Since 2018, TD Ameritrade (TD) has served as Prudent Investors’ custodian for the assets of its clients.
Charles Schwab (Schwab) declared in November 2019 that they would be purchasing TD Ameritrade through an all-stock acquisition. The acquisition of TD Ameritrade by Schwab, which promised reduced operating costs and an improved customer experience, was scheduled to close in the second half of 2020, with integration activities beginning soon after. Nearly four years after the original announcement, Schwab is now prepared to complete the move. Beginning on September 2, 2023, TD accounts will switch over to Schwab.
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In 2019, The Charles Schwab Corporation acquired TD Ameritrade and its related businesses. Since then, both companies have been working diligently to integrate their services and platforms, culminating in a seamless transition of TD Ameritrade accounts to Schwab. This article provides a comprehensive overview of the transition process, outlining key dates, account changes, and benefits for TD Ameritrade clients.
Key Dates and Transition Process
The transition of TD Ameritrade accounts to Schwab will occur in phases, with the first group of accounts moving on or about Tuesday, September 5, 2023 Clients will be notified approximately three months in advance of their specific transition date via email or mail, depending on their communication preferences
During the transition weekend, your assets (cash and securities positions) will be securely transferred to Schwab You will be able to access, trade in, and withdraw cash from your TD Ameritrade account until Friday, September 1, 2023, at 8:30 pm. ET. After that, your account will be temporarily unavailable while the transition takes place.
On the following Monday, September 4, 2023, your account will be accessible on Schwab platforms, including Schwab.com, the Schwab Mobile app, and the thinkorswim suite of platforms. You will use your existing Schwab Login ID and password to access your account.
Account Changes and Benefits
Upon transitioning to Schwab, your TD Ameritrade account will be enrolled in the Schwab Cash Features Program. This program offers two cash management options:
- Schwab Bank Sweep: Your uninvested cash will be automatically swept into an interest-bearing deposit account at one or more Program Banks, allowing you to earn interest while deciding how to invest your funds.
- Schwab One® Interest: Your Free Credit Balance will earn interest, providing you with additional earning potential.
Both options offer FDIC insurance within applicable limits, ensuring the safety of your cash holdings.
Furthermore, you will benefit from Schwab’s commitment to low pricing, exceptional service, world-class trading and investing experiences, and a comprehensive range of wealth management solutions.
Frequently Asked Questions
How will I know when my account is moving?
You will receive a notification approximately three months before your transition date, either by email or mail. You can also check your transition date by logging in to your TD Ameritrade account.
How and where will I access my account after it becomes a Schwab account?
You will access your account on Schwab platforms, including Schwab.com, the Schwab Mobile app, and the thinkorswim suite of platforms, using your existing Schwab Login ID and password.
What will happen to my pricing at Schwab?
Schwab is committed to offering competitive pricing, and most TD Ameritrade clients will experience pricing that is the same or better when they move to Schwab.
Will I have access to the thinkorswim platform at Schwab?
Yes, the thinkorswim suite of platforms is now available at Schwab, providing you with advanced trading tools and analysis capabilities.
The transition of TD Ameritrade accounts to Schwab represents a significant milestone in the integration of the two companies. By leveraging Schwab’s robust platform, competitive pricing, and commitment to client service, TD Ameritrade clients can expect a seamless and beneficial transition to their new financial home.
For our Individual Clients:
Will my ACH and direct deposit instructions need to be changed?
As part of the merger, individual accounts’ existing TD Ameritrade wires, checks, ACH, and internal transfer standing instructions will be transferred.
If you set up direct deposit instructions at your bank, you’ll need to update those instructions with the details of your Schwab account, which you should get by the end of August.
If you require Schwab’s routing numbers or addresses to set up your direct deposit instructions at your local institution, please get in touch with us. The bank instructions are available in the appendix below as well.
Will my retirement account instructions for distribution and contributions carry over?
The majority of instructions for regular contributions and distributions, including those for traditional and Roth IRA accounts, will transfer over without any problems. However, there are some exceptions. ACH contribution instructions for individual 401(k) and SEP retirement accounts, as well as internal transfers for ACH contributions to SIMPLE IRA accounts, will not be carried over.
For our Fiduciary Clients:
Will my Trust Accounts transfer over?
There won’t be any additional steps needed on your end for the transfer of trustee information and trust accounts.
Will my bank instructions from my trust account transfer over? Yes, ACH instructions from trust accounts will transfer over. Any checking and/or debit card features that are currently associated with your TD account will also transfer over.
Will my Conservatorship, Guardianship, and Estate accounts transfer over?
These accounts will move over smoothly thanks to our coordination with Schwab. Nevertheless, Schwab’s platform configuration prevents the creation of new ACH instructions for conservatorship, guardianship, and estate accounts as well as the transfer of existing ACH and bank account instructions.
How can money be accessed for accounts related to guardianship, conservatorship, and estates?
Schwab permits wire transfers or check writing for these accounts to be used to send money. If started through Schwab online, wire transfers are free; however, the receiving bank may charge a fee. We will be in contact with you for accounts affected by Schwab’s ACH policies to help you add checks or wiring instructions to your accounts.
Another choice is to register for an operating account with Schwab Bank and then journalize money from the Schwab brokerage account to the Schwab operating bank account. Kindly get in contact with us after September 1 if this piques your interest.
Will I receive multiple tax documents?
Yes, for the 2023 tax year, you will receive two 1099s. For the period of January 1, 2023 to September 1, 2023, TD Ameritrade will issue a 1099. For the period of September 2, 2023 to December 31, 2023, Schwab will issue a 1099. It is advised that you let your accountant know that the merger will result in multiple 1099s.
The accountant should also be aware that in the next month or so, TD’s accounts will probably be swept of residual transactions related to dividends, which will go to Schwab.