Is TD Ameritrade Scam? | TD Ameritrade Safety and Reliability

Pros

Cons

  • Regulated by top-tier regulators SEC, FINRA, CFTC, and MAS
  • Have a banking background
  • Investor protection
  • Long tracking record since 1975
  • Listed on NASDAQ exchange
  • No negative balance protection
  • Does not cover currency, and interests in gold, silver, or other commodity futures contracts or commodity options.
  • No protection on futures and forex

Introduction

TD Ameritrade is one of the oldest online brokers in the US since 1975 with a long tracking record of +45 years and over 175 branches nationwide. It’s considered one of the safest brokers as it’s regulated by top-tier regulators like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Is TD Ameritrade Regulated?

The TD Ameritrade broker is regulated by many financial authorities and top-tier regulators in different countries like:

  • SEC: Securities and Exchange Commission
  • FINRA: Financial Industry Regulatory Authority
  • CFTC: The Commodity Futures Trading Commission
  • MAS: Monetary Authority of Singapore
  • SFC: The Securities and Futures Commission in Hong Kong

On the other hand, TD Ameritrade is not regulated by the top-tier FCA, the Financial Conduct Authority in the UK.

Is TD Ameritrade a Scam?

TD Ameritrade broker has a long record as a trading platform since 1975 with more than 11 million users worldwide and passed through different global crises ending with the coronavirus.

TD Ameritrade Awards

Since its foundation in 1975, TD Ameritrade was awards like:

  • #1 Overall Broker by StockBrokers.com for (3 years in a row)
  • #1 in Tools and Platforms (for 10 years in a row)
  • #1 in Education (for 9 years in a row)
  • #1 For Beginner Investors (for 9 years in a row)
  • #1 Desktop Platform: Thinkorswim (for 9 years in a row)
  • #1 in Active Trading
  • Best Broker for Stock Trading Platform and Research by NerdWallet in 2021
  • Top online broker in 2019 by Investor’s Business Daily

Client Protection

All TD Ameritrade clients are covered by the US investor protection scheme, called SIPC. Although SIPC does not cover all the investments, it covers notes, stocks, bonds, mutual funds and other investment company shares, and other registered securities.

On the other hand, SIPC does not cover instruments such as unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold, silver, or other commodity futures contracts or commodity options.

The SIPC protects the TD Ameritrade clients in the following cases:

  • Loss of client’s cash
  • Security of the broker in case anything goes wrong

The limit of ISPC protection is $500,000 including a $250,000 limit for cash.

Another part of client protection is that TD Ameritrade has an additional insurance policy for assets with a total coverage of up to $152 million. This part is additional insurance from TD Ameritrade that is not covered by SIPC.

TD Ameritrade Legal Entities Table

Country/ Asset

Protection amount

Regulator

Broker’s Legal Entity

US

$500,000

+

Additional insurance

SEC, FINRA

TD Ameritrade, Inc.

Hong Kong

SEC, FINRA, CFTC, MASS,

SFC

TD Ameritrade Hong Kong Ltd.

Malaysia, Singapore, Thailand

SEC, FINRA, CFTC, MASS,

SFC

TD Ameritrade Singapore Pte. Ltd.

Futures, and forex

No protection

CFTC

TD Ameritrade Futures & Forex LLC.

Negative Balance Protection

Unfortunately, TD Ameritrade does not have a negative client protection for its clients.

Two-step Verification

Luckily, TD Ameritrade does provide a two-factor authentication method for login.

FAQs

  1. How long does it take to verify my account?
  • It takes about 1 to 3 days to verify your TD Ameritrade account.
  1. Is my TD Ameritrade account protected?
  • Yes, If you lose cash or securities from your account due to unauthorized activity, TD Ameritrade will reimburse you for the cash or shares of securities you lost.
  1. Can I open more than one trading account?
  • Yes, you can, but some account types may be restricted from linking between devices.
  1. Does TD Ameritrade allow bot trading?
  • Yes, TD Ameritrade does provide an Autotrade option which is a service that automatically enters trade recommendations you receive from TradeWise and other third-party newsletter providers into your TD Ameritrade account.
  1. Does TD Ameritrade give a bonus?
  • Yes, TD Ameritrade does give a bonus up to $2,500 if you meet the following conditions:
  1. You make a deposit of $250,000 or higher.
  2. The deposit should be made within 60 calendar days from account opening.
  3. Before June 30, 2021.
  4. Can I trade margin or option?
  • Yes. As you’re completing the Account Application, simply complete the margin and/or options section.
  1. Does TD Ameritrade allow scalping?
  • Yes, TD Ameritrade offers scalpers three trading platforms: web browser, thinkorswim, and mobile.
  1. Is my money safe at TD Ameritrade?
  • Yes, because of the following reasons:
  1. The cash in your account can be held in a TD Ameritrade FDIC Insured Deposit Account (IDA).
  2. Balances in an IDA are held at one or more banks (“Program Banks”), where they are insured by the FDIC against bank failure for up to $250,000 per depositor, per bank.
  3. Two of the Program Banks are TD Bank, N.A. and TD Bank USA, N.A., both are affiliates of TD Ameritrade. Each bank will have separate FDIC coverage of up to $250,000 per depositor for up to $500,000 total per IDA depositor.
  4. Does TD Ameritrade have an islamic account option?
  • Unfortunately, TD Ameritrade does not provide such an option on its platforms.
  1. Can I login to the same account through different devices?
  • Yes, TD Ameritrade allows login to the same account from different devices.
  1. Does TD Ameritrade accept payments from third parties?
  • No, as all deposits into your trading account must come from a bank account in your name.


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