Anyone with a computer and an internet connection has the potential to be an investor. If you have what it takes to be an online investor, is TD Ameritrade a good online discount broker?
Today buying and selling stock is easier than ever. Investors no longer have to find and build a relationship with a stockbroker, establish an account, wait on broker responses or pay brokerage firm high prices. Anyone with a computer and an internet connection has the potential to be an investor. If you have what it takes to be an online investor, is TD Ameritrade a good online discount broker?
Types of Accounts Offered by TD Ameritrade:
TD Ameritrade has three basic types of accounts including standard, IRA accounts and specialty accounts.
The standard account is a basic account used by many individuals who are first time online investors. Standard accounts include:
*individual investment accounts
*tenants in common
At the time of sign up terms will be disclosed. In our experience there was a $2,000 minimum required balance to get started with a TD Ameritrade account.
TD Ameritrade also offers IRA accounts including:
We saw a minimum balance of $1,000 to start an IRA account.
TD Ameritrade Specialty Accounts include:
*Partnerships and more
Again, the minimum balance we were quoted was $1,000.
Ameritrade also offers the option of setting up margin accounts. There is a required minimum of $2,000. Margin account investors should be aware that with margin trading, if a margin call takes place and your stock value has fallen below the specified level in your contract (often 50 %), you will be required to quickly send additional money to get your account back up to the margin requirement.
What we like about TD Ameritrade:
Users feel that the TD Ameritrade is easy to use and that the web site offers some helpful research tools. Also, costumers feel that the trading commissions are fair.
What we don’t like about TD Ameritrade:
Customers say investors have to keep their eyes open for hidden fees and watch out for quarterly charges if your balance falls below $2,000. In fact, fees like a $2.00 fee to have statement mailed or a $5.00 fee to send a check to an alternate address can add up and dip you below the $2,000 mark if you don’t watch out.
In our opinion, with a financial analyst included, is that Ameritrade is a reasonably good online brokerage service that is recommended as long as customers pay attention to fees. While Ameritrade is not considered to be the best business, it is a fair option for online trading and investing.
User Tools Available at TD Ameritrade:
Ameritrade is for the most part a self- directed type of investment service. There is much research available for free right on the website.
The Ameritrade Streamer is one tool that is offered free to all Ameritrade users. It offers real-time stock and option quotes, information on recent trades, as well as most active stock lists, and much more.
The Ameritrade Streamer can be customized to send you, the investor, alerts when certain securities reach a specific level.
There are other tools such as Market Analyzer and Market Edge that have specialized research tools and carry a fee, often $19.95 per month.
Costs & Fees at TD Ameritrade:
Ameritrade’s fees can change at any time therefore the following fee schedules should only be considered as general estimates. For an internet trade without assistance, the commission is $10.99. If you use the phone and call in your trade using the voice response system, the commission per trade is $14.99. If you need to talk to a broker, the commission charge will be $24.99 for a market order or $29.99 for a limit order, which means that you are asking Ameritrade not to make a sale or purchase unless the price reaches a certain specified amount. For mutual funds, the fee is $17.99 to buy, sell or exchange. The fee for selling or purchasing bonds is generally $5.00 for the first 50 bonds.
These TD Ameritrade rates are fairly competitive and they are right in line with other on- line brokerage services. However, in addition to these trading fees, Ameritrade also charges quarterly fees to its members when an account falls below $2,000. The fee is currently at $15.00 and customers should be confident of maintaining a balance to avoid these extra fees. If not, Ameritrade might not be the best place to put your money.
Customer Service at TD Ameritrade:
Ameritrade customer service reps are standing by 24 hours per day unless it is a holiday when the market is not open for trading. Customers can call or email questions. In our experience, earlier in the day an email works best but later in the day a phone call will get a quicker response.
All in all, if you are comfortable with online trading, can keep up with minimum balances and watch out for hidden fees, TD Ameritrade is recommended.