and preparing for taxes.

Ameritrade has several ways to get in contact with their support staff. The easiest way to get in touch is via phone. Call the TD Ameritrade customer service number (1-800-669-3900) for 24/7 phone support for both new and existing clients. Finding an exact email address is difficult though — you’ll just be directed to a form located on the website, which means a back-and-forth email conversation is difficult. Text support is also available, but live chat options only occur during normal working hours.

Since TD Ameritrade appeals to traders of all levels, it has a variety of securities to trade. In addition to equities like stocks, ETFs and mutual funds, TD Ameritrade offers futures, forex and options trading. It also provides clients access to IPOs, annuities and new bond issues. The broker is working on a cryptocurrency futures trading market but it’s not ready for use yet.  

TD Ameritrade Stocks, ETFs and Mutual Funds 

TD was one of the first brokers to offer commission-free ETFs, a list which numbered close to 300 before they all went commission-free last year. Now you’ll get access to stocks from across the globe without paying commission, plus 2,300 ETFs and 13,000 mutual funds. Use a specialized securities screener to categorize by sector or regional exposure, net and gross expense ratio, or more than a dozen other criteria. Note that some mutual funds still carry load fees and you’ll pay a penalty for short-term trading.

At TD Ameritrade, fractional shares are available for investors on a budget. You might even invest in the TD stock (NYSE: SCHW) if you like.

TD Ameritrade Forex 

Forex trading is a breeze on Thinkorswim and Ameritrade has more than 20 currencies to mix and match. Over 75 forex pairs are available, including some rarer pairs like ZAR/JPY and USD/THB. Forex trades aren’t charged commission, but spreads can vary. Forex trading takes place 24/6 and all positions must be liquidated at the end of the night. You’ll need a margin account and access to options and futures to trade currencies.

TD Ameritrade Options 

Ameritrade clients can trade options when granted access to margin. Options traders using Thinkorswim have a plethora of tools at their fingertips — options screeners, probability analysis tools and the ability to orchestrate complex multi-leg trades. Options strategies like straddling and iron condor can be researched in the education center and implemented on Thinkorswim. Options are traded commission-free but each contract carries a $0.65 fee. 

TD Ameritrade Futures

Trading futures on TD Ameritrade requires margin access, however the list of tradable contracts is impressive for a discount broker. Clients can trade futures on interest rates like the U.S. 2-year and 10-year, metals like gold and silver and even softs like orange juice and sugar. Overall, 9 different categories are listed and over 70 contracts of various products can be traded. And yes, you can trade Bitcoin futures. 

Futures and options on futures both carry a $2.25 charge per contract, plus another $0.02 per contract in regulatory fees from the National Future Association (AFA).

TD Ameritrade has expensive margin rates for accounts with balances under $25,000, so derivatives trading won’t be worth the hassle for most investors. But inaccessible asset classes are a thing of the past and Ameritrade allows even small-time, mom-and-pop investors to dabble in various types of trading.

TD Ameritrade actually has 3 mobile apps for clients — the standard TD Ameritrade Mobile app, the more advanced TD Ameritrade Mobile Trader, and the mobile version of the Thinkorswim trading software. There’s something for everyone in here; the standard app is great for beginners while the Mobile Trader and Thinkorswim apps provide tools for advanced investors like day traders. The difference in user experience between desktop and mobile is virtually nonexistent and all 3 apps are available for both iOS and Android.

TD Ameritrade Mobile

The standard app is the easiest to learn and navigate. You can view your account info, set up watchlists with as many as 50 different stocks per list, and use charting tools like moving averages, RSI, MACD and Bollinger bands. Real-time news updates from sources like Dow Jones, MarketWatch and BusinessWire are sorted based on your holdings and watchlists. All screens and features are completely customizable and chat support through the app is available 24/7.

TD Ameritrade Mobile Trader

Mobile Trader has all the accessibility of the standard app with the tools necessary for complex trading strategies. You have access to all your watchlists and account info, plus all the charting tools from the standard app. Mobile Trader allows you to use 300 different technical indicators.

Indicators are grouped by strategy such as Momentum, Volatility, Trend, and Bullish/Bearish Candlestick patterns. You can even use studies from famous investors like David Elliott and John Carter. Paper trading is also available for traders who want to test new techniques without risking real cash. Note that Mobile Trader will be merged with the Thinkorswim platform later in 2020.

The ThinkOrSwim Platform

TD Ameritrade’s biggest value proposition for active traders. Outside of the platform, their commissions and fees are similar to their peers at Schwab and E*TRADE.

Options Analytics

ThinkOrSwim does options analytics better than most retail charting platforms.

There’s plenty of platforms that throw plenty of statistical models and data at you that really only apply to the most quantitative of options traders. We prioritize useful, contextualized data because that’s what’s useful to the vast majority of options traders.

As an example, let’s run through a trade analysis process. This isn’t meant to be a real trade, so just take it with a grain of salt. Perhaps we’re watching Carnival Cruise Lines (CCL), which obviously has been one of the most consistently in-play stocks over the last year. It’s peers, Norweign and Royal Carribean just reported earnings and the market didn’t move much. Perhaps we’d like to take advantage of the high implied volatility in the options to sell some premium at a defined risk.

But we want to know the historical relationship between CCL’s implied volatility in comparison to it’s realized volatility, as well as how the stock has responded to earnings and earnings expectations. This is really simple in ThinkOrSwim, just go to Analyze > Earnings. Below is an example in CCL.

We’d say that the only two platforms that can hold a candle to ThinkOrSwim are Interactive Brokers’ Trader’s Workstation (TWS) and the TastyWorks Platform. However both have their drawbacks.

TWS is infamously outdated and has a pretty steep learning curve. It’s not at all intuitive compared to modern software. But there’s real power under the hood. Traders utilizing more quantitatively-minded options strategies will prefer TWS because of how much in the way of analytics they provide.

Tastyworks benefits from a much cleaner and more intuitive user interface, but traders utilizing complex strategies will find it wanting.

Their screener is very limited, not even allowing you to screen a universe of stocks based on criteria. You instead have to create your own watchlist and filter that down. In other stock screeners, you apply some filters and the screener searches the entire database of thousands of optionable stocks to find fetch stocks that meet your criteria. As we’ve said in our TastyWorks review, the Tastyworks Platform is very much suited to the style of options trading made famous on the TastyTrade network.

Depth Of Market (Order Book) and Level 2 In ThinkOrSwim

Traders that use order flow or level 2 heavily will be disappointed with ThinkOrSwim because they don’t have a Nasdaq TotalView subscription option available. For those unaware, Nasdaq TotalView displays 20x the liquidity that level 2 displays, according to Nasdaq.com.

Just a note, if you want level 2 data, you have to manually enable it under Client Services > My Profile > Subscriptions. At this time it’s free.

ThinkOrSwim Charting

When it comes to broker trading platforms, it’s difficult to compete with ThinkOrSwim’s charting. Under the hood of this dated application, there’s heaps of functionality that should serve as more than enough for the majority of traders.

Pros:

• Several charting options like market profile, equivolume, Heiken Ashi, and seasonality.
• Use ThinkScript to add custom alerts or indicators
• Can display up to 32 charts per screen!
• Can create custom symbols using arithmetic (i.e. SPY-QQQ)
• Lots of market internal symbols like $UVOL (cumulative up volume) and $TICK (net number of upticks - downticks)

Cons:

• Can’t do ratio charts (i.e. SPY/QQQ)
• Can’t fluidly zoom with the mousewheel like you can on TradingView
• Doesn’t automatically load historical data (must choose a date range (i.e. 1 year, daily chart)

We’ve heard ThinkOrSwim described as a “blueprint for the market,” and we definitely agree. There’s a bit of a learning curve to get it working exactly the way you like it, but it’s all pretty intuitive once you’ve used it for a few days.

ThinkScript: The ThinkOrSwim Scripting Language

ThinkScript is ThinkOrSwim’s proprietary scripting language, which basically means they took a preexisting programming language and simplified it enough so mostly anybody can figure out how to use it.

The idea of learning a programming language might be a bit intimidating to many, but ThinkOrSwim made it very simple to start messing around and figure things out.

Many traders use ThinkScript to code an indicator that aids their strategy, but doesn’t currently exist, while others will build alerts to ping them whenever a certain trading setup is occurring. It’s pretty flexible, and you can even use it to create custom scans. Below is an example of using the custom Keltner Channel indicator we created in the above video to run a scan looking for stocks with a closing price above the upper price band:

TD Ameritrade vs. Interactive Brokers

Comparing TD Ameritrade and Interactive Brokers is natural considering how similar their services are. However, IBKR is not backed by a massive bank while TD Ameritrade is a unit of TD Bank—one that bills itself as America’s most convenient bank.

When comparing the two platforms, you will find that these areas are quite similar:

• Education
• Research
• Mobile app
• Tools
• Offerings

Mutual fund fees are quite different, with TD Ameritrade charging $74.95 per trade while Interactive Brokers charges $14.95 per trade. Futures trades are $2.25 per contract with TD while IBKR charges $0.85.

Interactive Brokers offers 4 crypto assets while TD Ameritrade has not yet entered the crypto market, and it costs $75 to transfer money out of an IRA with TD Ameritrade while IBKR is free.

However, TD Ameritrade offers advisory services while IBKR does not. You can try the retirement calculator on the TD Ameritrade to plan for the future, and TD averages 500 webinars monthly.

The two differ greatly when you look at margin rates. TD Ameritrade charges higher margin rates, but it’s unfair to single out TD here, because virtually all of their competitors charge similar margin rates, except for Interactive Brokers, which is well known for charging the lowest rates in the retail brokerage industry. For reference, as of January 2022, a trader with an IBKR Pro account would pay 1.58% for that same $9,000 margin loan at TD Ameritrade that accrues 9.5%.

TD Ameritrade is an award-winning brokerage that makes life easy on clients, regardless of their income or skill level. Seasoned traders get the terrific Thinkorswim platform for complicated analysis and complex derivatives trading, while novices get a user-friendly desktop platform and mobile app abundant with investment education materials. Either way, there are investment options and account types to support you and your investment choices. 

While a crypto platform at www.tdameritrade.com is not yet available at this time, it may come online in the future. Additionally, there are very few TD Ameritrade restrictions on securities, and they are listed clearly on the website.

What’s more, you can spend your earnings with the TD Ameritrade debit card as if they were held by a traditional bank.

You can open any kind of account you want with TD, trade any type of security this side of Bitcoin, and all of it without commission costs or platform fees. Derivatives traders might find cheaper ways to move options and futures contracts, but most clients will simply want to buy and sell stocks and ETFs. For those types of investors, putting out a better product than TD Ameritrade is a very tall task.

Frequently Asked Questions

Methodology

For brokerage reviews, Benzinga created a weighted scale based on the following criteria: usability, services offered, customer service, education, research, mobile app, account minimums and fees. We aim to provide the most up-to-date, impactful and trustworthy reviews. For an in-depth look at our process, read the full methodology process.