What TD Bank offers for retirement savings

TD Bank offers retirement accounts through its brokerage division, TD Ameritrade (now operating under the Charles Schwab umbrella after the 2020 acquisition). You can open a Traditional IRA, Roth IRA, SEP IRA, or Solo 401(k) through TD Ameritrade, depending on your employment status and income. TD Bank itself, as a traditional bank, does not offer IRAs or 401(k)s directly — those products come through the brokerage side.

If you have a TD Bank checking or savings account, you can link it to a TD Ameritrade retirement account for transfers and deposits. The retirement accounts themselves hold investments like stocks, bonds, mutual funds, and ETFs rather than cash deposits. This means the growth of your retirement money depends on what you invest in, not on a fixed rate set by the bank.

Key Takeaways

  • TD Bank retirement accounts are managed through TD Ameritrade, a brokerage firm, not through the bank's deposit products.
  • You can open a Traditional IRA, Roth IRA, SEP IRA, or Solo 401(k) depending on whether you are self-employed or work for an employer.
  • Contribution limits for 2024 are $7,000 for IRAs (or $8,000 if you are 50 or older) and higher for Solo 401(k)s, which vary by your business income.
  • TD Ameritrade charges no account maintenance fees for IRAs but does charge per-trade commissions on some investments, so compare costs before opening.
  • Your TD Bank checking account can link to your retirement account for deposits, but the two accounts serve different purposes and have different tax rules.

Account types available through TD Ameritrade

A Traditional IRA lets you contribute pre-tax money, which lowers your taxable income in the year you contribute. You pay taxes on withdrawals in retirement. You must begin taking withdrawals at age 73 (as of 2023, under the find 2.0 Act). There is no income limit to open one, but the tax deduction phases out if you or your spouse have a workplace retirement plan and earn above a certain income.

A Roth IRA works the opposite way: you contribute after-tax money, and withdrawals in retirement are tax-free. You can withdraw your contributions (not earnings) at any time without penalty. There is no required withdrawal age. However, your income must fall below a limit to contribute directly — for 2024, that limit is $161,000 for single filers and $240,000 for married filing jointly, though these numbers change yearly.

A SEP IRA is for self-employed people or small business owners. You can contribute up to 25% of your net self-employment income, with a 2024 maximum of $69,000. This account has no employee involvement — only you contribute. A Solo 401(k) is also for self-employed people with no employees (except a spouse) and allows both employee and employer contributions, potentially reaching $69,000 in 2024 if your business income supports it.

How TD Ameritrade retirement accounts compare to other banks

Most traditional banks like Bank of America, Wells Fargo, and Chase do not offer IRAs or 401(k)s at all. They offer savings accounts and CDs, which are deposit products with FDIC insurance but much lower returns. If you want a retirement account at a traditional bank, you typically have to go to the bank's brokerage affiliate — just as you do with TD Bank and TD Ameritrade.

Online banks like Fidelity, Schwab, and Vanguard operate as both brokerages and custodians, so opening a retirement account is more direct. They do not have separate "bank" and "brokerage" divisions the way TD does. Some credit unions offer IRAs directly, though usually with limited investment options compared to a full brokerage.

TD Ameritrade charges no annual account maintenance fee for IRAs, which matches most competitors. However, it does charge per-trade commissions on some stock and options trades, whereas Fidelity and Schwab offer commission-free stock and ETF trades. If you plan to trade frequently or hold individual stocks, those commissions add up. If you buy mutual funds or ETFs and hold them long-term, the difference may not matter.

Contribution limits and tax treatment

For 2024, you can contribute $7,000 to a Traditional or Roth IRA if you are under 50, or $8,000 if you are 50 or older. These limits reset each year and are set by the IRS. You can contribute to both a Traditional and Roth IRA in the same year, but your combined contributions cannot exceed the annual limit.

For a SEP IRA, the limit is 25% of your net self-employment income or $69,000 in 2024, whichever is less. For a Solo 401(k), you can contribute as an employee (up to $23,500 in 2024, or $31,000 if 50 or older) plus as an employer (up to 25% of net self-employment income), with a combined limit of $69,000.

Traditional IRA and 401(k) contributions may be tax-deductible in the year you make them, which lowers your taxable income. Roth contributions are not deductible, but the money grows tax-free. When you withdraw in retirement, Traditional accounts are taxed as ordinary income, while Roth withdrawals are tax-free if you have held the account for at least five years and are 59½ or older.

Withdrawal rules and penalties

You can withdraw from a Traditional IRA or 401(k) penalty-free starting at age 59½. If you withdraw before that age, you owe a 10% early withdrawal penalty plus income tax on the amount withdrawn, with some exceptions (first-time home purchase up to $10,000, disability, medical expenses over 7.5% of income, and a few others).

A Roth IRA is more flexible: you can withdraw your contributions at any time without penalty or tax. You can only withdraw earnings penalty-free after age 59½ and if the account has been open for at least five years. If you withdraw earnings early, you owe the 10% penalty and income tax.

Starting at age 73, you must take required minimum distributions (RMDs) from Traditional IRAs and 401(k)s. The amount is calculated based on your age and account balance. Roth IRAs have no RMD during the account holder's lifetime. If you do not take your RMD, the IRS charges a 25% penalty on the amount you should have withdrawn (reduced to 10% if you correct it within two years).

How to open and fund a TD Ameritrade retirement account

You open a TD Ameritrade retirement account online through the TD Ameritrade website, not through a TD Bank branch. You will need your Social Security number, employment information, and funding source (bank account, check, or transfer from another retirement account). The process typically takes a few minutes to complete online.

You can fund the account by linking a bank account and transferring money, mailing a check, or rolling over money from another retirement account (such as an old 401(k) or IRA at another institution). A rollover is a direct transfer from one custodian to another and avoids taxes and penalties. If you take the money out yourself and deposit it, you have 60 days to deposit it into a new retirement account or you owe taxes and penalties on the full amount.

Once the account is open and funded, you choose what to invest in — stocks, bonds, mutual funds, ETFs, or a mix. TD Ameritrade does not manage the money for you unless you pay for an advisory service. You make the investment decisions yourself, or you can use a robo-advisor (an automated investment service) for an additional fee.

Fees and costs to consider

TD Ameritrade charges no annual account maintenance fee for IRAs or 401(k)s. However, it charges $6.95 per trade for stocks and $6.95 per options contract, though some mutual funds and ETFs trade commission-free. If you plan to buy and hold a diversified portfolio of ETFs, you may pay nothing in trading fees. If you trade individual stocks frequently, the commissions will reduce your returns.

Some investments also carry internal expense ratios — a yearly fee charged by the fund itself, expressed as a percentage of your balance. A fund with a 0.05% expense ratio costs $5 per year on a $10,000 balance, while a 1% expense ratio costs $100 on the same balance. Over decades, the difference compounds significantly.

If you use TD Ameritrade's advisory services (such as managed portfolios or financial planning), those carry additional fees, typically ranging from 0.30% to 1% of assets under management per year. You are not required to use these services — they are optional.

Frequently Asked Questions

Can I move money from a TD Bank savings account into a TD Ameritrade retirement account?

Yes, you can link your TD Bank checking or savings account to your TD Ameritrade retirement account and transfer money between them. However, the money in your retirement account must be invested in stocks, bonds, or funds — it cannot sit as cash earning savings account interest. The two accounts have different tax rules and withdrawal restrictions.

What happens to my TD Ameritrade retirement account if I close my TD Bank account?

Your retirement account and bank account are separate. Closing your bank account does not affect your retirement account. You can still access and manage your retirement account through TD Ameritrade. If you need to deposit more money, you can link a different bank account.

Does TD Ameritrade offer investment information for retirement accounts?

TD Ameritrade offers optional advisory services, including robo-advisor portfolios and financial planning consultations, but these charge additional fees. You can also manage your retirement account yourself by choosing your own investments. Many people use target-date funds (funds that automatically shift from stocks to bonds as you near retirement) as a straightforward self-directed option.

Can I have both a Traditional and Roth IRA at TD Ameritrade?

Yes, you can open both a Traditional and Roth IRA at TD Ameritrade. Your combined contributions to both accounts cannot exceed the annual limit ($7,000 or $8,000 if 50 or older in 2024). For example, you could contribute $4,000 to a Traditional IRA and $3,000 to a Roth IRA in the same year.

What if I have a 401(k) from a previous employer — can I roll it into a TD Ameritrade IRA?

Yes, you can roll over a 401(k) from a former employer into a Traditional IRA at TD Ameritrade. This is called a rollover and is a direct transfer from your old plan to TD Ameritrade. You do not owe taxes or penalties on a rollover. You cannot roll a 401(k) into a Roth IRA without paying taxes on the amount converted, though this is called a Roth conversion and is allowed.