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Written by Ozone
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Wednesday, 02 July 2008 |
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TD Ameritrade targets their business towards investors on the “small-timer” end of the spectrum. Their TV commercials advertise $9.99 per trade no matter how small or large the order.
Investors moving around a lot of money can get a much better trading rate than this. TD Ameritrade is more interested in customers whose stock positions are small enough that the difference between a $10 or $20 trading fee actually bears some significance to the value of the transaction.
Ease of Use - 10/10
As a brokerage catering to lesser-experienced investors, TD Ameritrade does a good job of making their interface as user-friendly as possible. It is not hard to set up an account, and start making trades.
Cost - 7/10
TD Ameritrade advertises $9.99 for all online trades. This is a pretty solid offering that places like Fidelity don‘t really compete with. Be careful though as there can be some fine print regarding trading fee costs. For example, any trade made over the phone with a representative costs $44.99.
Interest Rates - 5/10
Since the average TD Ameritrade user is something of a small-timer, their interest rates are pretty mediocre. If you’re going to be leaving a lot of cash in an account or maintaining large short positions, it’s probably wise to use a different firm such as Interactive Brokers. Accounts of relatively low value get hammered pretty hard on margin fees, so be careful.
Customer Service - 7/10
TD Ameritrade’s customer service is adequate, but far from industry leading. Their phone representatives are usually pretty knowledgeable, but sometimes there can be a bit of a wait during peak hours. In general, this brokerage could do a better job of reaching out to their customers and proactively fulfilling their needs. Setting up margin privileges and selling certain stocks short can sometimes be a needlessly annoying process.
Security - 4/10
Security is not as much of a priority as one would hope at TD Ameritrade. To access one’s account online, a simple username and password is all that is needed. Some brokerages, like Interactive Brokers, are more aggressive in their security measures. Since the average TD user doesn’t maintain a staggering account balance, the company has less incentive to implement industry-leading security barriers.
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