TD Ameritrade is easily one of the biggest brokerage firms out there. From their low commissions to their great variety of tailor-made investment advice programs, they’re ideal for pretty much any investor. But what about those customers who need to open more than one account? Does TD Ameritrade allow you to open multiple accounts?
Yes, you can have multiple TD Ameritrade accounts. More so, you can link them all together if you want to make signing in easier. And that doesn’t mean that this is necessary if you want to link a single bank account to all of your TD Ameritrade ones. You can still do that and keep your brokerage accounts separate from each other.
But since there are only a handful of reasons that justify having more than one brokerage account, in this article I will outline them to help you see if this is the right move for you…
Should I Have Multiple Brokerage Accounts?
The most prevalent idea behind having more than one brokerage account is that you must not mix your investments.
Now, I’m not talking about separating your asset allocations; that would make zero sense if you have a single investment goal. No, I’m talking about the many instances where your investment goals are more than one.
For example, if you invest for retirement, you will most likely have your retirement fund placed in conservative investment vehicles like mutual funds, index funds, bonds, etc.
But what if you want to buy some stocks like Tesla or Amazon? Are such investments aligned with your retirement goal? Most likely not. Unless, of course, you had years of security analysis experience to consider individual stock picking as safe as buying a mutual fund.
So, such investments will fall into the category of speculation. No judgment here. We all want to “play” now and then. But you need to make sure that you don’t mix speculation with investing for retirement.
A separate brokerage account solves this issue and such an example is a good reason for opening one.
Now that you get my point, let’s examine the rest of the ways you could benefit from multiple TD Ameritrade accounts…
You Get to Keep Investing and Learning to Invest Separate
The harsh truth about most of those who trade stocks is that they’re speculators. They don’t know what they do. But some learn the more they do it and keep educating themselves. I say “some” because most will keep buying whatever stock is “hip” that also gets a lot of news coverage.
If you buy an index fund (even if you know absolutely nothing about stocks), that’s immediately easily considered investing. It’s uncertain whether you’re at the point where stock picking can be considered investing. I think you get my point by now…
So, those who do learn with practice will need to separate their learning from investing.
If you mix the two (investing and learning to invest), you will have a hard time figuring out the actual returns from your investments. But as soon as you feel confident you are able to intelligently pick stocks on your own, it makes sense to combine the two accounts.
You Get to Keep your Education Account Separate from the Others
No, I won’t talk about the same thing here that I talked about above. TD Ameritrade offers customers education accounts that give them access to tuition savings plans like:
Both of these plans are tax-deferred and are set up by the US government for people who want to save money to cover tuition costs.
You certainly wouldn’t like to mix your retirement account with your kids’ education accounts.
You Get to Keep your Business Account Separate from the Others
If you have a business, TD Ameritrade also allows you to open an account for it no matter the formation. Whether you have an LLC, a Sole Proprietorship, Limited Partnership, or a non-profit organization, they have you covered.
Such accounts can give you access to plans like a 401(k) if you have a small business or you can get the usual cash, margin, and options accounts otherwise.
You Get to Keep your Margin Trading Account Separate from the Others
TD Ameritrade also offers you access to margin through a separate type of account. If you’re into margin trading, it’s always a good idea to keep your trading and your margin trading account separate.
Trading with margin requires a bit more experience than regular trading. For this reason, valuation errors can be seriously detrimental to your portfolio’s performance. Mixing both strategies will blur your performance as a trader and where your mistakes lie and to what extent when it comes to both strategies.
Keeping your margin trading separately through a different account is a great idea.
As I already said, TD Ameritrade offers customers the ability to open multiple accounts depending on their needs. It’s also great that they allow you to link all of them together to make logging in easier.
And as you can see, there are plenty of reasons to have multiple TD Ameritrade accounts; all of them valid. If you have multiple financial goals, then you will need as many accounts as those goals.
Did this article answer your question? If so, please take a minute to share it on social media. And you can let me know what you think in the comments.
Thanks for reading and I’ll talk to you next time…
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).