Pragmatic Finance

I started this deal last week and it looks really great so far. TD Ameritrade is offering a $500 account opening bonus and 45 free days of trades. You must deposit $10,000 when opening a non-IRA account and qualify for Apex status by making 5 trades per month for 3 months. The deadline is 09/05/06 for the account to be opened and funded. They say you will receive your bonus 3 to 4 weeks after qualify for Apex status and you will keep the bonus as long as you keep $10,000 equity in the account. One thing you must watch out when trading is that you follow day trading regulations. To make a long story short, if you do four or more day trades within a rolling 5 business day period you will classified as a day trader and must keep $25k equity in your account. There is a very long thread at Fatwallet discussing the deal.

I opened this account very earlier last Thursday morning. When I went online around lunchtime my money was already in my account and ready to be traded. A free day of interest on your money never hurts anyone. I made 15 trades and emailed customer service saying that I had made the minimum number of trades and had qualified for apex status. To get the fastest service you should click on the contact us link at the bottom of your account, then select email and put the topic as client services and then apex status. I did this and they emailed me back without an hour or two and told me I had qualified and would get Apex status at the next system update.

It seems that one safe way to do this deal is to buy a stable, low risk stock such as a bond fund. I went with iShares Lehman 1-3 Year Treasury Bond (SHY). Then get your bonus, sell your stocks, and purchase a 9 month CD or a no transaction fee mutual fund with. Your effective interest rate then is 5% + whatever your cd/mutual fund gains. It should be easy to get 8 to 10% interest on your money.

If your experienced and knowledgeable at trading, unlike me, then the 45 free days of trading could be as good or better than the bonus. I played around buying a share or two such as Haliburton (HAL) and Apple (AAPL) and U.S. Oil Fund LP (USO) but I don’t really know what I’m doing at this point Probably best to avoid too much trading if your not experienced.

I put most of my money in SHY. You can also set up your non invested money to be swept into a money market fund through their TAP. You have to mail or fax the Total Asset Plan form to them. There are many choices of Reserve Funds but the Primary Class R seems to be the best for me since I’m not concerned about taxes. You will gain ~4% interest at the time of this post as long as you have 2k in non invested funds. I signed up with it but I’m not sure I will utilize it. I will probably put most of my money into one of their mutual funds, most likely a no fee one, once I start losing money trading stocks.

This is a fantastic deal. Even if you simply left your funds in the Tap account you would be getting about 9% APY for no risk. Of course, you could leave small amount of dough to have a little fun with no commision trading. Just be aware of the day trading rules if you do. If anyone has anything to add, or any tips about maximizing this deal, I’m all ears.