TD Ameritrade 300

Is TD Ameritrade Safe and Legitimate Brokerage Firm? Is TD Ameritrade a Scam? Are Your Money, IRA and Investments Insured?



Is TD Ameritrade Safe?


We are being asked a lot of questions on a daily basis on various investment related topics. Some of our readers expressed the following concerns:

- Is TD Ameritrade a scam?
- Is TD Ameritrade safe company to keep money and investments?
- Is TD Ameritrade account FDIC/SIPC insured?
- Is it a member of FINRA/SIPC?

First, we have to point out that we get these questions for ALL brokerage houses, big and small, and TD Ameritrade is not an exception. After all, it's a company where 10 million of people keep their savings and investments, and after 2008 collapse of many investment banks (which some people mistake with online investing firms such as TD Ameritrade) a lot of people are nervous about the health of financial companies in general.

The short answer to all of these concerns is yes, TD Ameritrade is a legitimate, very safe brokerage house that has been in business for over 35 years. We have had account with them since 2002. We did have some issues with company's order executions in the past but no questions about legitimacy or safety of the company ever existed. In fact, TD Ameritrade is one of the three largest and best-known brokerage houses in the United States. The firm is reviewed every year by major financial magazines and it always gets high scores. You can read more about the company in our 2019 TD Ameritrade review under this link.

Thinkorswim is an online brokerage firm that got acquired by TD Ameritrade. The Thinkorswim brand is kept alive because its trading platform became the most recognized in the business. It is now one of the most widely used trading platforms among active traders. Read more about it in 2019 Thinkorswim review here.


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Is My Money Safe at TD Ameritrade?


In the article What happens if a brokerage becomes bankrupt we explain what happens to customers' money and investments if a brokerage firm goes into bankruptcy. Basically, all TD Ameritrade customer brokerage accounts are insured by SIPC in a very similar way that bank accounts are insured by the FDIC. In case of broker failure, customers will get back up to $500,000 each, including up to $250,000 for uninvested cash. This should ease the fears of investors nervous about the safety of their nest egg at the brokerage firm.


Is TD Ameritrade Insured And Regulated?


TD Ameritrade is a member of FINRA and SIPC. FINRA (Financial Industry Regulatory Authority - http://www.finra.org) is the largest independent regulator for all securities firms doing business in the United States. Its chief role is to protect investors by maintaining the fairness of the U.S. capital markets.

SIPC (The Securities Investor Protection Corporation - http://www.sipc.org) either acts as trustee or works with an independent court-appointed trustee in a missing asset case to recover funds. The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities that are already registered in their names or in the process of being registered. SIPC is an important part of the overall system of investor protection in the United States. While a number of federal, self-regulatory and state securities agencies deal with cases of investment fraud, SIPC's focus is both different and narrow: restoring funds to investors with assets in the hands of bankrupt and otherwise financially troubled brokerage firms.


Is Ameritrade Safe?


TD Ameritrade BBB Rating


TD Ameritrade BBB (Better Business Bureau) rating is A+. You can see the TD Ameritrade BBB information under this link.

Total closed TD Ameritrade Better Business Bureau complaints is 83. Here is a breakdown: Problems with Product/Service - 57, Advertising/Sales Issues - 16, Billing/Collection Issues - 5, Delivery Issues - 4, Guarantee / Warranty Issues - 1. Not bad for a company with 10 million customers!


TD Ameritrade Bankruptcy


TD Ameritrade is not in or close to bankruptcy. They have very profitable and sound business model.


TD Ameritrade Review




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Trade free for 60 days + get up to $600.


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TD Ameritrade IRA Trading Fees


The broker's regular commission schedule applies to retirement and non-retirement accounts alike. The cost of trading ETF's and stocks is $6.95. A human broker is available to help clients complete a trade over the phone. Using this service is a very steep $44.99. Alternatively, traders can place a trade over the broker's automated phone system for a more reasonable $34.99.

TD Ameritrade offers a list of approximately 2,000 mutual funds that carry no load and no transaction fee. These NTF funds offer retirement savers some good investment options, such as inflation-protected bonds and REIT's. There are more than 11,000 mutual funds in total at TD Ameritrade. Transaction-fee funds carry a $49.99 charge, which is applied to purchases, sales, and exchanges.

NTF funds with TD Ameritrade must be held at least 180 days, or the broker will consider the sale to be a short-term trade. In this case, there is a $49.99 fee. However, ProFunds and Rydex fund families are exempt from the short-term trade policy.

Target date mutual funds are available at TD Ameritrade. These funds are designed for retirement savers. Investors can choose from several different fund companies, including Vanguard, T. Rowe Price, and Wells Fargo. Some of the target date funds have no load and no transaction fee.

Retirement savers will also find over 296 exchange-traded funds at TD Ameritrade that are free to trade. All of these free-to-trade funds have expense ratios below 1.00%. Some are below 0.10%. There are several that have portfolios that would be ideal for retirees, such as investment-grade bonds and blue chip stocks.


Is TD Ameritrade Legit?


TD Ameritrade IRA Fees


TD Ameritrade offers its clients no-fee IRA's. This promise of no fees includes no setup fee, no annual fee, no inactivity fee, no account maintenance fee, and no low-balance fee. All TD Ameritrade IRA's, including custodial IRA's, have the same fee-free structure. There is no fee to close an IRA, and there is no minimum opening deposit requirement for any retirement account.


TD Ameritrade reviewed by Brokerage-Review.com. Rating: 5