I notice TD still crediting only 0.01 percent interest on cash. IB is crediting .41% , while other brokers like Fidelity at least give you a choice of money markets that pay roughly the same as IB. . Also, Fidelity lowered their commissions to $4.95 while TD only lowered theirs to $6.95.
I don't blame them, a crap ton of their account holders are just in for the free access to TOS software and free real time data. They deserve that interest
In these all time historical low overnight Fed rate era the sweep may not be such a big deal. When or if when get half way back to 'normal' the sweep is well into into the 5 digits for many people.
Fidelity has free realtime data as well, and a pretty good trading platform, at least it is from the standpoint of trading multiple accounts. Wish Fidelity allowed futures trading though.
I'm guilty of this. I even tried to negotiate lower commissions by telling them that, while I enjoy their customer service and banking, If they don't lower my commissions I'll just go trade somewhere with lower commissions and use tos as a tool, which a lot of other traders are already doing. They ended up lowering commissions, but barely.
I do that too...I don't care for TOS, but their mobile app is great. I use it to check my IB positions.
I moved some $ into Fdelity to get 500 comm free trades (good for 2 years). Besides the $4.99 commissions they also have DMA to several ECNs (ARCA, NASDAQ, NYSE,Super Dot). Fidelity has many more commission free ETFs to choose from, the only penalty for exiting inside of 30 days is $4.95. TDAs penalty is $19.95. I still like TDA/TOS - using them for futures trading in my Roth and Forex trades in my individual account. These days you can do well by using several brokers and shuffling $ to the broker offering he best promos.
TD still hasn't really budged on interest rates, even though the Fed raised rates several times this year. TD's interest for the entire year is virtually zero, while other brokers are almost at 1% on idle cash. Depending on the account size, this can be very substantial. The interest in other accounts more than covers the commissions for the year, while the interest in TD only covers a few trades at best. What's so great about TD that they deserve to not have to pay interest on idle cash?
First of all, they offer you free trades to lock you in. Second, the commission free ETFs that I have seen (Vanguard) used to have 5 to 10 cent spreads compared to a SPDR product with 1 cent spreads. And if you want to trade options around those commission free ETFs, good luck, the liquidity will be even worse with those if they have options at all. So you can pay in the commission or you can pay in the entry / exit price. Because you and their other customers let them get away with it. They are a business. They have determined that they make more money by not paying competitive interest rates. If fewer customers put up with that, then they would likely change their practice.
Oh my - someone patronizing me that does not even know how the NBBO works. Let me take you to school on this. Brokers do not set the bid/ask price - that comes from the consolidate quote which is the best National Bid/Offer across all the ECNs. The bid/ask quote are ubiquitous among all brokers. ETFs with less liquidity have wider spreads - this is not your brokers fault, they simply pass through the NBBO. Saving $2,500 on commissions while getting a good rate on the cash sweep is a great deal. Fidelity took Barron's #1 spot in 2016/2017. Their 606 reports look good - no signs of blatant payment for order flow like some brokers. I don't trade commission free ETFs or options. When you use a number of brokers like I do it gives you the best of all worlds since they all seem to have a thing or two they do better than their competition. Getting 10,000 shares filled in a split second directly on the ECN of choice with free L2 is nice, not to mention the first 500 free trades is a killer deal.