TD Ameritrade Commission Structure Discussion: Do they really keep it Plain and Simple?

Most Traders and Investors make one common mistake while judging a broker; they simply fall for the stuff that’s heightened on the cover. Ask yourself, don’t you find it irresistible to checkout enticing deals that usually pop-up on blogs like this one? Well, there is no harm in gathering more info on special brokerage deals, but those should not be your only criteria for signing up with a broker. Most of you must be aware of discount brokerage TD Ameritrade. They claim to have a straightforward pricing structure, and they usually have some compelling special offers in their deals basket. Let’s figure out if they are really worth what they say?

 

Complex or Simple, We Just Need a Genuine Broker!

Sometimes, it isn’t easy to do the hard math to figure out what a broker is really offering. Well, if you go by what TD Ameritrade boasts about, then it shouldn’t be a painful task understanding their trading offer.

  • They charge $9.99 for every equity trade placed online, and that’s it.
  • You don’t have to pay any Account Maintenance Fee
  • Commissions remain same irrespective of how much you trade and the size of your account.

So, with TD Ameritrade one can rest assure that they won’t waste your time with complicated pricing model as they love to keep it plain and simple. Well, all that is cover stuff, now let’s dig deeper into their fine print for complete pricing details of their offerings.

Affordable Pricing Structure for Stock Trades

I wouldn’t call TD Ameritrade a cheap online discount broker, rather the word ‘affordable’ suits them better. Have a look at what they really charge for Trading Unlimited Shares, both Market and Limit Orders: -

  • Flat fee of $9.99 for trades placed through Internet
  • Flat fee of $34.99 for trades placed through Telephone system, Interactive Voice Response (IVR)
  • Flat fee of $ 44.99 for Broker-assisted Trades

 Pricing Structure for ETF Trades

If you want to take advantage of trading and investing in commission-free exchange traded funds there isn’t a better way than opting for a TD Ameritrade account. Believe it, you won’t find a brokerage offering you access to over 100 commission-free ETFs. In addition to that, TD Ameritrade clients get the advantage of access to professional guidance, tools and educational resources.

Apart from a comprehensive list of commission-free exchange traded funds, the pricing structure for limit as well as market orders for unlimited units of ETFs stands same as pricing structure for stock trades.

Pricing Structure for Mutual Fund Trades

I really like TD Ameritrade in comparison to leading brokerages especially for trading ETFs and mutual funds, but not for their pricing. Rather, it’s the wide range of funds from leading fund families, topping 13,000 on current count, which makes them a wise choice for a mutual fund investor. So, with TD Ameritrade you can choose to trade mutual funds that closely match your investment objectives, let you diversify across asset classes and keep the risk exposure within your limits. As far as the Pricing structure goes, yet again I would rate them as an affordable option.

  • TD Ameritrade does not charge commission on Load Funds and No-Transaction-Fee Funds, but you need to read the fund prospectus for info regarding any charges that the fund issuer may impose.
  • For transacting No-Load Funds they have a flat pricing of $49.99.

Options Commissions

TD Ameritrade has been Rated #1 broker for options trading by Barron’s. Options traders find them quite efficient for their information structure and support that help traders quickly spot trading opportunities. As far as the pricing goes, I find them a bit expensive when compared to some other discount brokerages that offer cheap options trading. But then, options trading is a risky venture and its not all that expensive with TD Ameritrade, considering all the tools and support traders get with this broker.

  • For internet based trades they charge $9.99 + $0.75 per contract
  • For orders placed through IVR telephone Support they charge $34.99 + $0.75 per contract
  • The cost for placing broker-assisted trades stands at $44.99 + $0.75 per contract

Futures Commissions

  • For trading Future contracts with TD Ameritrade you have to pay $3.50 per contract (inclusive of exchange fees)

 Fixed Income Instruments

You can also invest in Fixed Income Instruments with TD Ameritrade; these include Bonds, CDs and UITs.

  • For treasuries at auction they charge $25 flat fee, and for other type of bonds and CMOs the pricing is on a net yield basis.
  • In case of CDs the pricing for New Issues and Secondary Issues is based on a net yield.
  • There is a placement fee from the issuer on both New Issues and Secondary Issues of UITs.

FOREX Trading

Forex traders can trade in over 100 currency pairs. TD Ameritrade does not charge any additional fee on Non-commission currency pairs that trade in increments of 10,000 units.

Commission currency pairs that trade in increments of 1,000 are subject to a fixed-commission structure based in counter currency units.

Conclusion

TD Ameritrade isn’t the cheapest brokerage out there; the brokerage industry is full of discount brokers competing hard to gain your attention. However, this brokerage house is worth taking a look at, and you should consider comparing their services to other brokers rather than pricing, as without apt tools trading is never easier.

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Comments: 8
Beezel
03 May 2012
Reply

I am aware of cheaper brokers out there, but for an Options Trader like me TD Amtd works best. I don’t mind paying a bit extra for all those addictive tools :)

In Time
10 April 2012
Reply

I have been sticking with TD for 6 years. Once you get used to their tools and a great trading platform, you will never feel like making a switch, even for lower commissions. They are simply addictive.

    Punit
    10 April 2012
    Reply

    Agree with there. TD Ameritrade is definitely the best trading platform I know of. Their pricing is quite higher than the ones like OptionsHouse but their platform is unmatched to be honest with you. I actually maintain accounts with TD and OptionsHouse both.

Kelly Wisdom
08 April 2012
Reply

60 days of free trading is simply awesome, Trade Architect is the best platform ever. I am glad I made a switch from Fidelity though it did hurt paying a bit more for a few days ;)

Newbie
08 April 2012
Reply

I had been searching for realistic responses on various blogs and websites. Alas, I was able to make a choice between TD and OptionsHouse. Thanks for posting your comments.

Addicted to Trading
08 April 2012
Reply

If you count overall user experience then TD Ameritrade is the best Brokerage out there. Though I like OptionsHouse and Lightspeed for their low Pricing. I have been trading with TD for past 6 years and never had a reason to make a complete switch.

Varun Walia
08 April 2012
Reply

Thanks for your valuable comment, though it would have been nice if you had left your email and real name.

I completely agree that when it comes to overall user experience, no one can beat TD Ameritrade. But, it would be wrong to rate OptionsHouse only for their low pricing, even they stand tall with their trading platform and research tools.

Checkout OptionsHouse:- http://www.comparebroker.com/blog/2011/02/21/why-should-you-trade-with-optionshouse/

It was good that you mentioned Lightspeed for their Low pricing. I would say they are the cheapest discount broker out there, and as the name suggests, you can trade at lightning fast speed.

Checkout Lightspeed Review:- http://www.comparebroker.com/blog/2011/09/09/reviewing-lightspeeds-lspt-route-and-execution-costs/

Varun Walia
06 April 2012
Reply

TD Ameritrade is also a suitable brokerage for starting an IRA. It hardly takes 15 minutes to open an account with them. You can also receive up to $600 when you roll over. Trade in thousands of no-transaction-fee mutual funds, and over 100 commission-free ETFs chosen by experts at Morningstar Associates.

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