Saturday, March 08, 2008

Ameritrade Fees

I just noticed that Ameritrade upped my fees from $7 per trade to $9.99 at the start of this month without any notification. I queried whether this was correct and also pointed out that higher fees would cause me to make more trades with Interactive Brokers instead :) Let's see what they do. On another note, I switched roughly 1/4 of my holding of CREF Bond Fund to CREF Global Equities at today's close. And I bought some XLF.

P.S. Sunday, 9th March

Here is Ameritrade's response:

"David Stern,

Thank you for contacting TD AMERITRADE.

Your account was previously on a temporary promotional commission schedule to receive $7.00 online commissions for 1 year. Your promotional period has ended; however, we will return your account to the $7.00 commission schedule. We hope that moving forward we can earn more of your business.

Have a good day.

xxxx xxxx
Apex Client Services, TD AMERITRADE
Division of TD AMERITRADE, Inc."

Very good!

There are several features of Ameritrade that Interactive Brokers do not provide that I like, which is why it is worth maintaining the two accounts:

1. Dow Jones news service free for Apex customers - need to average 5 trades per month or have $100k in assets.

2. The streamer includes a mini-charts that have trade by trade action, which are really cool.

3. They can have custody of mutual funds, which IB can't. The $50 fee for trading a mutual fund though is very steep.

The downsides are:

1. Even a $7 fee is high compared to the $1 that IB charge for 100-200 US shares. (The $A30-40 fees I have to pay CommSec in Australia are just outrageous by comparison. Ameritrade is cheaper than IB for trading larger numbers of shares - say 2000 QQQQs or whatever.

2. The margin interest rate is much higher than IB.

3. IB offers futures and non-US stocks.

4. IB's Trader Workstation is much better for entering orders while day trading like changing stops. To change a stop you remain entirely on the same screen that is displaying the data feed. In Ameritrade you have to go to another browser window entirely (order status) and then do a refresh to see that the change has been accepted. This is fine for longer term trades but not for fast daytrading.

But it is certainly worth having two brokers in case of problems.

People tell me that IB's customer service is terrible, but my experience of it is pretty good. Ameritrade, however, win in flexibility.


Anonymous said...

IB is now offering Vanguard funds.

mOOm said...

Thanks! I didn't know that. I have shares in HSGFX and TFSMX - the latter with the company at the moment and the former in my Roth IRA at Ameritrade.