A Beginner's Guide To Td Ameritrade Investing

TD Ameritrade is a leading online broker offering a wide range of investment options, including stocks, bonds, ETFs, mutual funds, and more. The platform provides commission-free trading with no hidden fees and offers various tools and resources to help investors make informed decisions. With its intuitive platforms, innovative features, and focus on user experience, TD Ameritrade is an excellent choice for both beginner and experienced investors looking to grow their assets. In this article, we will discuss how to make investments using the TD Ameritrade platform, covering topics such as account opening, funding options, and the different investment choices available.

How to open a TD Ameritrade account

TD Ameritrade is a leading online broker offering innovative technology, extensive product access, and personalized education to help investors stay on top of the market. The platform provides brokerage services with a focus on transparent pricing, diversified investment options, and dedicated support. TD Ameritrade was acquired by Charles Schwab in 2020, and existing account holders were migrated to Schwab.

• Go to the TD Ameritrade website and fill out a registration form: You will need to provide personal information such as your name, contact details, Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), foreign tax ID, passport, or visa number (if you are not a US citizen or permanent resident). You will also need to provide your employer's name and address.
• Prove your identity and residency: You will need to provide documents to verify your identity and residency, such as a government-issued ID card or passport.
• Choose an account type: Select an account type that suits your needs. Consider your investment goals, risk tolerance, trading frequency, and any associated fees or account balance minimums. If you are a beginner, it is recommended to select the standard account.
• Fund your account: After your account has been verified, you will need to fund your account before you can start trading. The minimum deposit at TD Ameritrade is $0, meaning you can deposit any amount of money you wish. However, to access margin and options trading, there is a $2,000 account minimum.
• Start trading: Once your account is funded, you can begin trading on TD Ameritrade's various platforms, such as thinkorswim (desktop, web, or mobile), or their mobile trading app.

It is important to note that TD Ameritrade's services are available mainly in the US and a few other countries, including China, Hong Kong, Malaysia, Singapore, Thailand, Taiwan, and Canada (through TD Direct Investing). The platform allows trading only on US markets, and the only available base currency is USD.

How to fund your TD Ameritrade account

To fund your TD Ameritrade account, you can use the TD Ameritrade "Advisor Client" mobile app and deposit a check from your phone. The app is free from the Google Play Store or the Apple App Store, but note that deposits are limited to $10,000 per check per day.

You can also establish a "MoveMoney" authorization for on-demand or regularly-scheduled ACH deposits. You can contact TD Ameritrade for the form and secure completion instructions.

Another option is to use the online bill pay feature of your checking account to send a payment to TD Ameritrade. Include your account number in the "account number" field and send the payment to:

> TD Ameritrade Institutional

> PO BOX 650567

> Dallas, TX 75265-0567

You can also send a check payable to TD Ameritrade with your account number in the memo line to the following addresses:

> TD Ameritrade Institutional

> PO BOX 650567

> Dallas, TX 75265-0567

> TD Ameritrade Institutional

> 7801 Mesquite Bend Drive, Suite 112

> Irving, TX 75063-6043

It's important to note that TD Ameritrade does not charge any deposit fees for bank transfers. However, there may be costs associated with the bank or third-party financial service you use to send the money.

Understanding the fees

Trading Fees

TD Ameritrade offers commission-free trading for stocks, options, and ETFs. However, there is a $6.95 flat-rate fee for trading penny stocks. For options trading, there is a fee of $0.65 per contract, which is fairly standard across brokers. There is also a $6.95 commission fee for OTC stock trades.

Mutual Fund Fees

Mutual fund fees at TD Ameritrade can vary. Most mutual funds cost $49.95 to buy and $0 to sell, but some funds cost $74.95 to buy. There are also a large number of no-transaction-fee (NTF) funds available. However, if you sell an NTF fund within 180 days of purchase, you may be charged a short-term redemption fee of $49.99.

Forex Fees

TD Ameritrade operates on a commission-based pricing structure for forex trading. The commission fee is typically around $0.10 per 1,000 units of currency traded and is based on the size of your trade. Additionally, spread fees are charged, which represent the difference between the bid and ask price of a currency pair. If you hold a forex position overnight, you may be charged an interest or overnight financing fee, based on the interbank lending rate plus a small markup.

Withdrawal Fees

While there is no fee for withdrawing via ACH transfer, withdrawing via wire transfer will cost $25.

Inactivity Fees

TD Ameritrade does not charge a general inactivity fee. However, if you have a brokerage account and do not trade any securities, including forex, for an extended period, you may be subject to an inactivity fee.

Account Transfer Fees

There is a $75 fee for transferring your full account balance to another brokerage. However, there is no fee for partial transfers.

Miscellaneous Fees

There may be additional fees for certain services, such as paper statements, account transfers, and currency conversion. It is important to review TD Ameritrade's fee schedule thoroughly to understand all potential charges.

How to research stocks to buy

TD Ameritrade, now owned by Charles Schwab, is a leading online broker offering a wide range of investment options, including stocks, bonds, ETFs, mutual funds, and bitcoin futures. It provides commission-free trading with no minimum deposit required, making it accessible to investors of all levels.

Understand the Platform and Tools:

TD Ameritrade offers two main trading platforms: the web platform and Thinkorswim. The web platform provides all the necessary tools to screen, research, and trade bonds, stocks, options, and ETFs. Thinkorswim, on the other hand, is a more advanced platform that includes forex, futures, and tradable securities. It gives access to technical analysis tools and more sophisticated trading capabilities. Familiarize yourself with the platform and utilize the tools available to assist in your stock research.

Evaluate Price and Valuation:

When researching stocks to buy, it's important to consider the price and valuation of the stocks. Look for stocks that are undervalued by analyzing the price-to-earnings ratio. This will help you identify stocks that may be trading at a lower price compared to their earnings, potentially indicating a good investment opportunity.

Assess the Company's Financial Health:

Before investing in a company, it's crucial to evaluate its financial health and stability. Review the company's financial reports, pay attention to revenue growth, and consider the amount of debt the company holds. This information can be found in the company's financial statements and regulatory filings.

Utilize TD Ameritrade's Resources:

TD Ameritrade provides a comprehensive range of educational resources, including immersive articles, podcasts, webcasts, videos, and in-person events. Take advantage of these resources to improve your investment knowledge and make more informed decisions when researching stocks. Additionally, TD Ameritrade offers market analysis from Morningstar Investment Management professionals, which can provide valuable insights.

Practice with PaperMoney:

If you're a novice trader, consider using PaperMoney, a virtual trading simulator provided by TD Ameritrade. This tool gives you $100,000 in virtual money to practice trading without risking your own capital. This can be an excellent way to build your confidence and skills before investing with real money.

Monitor and Review:

Regularly monitor the performance of the stocks in your portfolio. Stay up to date with market news and analysis, and review your investment strategy periodically. Adjust your portfolio as necessary to align with your investment goals and risk tolerance.

Remember, investing in stocks carries inherent risks, and there is always the potential for losing money. Conduct thorough research and due diligence before making any investment decisions.

The pros and cons of TD Ameritrade

Pros

• No minimum investment to open an account
• Huge range of investment options like stocks, ETFs, mutual funds, and bitcoin futures
• Various account options (including corporate accounts and partnership accounts)
• Advanced tools and access to education and research
• 24/7 customer support from former floor traders

Cons

• Robo-advisors require a high $1,000 investment minimum
• Doesn't offer fractional shares or cryptocurrencies
• Though TD Ameritrade provides superior client service, other brokers have friendlier design and writing
• TDA doesn’t offer fractional shares or crypto
• No direct access to cryptocurrencies
• High mutual fund commission
• High futures fees

Frequently asked questions