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Written by Matthew Cerminaro on December 1, 2020
Category: 
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TD Ameritrade Review 2021: Best Brokerage Platform?

Investing has been made easy and cost-effective now that online brokers that have enhanced their services for eager investors.

There's almost an overload of options on the market today if you are looking for a new broker or are just getting started in the investing game. From Robinhood to M1 Finance to Betterment and so many more, each have their own distinguishing pros and cons.

It’s an exciting time for investors as the stock market has continued to reach new highs. Today, TD Ameritrade stands out as one of the most popular online brokers.

Let's take a close look at some of TD Ameritrade's features, fees, pros, and cons to help give you a close-up look at what the platform brings to the table. We'll get started with some backstory on TD Ameritrade to see what the broker is all about, and then jump into some of its industry-leading features! 

Summary: TD Ameritrade Review

  • $0 commissions on stocks and ETFs 
  • $0.65 per-contract commission on options
  • Industry-leading stock research offered on the platform 
  • ThinkorSwim is a highly technical trading platform perfect for high-frequency traders 
  • Income calculator lets you track monthly dividend payments 
  • Dividend Reinvestment Program (DRIP) lets you reinvest dividends and cost-average into your investments 
  • Two apps, TD Ameritrade and Thinkorswim lay out all of the features of TD at the convenience of your fingertips 
  • Very well-regarded customer support 

What Is TD Ameritrade?

TD Ameritrade Logo

TD Ameritrade is an online broker that offers stock, option, and ETF trading to its users. It is both sophisticated yet easy to use. This makes it a solid choice for people with experience in the market but want a simpler platform for trading.

TD Ameritrade
  • ThinkorSwim
  • Stock Research
  • Customer Support
  • Low Fees & Commissions
  • Assets
4.7

Summary

Overall, TD Ameritrade and its ThinkorSwim platform accomplish what they set to do; provide services to its users that are cheap and effective, all in an easily understandable way. This platform is great traders looking for a tactical trading platform, zero commissions, and industry-leading research. However, If you are more of a passive investor that is looking for a highly automated investing process, you may find more value in a different broker. 

Pros

  • $0 commissions on stock and ETFs offered 
  • Tactical trading platform for savvy traders and investors looking to gain an edge on market participants 
  • Two mobile apps to simplify all of TD Ameritrade's features 
  • $0 account minimum, perfect for smaller investors who are just getting started
  • Educational resources offered on its website 
  • Income calculator for dividend investing 
  • Dividend reinvestment (DRIP) on stocks and ETFs for optimal cost-averaging 
  • Very well-regarded customer support

Cons

  • High margin rates relative to comparable companies within the brokerage industry 
  • $0.65 per-contract fee on options 
  • No bonds or CDs offered through the broker 
  • Broker-assisted trades are costly, coming in at $25 per trade 

TD Ameritrade Mission 

TD Ameritrade's mission is to help people become financially free and successfully manage their finances.

That is why TD Ameritrade has a wide range of features to help investors. TD Ameritrade has a lot to offer, from investment products to learning tools and resources on its website. Speaking of features, let's dive into some of the most important ones now! 

TD Ameritrade Features 

TD Ameritrade's features are what make it unique and stand out from competitors. And did I mention they can all be accessed on an easy to use mobile app, compatible with both IOS and Android devices? Yes, TD offers this too! 

TD Ameritrade App 

The TD Ameritrade App gives users access to all of its features from the convenience of your smartphone.

Some of the features on the mobile app that you can access include:

  • Checking your account history
  • Researching stocks
  • Learning about the stock market
  • Reviewing various trading strategies                                                                                                                                                                                                                                                          

ThinkorSwim App 

As mentioned, ThinkorSwim gives people a detailed platform decked out with charting features, technical analysis, important news flow, and so much more.

I have only had positive experiences with ThinkorSwim in my time as a user of TD Ameritrade's brokerage services. Previously, I have used the ThinkorSwim platform to chart out stock patterns and the technical tools to help me make my trades.

When it comes right down to it, I highly recommend the ThinkorSwim platform to anyone who is interested in both day trading and technical analysis! And don't worry, if you are brand new to trading/investing, you can practice with ThinkorSwim's paper trading feature.

td thinkorswim

Paper Trading 

It's well worth your time to practice your skills by paper trading. This is something not every platform offers!

Paper trading gives you a simulated trading account with fake money. Almost like the game Monopoly, you can use fake money to make trades with real-time stock quotes. Paper trading is so important because it gives newcomers a chance to practice and test out their trading strategies.

As the saying goes, "practice makes perfect," and TD Ameritrade offers you a way to hone your skills. 

$0 Commissions 

It goes without saying that keeping your upfront costs low when investing is an important strategy.

Well, luckily for you, TD Ameritrade feels the same way. Offering $0 commissions on stocks and ETFs, you won't have to worry about excess commissions eating up your principal investments! 

$0 Account Minimum 

Another fantastic feature that supports TD Ameritrade's mission to keep costs low is its $0 account minimum policy.

For no money down, you can open a brokerage account with TD Ameritrade and begin investing with as little or as much money as you desire! 

Dividend Reinvestment 

TD Ameritrade offers dividend reinvestment (DRIP)  for all stocks and ETFs.

DRIP lets you take the excess dividends that you earn on your investments and reinvest them back into the underlying security. This strategy is great for passive, long-term investors looking to dollar-cost average returns back into their securities to obtain optimal long-term performance.

In essence, whenever a company pays its dividend, you will buy a partial share equal to that of the dividend payment. Whether the stock is up or down, it does not matter, and this is why DRIP is so important.

Whether you are buying low or high, the long-run goal is to passively invest slowly into the underlying security, and DRIP investing on TD Ameritrade will let you do that. 

Income Calculator 

Speaking of dividends, TD Ameritrade's income calculator helps you map out your dividend payments to keep your eye on your accounts. You can also use this feature to look at your total portfolio dividend percentage, and also what stocks pay the most in dividends.

Stock Research 

TD Ameritrade's stock research is extensive, to say the least. An in-house research team that even gives company reports to Credit Suisse's world-renowned team does their own analysis, giving TD Ameritrade users this info for free! 

td mobile trading

Customer Support 

TD Ameritrade's customer support network is extensive. Around the clock 24/7, you can talk to a live rep to submit trades, ask questions, help you opening an account, and so much more.

Simply call the toll-free number and you will be redirected to a TD rep, waiting to help! 

TD Ameritrade Fees 

While TD Ameritrade does work to keep its costs low, there are still some fees that you should be aware of before opening up an account. Here are some important fees to look out for when opening a TD Ameritrade brokerage account. 

Option Fees 

While TD Ameritrade does offer options contracts on its platform, you will be paying a per-contract fee for every options contract you decide to take.

The per-contract fee is $0.65 and is fixed no matter what the premium is on the option you are trading. 

Margin Rates 

TD Ameritrade's margin rates vary depending on the amount of margin you are taking out.

Scaling from 9.50% for under $24,999, and 7.50% for margin between $250,000 and $499,999, the amount of interest that you will pay really depends on how much margin you are looking to borrow. 

Broker-Assisted Trades 

Sure, trading through TD Ameritrade is free of charge (for stocks and ETFs), but will have to pay a fee of $25 for broker-assisted trades of any financial product on TD.

This includes stocks, options, and ETFs. While this may be a steep price for some, if you are looking to make a big trade and want a broker's advice/opinion this may be an option that is worth it for you. 

The Final Verdict

Overall, TD Ameritrade and its ThinkorSwim platform accomplish what they set to do; provide services to its users that are cheap and effective, all in an easily understandable way.

This platform is great traders looking for a tactical trading platform, zero commissions, and industry-leading research. However, If you are more of a passive investor that is looking for a highly automated investing process, you may find more value in a different broker. 

At the end of the day, it all comes down to what you see as important in a broker, and you should base your decision to use TD Ameritrade based on that thinking! 

We hope that by delivering this review, you will assess the prospects of the broker and make the best decision for yourself. 

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td ameritrade review
Article written by Matthew Cerminaro
Matt is currently attending Union College pursuing a Bachelor of Arts in Economics. He participates in the student investment fund and is a member of the Union College football team. Matt runs his own personal finance Instagram page and market-related blog where he writes about economics and general wealth accumulation tips.

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