TD Ameritrade is great for investors looking to trade typical investments at a low cost. Like Charles Schwab and Merrill Edge, it’s considered a discount broker and is a household name.
It’s also used by employers to manage retirement accounts like 401(k)s. In fact, TD Ameritrade can be a great choice for employers that want to offer employees self-directed 401(k)s, which the employer sponsored version of a self-directed IRA.
Who a TD Ameritrade IRA is best for
TD Ameritrade is great for investors that want to trade standard investments and have a self directed IRA at a low cost. It’s also great for those that want access to lending and other banking products. This firm isn’t a good fit for those looking for non traditional assets along with check writing.
Check out our roundup of the Best Self-Directed IRAs
TD Ameritrade IRA investment options
TD Ameritrade offers access to research tools, educational materials, investment advisors, and banking services. One of it’s most unique features is that investors can borrow against their self directed IRA assets.
Also, it offers Canadian banking services as its Canadian bank, Toronto Dominion, owns a significant share of this firm. Like Charles Schwab and Merrill Edge, it has the following investments available:
- ETFs and Mutual Funds. There are over 13,000 additional mutual fund choices in self-directed accounts than 401(k)s.
- Target Date Funds.
- Certificate of Deposit (CDs). These are simply a financial institution’s short term debt obligations. They have some similarities to bonds, but are less risky, have lower returns, and have lock up provisions. CD terms range from 3 months to 5 years, with most being less than 2 years. Longer term CDs pay higher interest, but the funds have to be invested for that time period to receive it.
TD Ameritrade IRA features
TD Ameritrade has fee structures similar to Charles Schwab and Merrill Edge. It charges $6.95 per trade and mutual funds along with ETFs have expense ratios ranging from 0.4 – 1.5%. These expense ratios are lower than most of Merrill’s funds, which saves significant sums over time. However, TD Ameritrade has plan administration fees (up to 1.5%), monthly self-directed IRA fees at $15, and annual participant fees being the same for 401(k)s along with IRAs ($50). Luckily, many 401(k) plans offer commission-free funds, which lets investors keep more of their nest eggs.
These fees can add up over time, which is why it makes sense to carefully audit accounts. Another feature that investors can take advantage of is a signup bonus. Similar to Merrill Edge, TD Ameritrade offers generous signup bonuses. These bonuses are free money that can vary based on the investment size. TD Ameritrade also gives each new investors 60 commission free trades on top of the bonus.
Like Charles Schwab and Merrill Edge, TD Ameritrade has branches nationwide. Investors can go to a branch to receive face to face help or phone one of its many call centers. TD Ameritrade was one of the pioneers of discount brokers and has robust online customer service. Their online service is known for being quick and accurate.
- Low fees for most products.
- Easy online trading and management.
- Top notch educational resources and access to advisors.
- Access to banking products and can borrow against self-directed IRA.
- Substantial sign-on bonuses and free trades based on account size.
- Lacks check writing and access to alternative investments.
- Advisors can be expensive and require higher minimums.