How to Buy Crypto with TD Ameritrade
Explore why TD Ameritrade doesn't offer direct crypto trading and what alternative investment vehicles are available on the platform.
Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk.
Summary: TD Ameritrade's platform doesn't provide the option for direct purchases of cryptocurrencies. Instead, it allows investors to enter the digital asset space indirectly via investment vehicles like ETFs and futures contracts that are linked to crypto performance. This indirect route often comes with additional costs and potential counter-party risks.
After a thorough examination of numerous platforms, we find eToro to be an advantageous multi-asset broker. It offers an expansive selection of actual cryptocurrencies, alongside an intuitive user interface and attractive fee structures. Importantly, eToro is a regulated exchange compliant with FinCEN guidelines, ensuring secure USD deposits from any U.S. bank.
Can I Buy Crypto with TD Ameritrade?
Currently, TD Ameritrade does not provide the option to purchase cryptocurrencies directly on its platform. Instead, the broker allows you to invest in crypto-related financial products, such as futures contracts and ETFs that track the performance of blockchain companies or cryptocurrencies like Bitcoin and Ethereum.
If you're thinking about investing in these types of products, it's important to be aware of the associated risks, which can include regulatory and liquidity issues. Previous mishaps, such as the troubles faced by certain futures markets, should serve as a cautionary tale. Moreover, investing in these crypto-related derivatives usually comes with higher fees than directly buying cryptocurrencies like Bitcoin, Ethereum, or Solana.
How to Buy Crypto with TD Ameritrade
If you're looking for an alternative to TD Ameritrade for buying cryptocurrencies, consider a FinCEN-regulated digital asset exchange in the United States. Such platforms offer secure ways to deposit US dollars, including via bank or ACH transfers and credit or debit cards. Among these platforms, we recommend eToro, particularly because of its favorable fee structure, smaller spreads, and broad range of available assets.
To begin, follow these simple steps:
- Head to the eToro website and undergo their identity verification process.
- Locate the 'Deposit Funds' option, found at the bottom left corner of your user interface.
- Enter the amount in US dollars you'd like to deposit, and choose your preferred deposit method, such as ACH Transfer or Credit/Debit Card.
- Complete your USD deposit and use the newly credited funds to start exploring various cryptocurrency investment options.
What are the Fees?
When dealing with crypto-related stocks, ETFs, and diverse derivatives on TD Ameritrade, it's worth noting that there aren't explicit charges or initial fees. However, TD Ameritrade does include a fee within the spread, which is the difference between the buying and selling prices of various investment products, often around 1%.
This fee setup is similar to what you'll encounter on our recommended alternative, eToro. A unique benefit with eToro, however, is that you can buy real cryptocurrencies on their platform, giving you more direct exposure to the asset class, unlike TD Ameritrade where you're generally restricted to derivatives.
Will TD Ameritrade Offer Real Crypto Assets?
Currently, there's no strong indication that TD Ameritrade is planning to provide direct access to real cryptocurrencies in the immediate future. One of the main challenges would be the need for a secure and robust infrastructure to safely store cryptocurrencies for both individual and institutional investors.
Creating such an infrastructure would necessitate significant investments in technology and security measures, something TD Ameritrade has not publicly committed to. Therefore, it's reasonable to expect that TD Ameritrade will continue to concentrate on its existing range of products and services, which don't include direct crypto-asset trading.
About TD Ameritrade
TD Ameritrade is a U.S.-based online brokerage firm established in 1971, offering a comprehensive suite of investment options to both retail and institutional investors. Known for its user-friendly interface, the platform provides a variety of financial products including stocks, bonds, mutual funds, ETFs, and futures contracts. Although it doesn't support direct cryptocurrency trading, TD Ameritrade excels in providing a broad range of financial solutions, complete with educational resources and award-winning customer service to help investors make well-informed decisions.
Bottom Line
In summary, TD Ameritrade does not offer the direct purchase of cryptocurrencies but allows investors to explore the crypto space through related financial vehicles like ETFs and futures contracts. However, these alternatives often entail higher costs and various risks.
For those keen on directly investing in cryptocurrencies, eToro emerges as a viable, FinCEN-regulated alternative, offering an extensive asset selection, user-friendly interface, and competitive fee structures. Given current conditions, TD Ameritrade will unlikely offer direct crypto trading soon, making eToro a better choice for crypto investors.
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