Is TD Ameritrade a Scam?
Most people are probably familiar with the name TD Ameritrade. TD Ameritrade is one of the most
popular brokers in the U.S. In this article, we will examine if TD Ameritrade is a safe and
legitimate company and provide a brief review of them.
TD Ameritrade Company Overview
TD Ameritrade has been in business for over 40 years and is one of the largest brokers in the U.S.
today. TD Ameritrade was also a publicly-traded company for many years.
According to its website, TD Ameritrade has over
11 million client accounts and over $1 trillion in assets under administration. They provide custodial services for over 6,000 investment advisors. On average, their client base places a total of over 500,000 trades per day. According to Charles Schwab’s 10-K annual report from last year, TD Ameritrade generated over $7 billion of revenue in 2021.
Is TD Ameritrade Legitimate?
Operating in the financial industry and more specifically operating as a broker/dealer, TD Ameritrade is an extremely highly regulated company. There is a long list of regulators that oversee TD Ameritrade’s business. The main regulators include the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the U.S. Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), the Internal Revenue Service (IRS) and state securities regulators.
With this many eyeballs constantly monitoring every move that TD Ameritrade makes and with how
long TD Ameritrade has been in business, it is
virtually impossible for TD Ameritrade not to run a legitimate operation and be running a scam. In addition to all its regulators, TD Ameritrade is also voluntarily registered with the Better Business Bureau.
TD Ameritrade Reviews & Complaints
Any company that has been in business for over 40 years and is the size of TD Ameritrade is going
to have some history of negative reviews and complaints. The good news is that there are a few
different public resources that anybody can use to browse through the customer reviews and
customer complaints about them.
TD Ameritrade has had a profile with the Better Business Bureau (BBB) since 1980 and
they have an
A rating. They have 427 complaints against them that have been closed in the last three years
(extremely tiny number considering 11 million customers) and
the details of all the complaints are open to the public for review. They have a 1.14 out of
5-star customer review score however, that is over an extremely small sample size of only 36
customer reviews. And let’s be honest, most customers taking the time to submit a review are
probably the angry ones.
Like all brokers, TD Ameritrade has a public profile with FINRA. Their CRD# with FINRA is 7870
and anybody can use this number to view their profile. They have a total of 201 disclosures on
their FINRA profile.
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TD Ameritrade Awards & Accolades
TD Ameritrade has stacked its trophy case with many credible awards in the brokerage industry.
Most recently in 2023, TD Ameritrade was awarded by Investopedia as
best broker for customer
service, best broker for beginners, and best mobile app. TD Ameritrade was also awarded by
major financial magazine as number one in 2023 in six categories including Platforms & Tools,
Desktop Platform, Active Trading, Options Trading, Customer Service, and Phone Support. To top all
of the awards off, TD Ameritrade took home 2023 Best Online Broker for Stock Trading
Platform and Research award.
TD Ameritrade has not only collected many awards this year in 2023, but they have also been
winning awards for many years prior. It would be tough for any non-legitimate or scam company to
repeatedly win awards for their business year after year. TD Ameritrade’s thinkorswim platform has
been crowned the number one Desktop Platform for 10 years in a row.
Is TD Ameritrade a Safe Place to Keep Your Money & Investments?
If you are an investor with your money at TD Ameritrade or you are thinking of moving your money to TD Ameritrade, you will be happy to know that TD Ameritrade has multiple layers of insurance and protection when it comes to keeping your money safe. TD Ameritrade offers Securities Investor Protection Corporation Insurance (SIPC insurance), Federal Deposit Insurance Corporation Insurance (FDIC insurance), Supplemental Insurance, and an Asset Protection Guarantee.
All investors are automatically eligible for TD Ameritrade’s Asset Protection Guarantee. This
guarantee covers any lost cash or securities due to unauthorized activity on your account. As long
as the unauthorized activity was caused by no fault of your own, TD Ameritrade will reimburse you
for your lost funds. This guarantee is a program that not many brokers offer, and it reinforces
the sentiment that TD Ameritrade has the best interest of its clients in mind.
Investors’ money is never insured against losses in the market but with SIPC and FDIC insurance,
your money is insured if TD Ameritrade were to go bankrupt or go out of business. The SIPC
insurance protects your cash and securities in a brokerage account up to a total of $500,000, including a maximum of $250,000 of cash. For FDIC insurance, TD Ameritrade offers a special type of cash account that automatically sweeps your cash into multiple different FDIC-insured bank accounts so that you can have a much greater amount of overall coverage than the standard FDIC coverage of $250,000.
If the SIPC and/or the FDIC coverage isn’t already enough protection, TD Ameritrade provides each
client with a special type of supplemental insurance through London insurers. The supplemental
insurance covers excess amounts of cash and securities over the $500,000 SIPC coverage up to a
certain limit for each client and for the firm in total.
Is TD Ameritrade a Scam or Legitimate? The Conclusion.
Based on all the information presented in this article, the final verdict is that TD Ameritrade
is absolutely not a scam, and they are completely legitimate. If
TD Ameritrade was a scam or not legitimate, it’s safe to say that it would be quickly shut down
by one of the many regulators watching over them.
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Open TD Ameritrade Account
TD Ameritrade Review
TD Ameritrade offers investors/traders of all types and experience levels a plethora of brokerage products and services. TD Ameritrade offers many different account types including non-retirement brokerage accounts, IRA’s, annuities, custodian accounts, small-business retirement accounts, college savings accounts, business accounts, and trust accounts. TD Ameritrade offers trading in stocks, options, ETFs, mutual funds, futures, options on futures, bonds, IPOs, and FOREX.
The one major area that TD Ameritrade does not currently offer trading in is cryptocurrency however, they do offer trading in Bitcoin futures. TD Ameritrade offers both regular margin accounts and portfolio margin accounts. TD Ameritrade also offers brokerage programs such as a Fully Paid Lending Income Program, Collateral Lending Program, and a Dividend Reinvestment Program.
Trading Tools & Platforms
TD Ameritrade is famous for its award-winning desktop trading platform thinkorswim. Along with the thinkorswim platform, TD Ameritrade also offers trading on its website and mobile app.
The thinkorswim platform allows trading in all securities except for bonds. The thinkScript feature in the thinkorswim platform allows users to perform automated trading via writing custom scripts. One of the main features that thinkorswim offers, that you cannot get in all of the major desktop trading platforms, is paper trading. If you are a new trader looking to learn without risking your real money or an experienced trader looking to test out ideas, the paper trading feature alone makes it worth having an account with TD Ameritrade.
TD Ameritrade’s website allows trading in all securities except for futures and FOREX. The website provides a fluid process for executing trades and gives investors a few different methods to use for trading. One of the trading methods is called the SnapTicket which is a fixed floating bar at the bottom of the screen that you can use to trade from almost any page on the website. One of the benefits of trading on the website is the helpful guides that investors can click on that explain the terminology during the trading process.
TD Ameritrade’s mobile app allows trading in stocks, ETFs, options, and mutual funds. The mobile app is easily one of the best mobile apps for trading in the entire industry. The mobile app has an amazing user interface, incredible charting abilities, and an easy-to-use options trading system. Investors can create a custom dashboard on the mobile app along with many other customization options. The mobile app is great not only for trading on the go but also for researching the markets and individual securities at any time.
TD Ameritrade Cost Review
TD Ameritrade has a competitive price offering in almost every area of its brokerage. The core of their price offering is $0 commissions on online stock trades, ETF trades, and options trades. The $0 commissions apply to stocks, ETFs, and options that are U.S. exchange-listed, which typically applies to most trades for the majority of people. Options have a $0.65 fee per contract on all buys and sells.
The $0 commissions also apply to FOREX trades, but TD Ameritrade does include a markup/markdown in the bid/ask spread. A few of the hidden gems when it comes to TD Ameritrade’s price offerings are 3,000 no transaction fee mutual funds, $1 commission per bond on online secondary marketplace transactions and a $2.25 fee per contract on futures trades.
TD Ameritrade provides investors with a great value that some other brokers don’t by offering free real-time streaming quotes and free level 2 quotes. TD Ameritrade doesn’t charge any extra data fees or platform fees for access to market data or using their thinkorswim platform. TD Ameritrade doesn’t charge any account opening fees or monthly maintenance fees.
The one area of TD Ameritrade that traders might find to be pricier than other brokers is their margin interest rates. Their lowest published margin rate is 8.25% for margin balances of 250,000.00 - $499,999.99. For balances under $10,000, the published margin interest rate is 10.25%. Other than the high margin rates, TD Ameritrade delivers incredible value to investors across the board.
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TD Ameritrade Education & Research Resources
Whether you are a long-term investor or a serious day-trader, TD Ameritrade has an amazing suite of educational and research resources that will support your needs. TD Ameritrade provides research tools on all three of its main platforms which are its website, app, and thinkorswim. Investors at TD Ameritrade have the ability to research stocks, bonds, ETFs, options, mutual funds, and even the overall market.
Investors can create watch lists, set up alerts, and browse charts on any of TD Ameritrade’s three main platforms. TD Ameritrade offers unique research features such as a daily markets overview, a proprietary index designed to indicate the sentiment of retail investors called the Investor Movement Index, and screeners for stocks and mutual funds. Once you have experienced TD Ameritrade’s research tools for yourself, you will understand why they won Nerdwallet’s 2023 Best Online Broker for Stock Trading Platform and Research award.
TD Ameritrade has an Education Center on its website that includes material about every topic you could think of such as portfolio management, personal finance, options trading strategies, and fundamental stock evaluation. You could effectively earn a bachelor's degree in investing by utilizing their content.
TD Ameritrade Review Conclusion
TD Ameritrade ranks highly in basically every category of a broker that you could measure. They are undoubtedly one of the best brokers in the industry. We only briefly touched on certain categories of TD Ameritrade in this article but there is much more that could be said about the positives of TD Ameritrade and not that much to be said about the negatives. You will have to try out TD Ameritrade for yourself but if you are asking for our opinion, we give them two big thumbs up.
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Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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