Cross Border Investment

I Opened a TD Ameritrade Account – Now What?

I Opened a TD Ameritrade Account - What now_

After the initial excitement of having a US-based online brokerage account, readers messaged me asking what else they need to do to actually start investing through TD Ameritrade. They needed additional information and guidance on how to proceed.

This post is to bridge that knowledge gap from account activation to buying the stock or mutual fund of your choice.

I wrote this post because I thought that if there are people who took the time to write me and ask these questions, there must be others who have the same questions but didn’t bother to write. If you’re one of those people who are still confused but can’t be bothered to send an email, you’re in luck.

Some of you may think that these questions are completely basic and “obvious”. But to paraphrase Lady Jessica in that pivotal dinner scene when Liet-Kynes was about to stab the watermonger in Dune, we must make allowances for the differences in people’s training, education, and culture. What is “obvious” to one person may not be so obvious to another. One may be farther along in their financial education than another person.

Below are the common questions I received from readers who successfully opened TD Ameritrade accounts and needed additional help.

Frequently Asked Questions

1. Question: How do I access my trading account?

The log-in details sent to you via snail mail will allow you to access the TD Ameritrade web-based platform. You can access this by signing in at the TD Ameritrade website. This is your “home” platform so to speak.

Other than this, you have the option to download Sink or Swim, TD’s advanced trading software. Sink or Swim is available for PC and Macbook, as well as on mobile. I have both the Macbook version and the mobile app. Both are easy to navigate and convenient to use.

TD Ameritrade web-based platform

It’s essential that you familiarize yourself with the platform you want to use before doing any transactions. If you’re a beginner web-based is great. If you want to have access to more advanced tools (or want to feel a big-shot trader, like those Wall Street types on tv), download Sink or Swim.

Either platform is fine as long as you study it before doing any transactions. The mobile app is also convenient if you have the itch just to monitor your portfolio on the go.

2. Question: How do I fund my account?

After activating your account and before you can actually start buying stocks and ETFs, you need to do something really important: fund your TD Ameritrade account.

You can only fund the account after it’s activated. This is because the bank transfer details can only be found in your profile.

If you don’t have a US bank account, the easiest way to send money is through wire transfer. If you’re like most non-residents, you don’t have a bank in the USA. Use the wire transfer information under “If your bank is located outside of the USA”.

There are no wire transfer limits and TD Ameritrade says that the money should be there within the day. But each country has their own regulations of international wire transfers. Check the threshold for money laundering holds as well as overseas remittance limits.

Most of the time, if you’re transferring US10,000 or more, the funds will be held. There are also some countries that limit the amount that you can send overseas annually. For example, South Korea has a USD 50,000 overseas remittance annual limit.

Additionally, your bank may not be familiar with how to process the wire transfer to TD Ameritrade. There’re a lot of information that needs to be included for the transfer so that the funds will be deposited to the right account. This may be confusing for the bank employee, so be patient.

The bank employee who assisted me with my first wire transfer to TD Ameritrade took a while to figure it out. Then they called me later in the day to say that they had to re-do the process. They ended up having their US branch transfer the funds instead.

I don’t know what internal processes they followed but to make the long story short, the money was in my account in 2 days.

Now I make sure that I transact with the same employee every time because she’s already familiar with my request.

You may or may not encounter the same issues when doing wire transfers. Just be patient with the bank employee because most likely, they’re doing their best to help you.

Other funding options

Non-residents have limited options in funding their TD Ameritrade account. Other funding options require that you have a US bank account.

3. Question: How do I invest in Vanguard mutual funds?

Being able to invest in Vanguard funds is one of the reasons many of you opened a TD Ameritrade account. But some are confused about how to do so. Some think that they need to open another Vanguard account within TD Ameritrade to trade Vanguard funds.

No. You only have to find the ticker symbol of the Vanguard fund you want to invest in.

There are literally hundreds of Vanguard funds so take care that you trade the correct one.

To find what Vanguard products are available, use Symbol Look-up and type Vanguard. It should pull up a list of all Vanguard products that you can trade through the platform.

VTSAX in TD Ameritrade

Most people who want to invest in Vanguard want to buy the Total Market Stock Index. This is available as a mutual fund and ETF. Ticker symbols are:

  • VTSAX – Vanguard Total Stock market Index Fund Admiral Fund
  • VTI – Vanguard Total Index Fund ETF

Or they want to invest in the Vanguard Standard & Poor 500 index. Ticker symbols are:

  • VFIAX – Vanguard S&P 500 Admiral Shares
  • VOO – Vanguard S&P 500 Index ETF

Just remember that you will be charged a commission for trading a mutual fund. Commission-free trades are only for stocks, ETFs, and options.

4. Question: How do I pay taxes to the IRS?

I already address this issue at length with my post, Taxation on US stocks of Non-resident Aliens. Basically, we have to distinguish between (1) dividend income and (2) proceeds of the sale of US stock holdings.

Dividends

For dividends, non-residents will be subject to withholding taxes. If you receive dividends, either in stocks or cash, your brokerage will withhold the taxes on behalf of the IRS. Of course, check your statements for taxes withheld because your liability as an investor and the brokerage’s liability as a withholding agent are separate.

Further, check if you are eligible for a lower dividend tax rate. Foreign investors are automatically levied a 30% final withholding tax. But this can we lowered if your country signed a bilateral income tax treaty with the US.

For example, the Philippines and the USA signed a bilateral income tax treaty in 1974. Under Article 11, Philippine citizens who receive dividends from US sources are taxed not more than 25% of the gross amount of the dividend. US citizens are likewise granted the same benefits for their investments in the Philippines.

Again, taxes collected from dividends payments will be withheld by the brokerage. This means TD Ameritrade should automatically withhold dividends.

Meanwhile, proceeds from the sale of US stocks will not trigger a taxable event. If you are a non-resident selling their US stock holdings, the IRS will not tax you. Read the post Taxation on US stocks of Non-Resident Aliens for more details about this.

Final Thoughts

Opening a US-based online brokerage is a great way to diversify your investments. Diversification does not only mean putting your money in different instruments. It can also mean putting your money in another market. Geographic diversification is one factor that we should take into consideration when making investments and allocating our portfolios.

Having a TD Ameritrade account can help you in diversifying your investments. Instead of being confined to your home stock exchange, you now have access to the US stock exchanges. If you have the means, I suggest you open a US brokerage account right as soon as you’re able.

I hope that this post answered some of your burning questions about your TD Ameritrade account. If you have other questions, feel free to post them in the comments section below.

8 thoughts on “I Opened a TD Ameritrade Account – Now What?

  1. Hi Katie,
    I’m interested in opening a brokerage account too. Have you also considered Charles Schwab too? Their rates can be found here -> https://www.schwab.com/pricing. I’ve inquired with Schwab and they say it depends on the treaty rules of the country you are residing. For Philippines : Interest withheld 15%, Dividends withheld 25%, IRA/Pension 30%.

    1. Hi Den,

      I wrote about contacting Schwab in the original post. In Asia-Pacific, only residents of HK, Australia, Malaysia, Thailand, and Singapore can open Schwab accounts. They also require a minimum of US$25,000funding when opening an account.

      Regarding taxation, yes, it depends on the bilateral treaty signed. The pertinent portion of the treaty is on dividends since dividends are subject to Chapter 3 withholding. So make sure that when applying for an account, you indicate that you want to claim treaty benefits when filling out the W-8BEN form.

      Thank you.

      1. Thanks for the reply Katie. My confusion was because I emailed Charles Schwab and they said ‘We are able to do business in the Philippines and in Germany” [I’m working there]. My worry is the additional fees from brokerage accounts and also tax implications. Since Schwab is an all-in-one place, I was putting it as one of the options. The only drawback is the $25,000 minimum brokerage account though. lol.

    1. TD charges zero commissions for us stocks, ETFs, and options trading. Since VTI is an ETF, it’s zero fee. VTSAX is a mutual fund and not included in the commission-free products. It should still be 6.99usd to trade mutual funds.

  2. Hi Katie,

    I just wanna ask, is it better to invest in Vanguard ETFs in a lump sum (only one time) or by cost averaging (fixed amount divided to regular intervals)?

  3. Hi Katie! I was inspire to read and research about TD Ameritrade through your post. However, when I messaged their FB page, they replied that “Hey, unfortunately we are unable to maintain accounts for residents of the Philippines. If your residency changes we offer over 2,300 commission free ETFs if the ETFs you have in mind are not included commission would be $6.95 for non U.S residents.” I’m confused now 😦

    1. Hi Ed!

      There are readers based in the Philippines who messaged me that were already able to open TD Ameritrade accounts. I guess the best way to find out is to actually just submit the requirements and see what happens. Usually applicants who were denied an account were because of some national regulations, ex: UAE, Australia. But there’s no such regulation in the Philippines.

      I recommend that you submit the requirements and see what happens. And please give us an update on this. Good luck!

Leave a Reply

Your email address will not be published. Required fields are marked *