Broker Excellence Profile: TD Ameritrade

Estimated read time: 5 minutes

You feel like the time is right for you to take the plunge and invest in some stocks, or at least explore other investment options outside of the plan you're offered in your workplace, and you have been intrigued by the ads you've seen for TD Ameritrade.

The company has its hand in a little bit of everything as far as investing goes, but it also offers several other services.

If you want to invest but aren't sure how to start the process, TD Ameritrade may be a good fit.

TD Ameritrade Overview

TD Ameritrade is a giant among online brokers. With currently more than 11 million investor accounts, the company has come a long way since it was established in 1975.

Although TD Ameritrade may be best known as a place to buy and trade stocks, the company offers much more than that. Whether your goals are making short-term trades or looking at your long-term retirement picture, Ameritrade can do it all.

If you're looking for supportive financial services, the broker does offer some simple banking services such as online bill pay and mobile check deposits.

While some people may be intrigued by TD Ameritrade's online presence, other would-be investors might prefer stopping by a branch office. While some online brokers don't have brick-and-mortar locations, TD Ameritrade has more than 350 locations, which makes it readily accessible for investors.

Opening an account with TD Ameritrade can be done quickly online in five steps. You'll need basic information such as your Social Security number and your employer's name and address. You'll have to decide what type of account you want, and the website has information on what each type entails.

Who Should Use TD Ameritrade?

If you want to invest but aren't sure how to start the process, TD Ameritrade may be a good fit. They have enough material and resources on their website to help newbies learn the ropes of basic investing, so if you want to ease into this new adventure, you may like the advice and knowledge you can gain from TD Ameritrade.

Beginners may also be more hesitant to invest too much money before they learn a bit more about what they're doing. That's where this company really stands out. You don't have to reach an account minimum to get started. That's good news for someone who realizes the importance of investing when it comes to their long-term overall financial picture but has more enthusiasm right now than funds.

Although it has a relatively high per trade cost, TD Ameritrade is also a good home for advanced traders because all the information they need to make informed decisions is provided for them and is easy to find.

TD Ameritrade: Pros & Cons

Even with the large volume of business TD Ameritrade does, there are bound to be drawbacks. The pros are a much longer list, however. Let's look at the ins and outs of doing your investing with this online broker.

Pros
It has branch locations for people who want that personal touch when they invest in business endeavors online.
Because of the extensive tools and information on the site, it helps newcomers to the investing world feel more comfortable. Anything that makes investing less intimidating and brings more people into the fold is good in our book.
Everyone has access to the educational materials — you don't have to spend a certain amount to unlock that feature.
You don't have to have a certain amount of money to get started, so TD Ameritrade is a possibility for any type of budget. You can start with a small amount when you need access to cash and don't want to put too much into your new trading account.
It gives you a wide variety of products to choose from, including bonds, stocks, ETFs, futures, options, mutual funds, and more.
They won't charge inactivity fees.
They have a platform that lets you set up a mock trading account. That takes all the risk out of establishing a learning curve when it comes to trading and developing strategies.
Cons
Charges $6.95 per trade, which is pricier than some of its competitors. For contracts for options trading, you'll pay the $6.95 plus another 75 cents per trade.
If investors want to do some short-term trading, the fees are even worse. If you get an ETF commission-free, you have to retain it for a minimum of 30 days or pay a trading fee of $13.90.

Does TD Ameritrade Beat Competitors?

In many ways, TD Ameritrade is a better pick than some of its competitors. The fact that it gives an easy introduction to buying and trading gives it an advantage over some other companies.

Even better is the fact that you can start an account with as little funding as you want — there aren't many other brokers that give you that option. Most will charge a minimum of at least $500, such as TD Ameritrade's competitor ETrade. Other companies may require a minimum deposit of a couple of thousand dollars.

When it comes to the information TD Ameritrade offers its customers, it's hard to beat. Few other competitors are as diversified with the information they offer, and there's stuff you can learn in every format — you can watch videos to teach you the ropes, takes quizzes to help you identify your goals, and read articles.

You can reach out to a live representative or visit a branch office. TD Ameritrade's customer service and educational materials are much better than what you'll get with many other sites.

The only way TD Ameritrade doesn't stack up to its competitors is with its price per trade. While it is the same price per trade for low-volume traders as ETrade is, it's still more expensive than other brokers. You can find other sites that only charge $4.95 per trade, but, for some people, the extra information they'll have access to on TD Ameritrade makes it worth the money.

Is TD Ameritrade For You?

If you're a beginner and you feel like you're going to need a lot of hand-holding to figure things out, TD Ameritrade may be a good pick for you. With all their resources, you'll learn as much about the trading world as you want to.

Because the fees are higher, you have to look at what's important to you in a broker service, and go from there.