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TD Ameritrade Automatic Investment Plan

2021: Does TD Ameritrade offer automatic investment plan (AIP) contributions? TD Ameritrade dollar cost averaging program setup and review. AIP/DCA fees on ETFs, stocks, and mutual funds monthly/weekly auto investing.

Can You Set Up an Automatic Investment Plan at TD Ameritrade?

Investors at TD Ameritrade can take advantage of a convenient automatic investing plan (AIP), which is free of charge. TD Ameritrade allows any type of mutual fund to be registered for automatic purchases. Both load and no-load funds, and both transaction-fee and no-transaction-fee funds can be enrolled. Over 13,000 mutual funds are available on the TD Ameritrade of which 4,200 are commission-free. Unfortunately, stocks and ETF’s are not eligible for automatic purchases.

Open TD Ameritrade Account

Open TD Ameritrade Account

TD Ameritrade Dollar-Cost Averaging

The broker’s automatic investment plan is a form of dollar-cost averaging. With this method of money management, you make fixed-dollar purchases at regular intervals. Because the dollar amount is fixed, and not the number of shares as would stock or ETF purchases, you receive more shares when the NAV is low. This is the primary advantage of dollar-cost averaging. The other advantage is the ability to purchase fractional shares, which isn’t possible with ETF’s and stocks.

As an example, you could buy $50 every week of VBINX, which is the Vanguard Balanced Index fund. There is a transaction fee of $49.99 on the initial purchase. Before you can make automatic investments, you first have to buy the fund. The transaction fee is only applied to the first purchase. Automatic investments cost nothing extra.

Funding the Regular Purchases

If you’re going to sign up for automatic purchases of mutual funds, you’ll of course need to fund these transactions. The TD Ameritrade website has a very convenient funds transfer tool that that can establish recurring deposits into a brokerage account. The company allows recurring transactions to be weekly, every other week, monthly, quarterly, semi-annual, or annual. More unique choices are available, such as third Friday of the month.

Setting up TD Ameritrade Automatic Investment Plan

To establish an AIP, you’ll first need to call TD Ameritrade. The broker will send you a paper form that you’ll need to fill out and submit. The minimum purchase amount is $50. The recurring investment can be weekly, semi-monthly, monthly, quarterly, semi-annually, or annually. Multiple accounts can use this free service, and there is no limit to the number of mutual funds that can be enrolled. If you decide at any point in the future that you want to change or cancel your AIP, you simply need to call TD Ameritrade and request a change.

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Open TD Ameritrade Account

Open TD Ameritrade Account

Does TD Ameritrade Offer Automatic Investing on Stocks?

There is no automatic investing offered for stocks, other than dividend reinvestment plan.

TD Ameritrade Automatic Investment Plan


Not all brokers allow load funds and transaction-fee funds to be used in an automatic investment plan. For example, E*Trade restricts its AIP to no-load, no-transaction-fee funds, which obviously reduces the number of funds eligible for automatic purchases.

On the other hand, E*Trade has much more extensive information on its site about its AIP. TD Ameritrade provides no information, so its customers will have to hunt for information if they want to use this service.

TD Ameritrade Overview

TD Ameritrade offers its customers great flexibility and autonomy when it comes to investing and finding investment options. They offer Vanguard mutual funds and ETFs, Fidelity ETFs, no transaction fee (NTF) funds, and no-load funds. Their great screener tools makes it extremely easy for even a novice investor to find stocks and funds they want to invest in.

TD Ameritrade customers have access to online trader community, where they could interact with each other, share their trading strategies and tips. TD Ameritrade offer automatic investment plan or dollar cost averaging program is available for thousands of mutual funds for free.

TD Ameritrade also offers two trading platforms called Thinkorswim and Trade Architect. Thinkorswim is for professional traders, while Trade Architect some users (usually beginners) might find more intuitive.

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Thinkorswim comes with a technical analysis package and a highly developed charting. If you are an option trader, and if you are particularly into the Greeks, you will be able to keep an eye on your individual positions and on your portfolio at the same time from the gamma, delta, vega and theta perspective. By all accounts, TD Ameritrade offers one the best trading platforms on the market right now. And, amazingly, it is absolutely free.

TD Ameritrade endeavors to be competitive and has similar commission rates to the other top brokerage houses.