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Is TD Ameritrade Good for Beginners? Is it a Good Broker For Investing?

Is TD Ameritrade a good company to invest with for the first time beginner investors? Is it an expensive brokerage firm? TD Ameritrade online broker guide to novice investors on how to buy stock, mutual fund, and ETF in 2021.

Is TD Ameritrade Good for Beginners?

TD Ameritrade is frequently ranked near the top of the largest stock brokers, and its large customer base reflects the quality and breadth of service available. However, among other online brokers it is not the cheapest in terms of commissions, and its array of trading tools and high technology platforms seem more suited to the experienced trader and investor. So, is TD Ameritrade a good broker for a beginning investor? This article will provide the answer.

The Priorities of the Beginning Investor

Anyone who is just entering the markets have historically used the services and advice of a full service broker. Before the 24-hour access to market data and analysis, the broker was the only one with real insight into investment choices and value, and could assist clients in setting up a portfolio that fit their goals.

In the modern marketplace, almost anyone has access to that same data, and many retail traders are wading into the arena of stock analysis, technical charting and economic data feeds to assemble their own investing portfolio. The danger now is not too little information, but too much, without the experience to back up trading decisions.

For a beginning investor selecting a broker, commission cost will be at the center of their choice. They may not know what they want to buy, but they know they don’t want to pay too much. TD Ameritrade has a flat rate $0 commission on stocks and ETFs which, obviously, cannot get any better.

Open TD Ameritrade Account

Open TD Ameritrade Account

The TD Ameritrade Account Features

TD has many features that are attractive to any level of investor, and this may explain their popularity. It functions almost as a banking institution with the account management choices available, including personalized checks, debit cards, online bill pay and retirement accounts all in one place. Their affiliation with TD Bank may explain why this banking feature seems so simple and seamless for account holders. So, in this sense, TD Ameritrade may be a good choice for a beginner to start integrating their accounts into one place for ease of management. It is obvious this is TD’s strategy, as they go overboard to make the account maintenance process easy to negotiate right on their website.

Is TD Ameritrade Good Broker?

The appeal for beginners will not stop there, as they begin to explore the high technology online platforms for entering trades, one of which is Thinkorswim, a stand-alone software with strict operating system requirements. The web-based platform Trade Architect is simpler to use, but still requires some time to learn. Both of these platforms can seem intimidating, and it is slightly unreal how easy it is to trade from one’s account in a matter of seconds. Of course, trades can be placed directly on the TD Ameritrade website without launching either of these applications.

Is TD Ameritrade Good for Beginners?

TD Ameritrade is aware of the hurdles for a new investor and does offer an array of educational resources, user guides and webinars to learn one’s new hobby. If a new investor had the time to spend, then this may be a good choice of broker since there is really no limit on the functionality and trading vehicles available. One could graduate to options, currencies and futures trading all within the same account after an approvals process, saving the need to switch brokers as skill increases. These many choices may also present a pitfall for the beginner, where one could be enticed to begin trading vehicles and leveraged investments before there is adequate experience with risk management.

Portfolio Management Services vs. Independent Investing

TD Ameritrade does have an offering for those who don’t want to manage or trade their own portfolio, and for a hands-off style of investor, this could make the broker appealing. Its Amerivest Portfolios offer diversification and risk management similar to mutual funds, available for accounts over $25,000. This is the other end of the spectrum for the inexperienced investor, who has no interest in learning how to pick stocks or manage risk on their own.

In a sense, the passive new investor may feel more at home with TD Ameritrade than the new trader trying to buy and sell a few stocks independently. The tools are there for the new active trader, but require an investment of time and energy to master and eventually make steady gains.

Is TD Ameritrade Good for Beginners: Our Verdict

TD Ameritrade invested huge amount of resources to make sure that both beginners and experienced investors have all the tools they need. Their website is very high tech with the best design among brokerage houses yet it's easy to use even for someone just starting out. The trading on the website is very intuitive and most users learn it in no time.

As to the pricing, well, at TD Ameritrade there are 4,200 commission-free mutual funds, and many stocks and ETFs have $0 commission.

There are also no account maintenance or inactivity fees for both IRA and non-IRA accounts. All this allows many customers to build a portfolio with the firm without spending a dime and it makes TD Ameritrade a great broker for beginner investors.

Open TD Ameritrade Account

Open TD Ameritrade Account