Firstrade

$0 minimum investment amount

Investment platform offering $0 commission trades.

*The value of your investment can go down as well as up, and you can get back less than you originally invested.

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Platform Details

All investment platforms are made differently. It's important to understand what features are on offer and the features that best align with your needs.

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1. Cost & Fees

Fees and costs associated with using Firstrade are as follows:

Trading Fees: Firstrade offers commission-free trading for stocks, ETFs, options, and mutual funds.

Mutual Funds: There is a short-term redemption fee of $19.95 for mutual fund shares held for less than 90 days. Additionally, redemptions of less than $500 incur a $19.95 fee unless the entire value of the fund is under $500​.

Broker-Assisted Trades: If you need a broker’s help to complete a trade, there is a fee of $19.95 per transaction for stocks, ETFs, and options, with an additional $0.65 per options contract​.

IRA and Account Fees: There are no fees for account maintenance, inactivity, or for setting up or maintaining IRA accounts. However, closing an IRA incurs a $50 fee, and conversions or recharacterizations between IRAs have a $25 fee​.

Other Services: Fees for other services include $30 for domestic wire transfers, $35 for international wire transfers, and $20 for check writing annually. Debit card usage incurs a $35 annual fee​.

For more detailed and specific information, you can visit https://www.firstrade.com/

2. Minimum amount needed to invest

There is no minimum amount needed to open a brokerage account with Firstrade.

For more detailed and specific information, you can visit https://www.firstrade.com/

3. Number of funds and stocks available

Firstrade offers a substantial selection of funds and stocks for its investors, including:

  • Access to a wide range of stocks
  • Over 11,000 mutual funds
  • Access to over 2,200 commission-free ETFs

For more detailed and specific information, you can visit https://www.firstrade.com/

4. Types of securities available

Firstrade offers a wide range of securities for its investors, providing access to various asset classes and investment options, including:

  • Stocks
  • Mutual Funds
  • Exchange-Traded Funds (ETFs)
  • Options
  • Fixed Income Securities
  • Cryptocurrencies
  • Certificates of Deposit (CDs)
  • Money Market Funds

For more detailed and specific information, you can visit https://www.firstrade.com/

5. Does the platform offer individual stocks?

Yes

For more detailed and specific information, you can visit https://www.firstrade.com/

6. Types of investment accounts available 

Firstrade offers a variety of investment accounts to cater to different financial goals and needs. Here are the main types of investment accounts available on Firstrade:

Individual and Joint Brokerage Accounts:

  • Individual Brokerage Account: Allows individual investors to buy and sell a wide range of securities, including stocks, bonds, mutual funds, and ETFs.
  • Joint Brokerage Account: Similar to individual accounts but shared by two or more individuals, often used by spouses or business partners.

Retirement Accounts:

  • Traditional IRA: Provides tax-deferred growth on investments, with contributions potentially being tax-deductible.
  • Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals are tax-free.
  • Rollover IRA: Allows for the consolidation of retirement savings from other accounts, such as 401(k) plans, into an IRA without tax penalties.
  • SEP IRA: Simplified Employee Pension plan for self-employed individuals or small business owners, offering tax-deferred growth and higher contribution limits than traditional IRAs.
  • SIMPLE IRA: Savings Incentive Match Plan for Employees, designed for small businesses with up to 100 employees, allowing both employer and employee contributions​.

Education Savings Accounts:

  • Coverdell Education Savings Account (ESA): Offers tax-free growth and tax-free withdrawals for qualified education expenses, making it a good option for saving for a child's education.

Custodial Accounts:

  • UGMA/UTMA Accounts: Uniform Gifts to Minors Act/Uniform Transfers to Minors Act accounts allow parents or guardians to transfer assets to a minor, which the child can access when they reach the age of majority.

Trust Accounts: Designed to manage and protect assets on behalf of beneficiaries according to the terms of a trust agreement.

For more detailed and specific information, you can visit https://www.firstrade.com/

7. Does the platform offer automatic portfolio rebalancing? 

No

For more detailed and specific information, you can visit https://www.firstrade.com/

8. Does the platform offer a mobile app?

Yes

For more detailed and specific information, you can visit https://www.firstrade.com/

9. Is the platform insured by the Securities Investor Protection Corporation (SIPC)?

Yes

For more detailed and specific information, you can visit https://www.firstrade.com/

10. How to pick an investment platform

Key factors to consider when choosing an investment platform:

  • Fees and commissions
  • Available investment options
  • User interface and ease of use
  • Customer support options
  • Security measures in place
  • Research and analysis tools available
  • The platforms reputation and track record
  • A platform that aligns with your investment goals
  • A platform that aligns with your risk tolerance

*The value of your investments can fall as well as rise and past performance is not a guide to future performance.

11. How to pick an investment fund

Key factors to consider when choosing an investment fund:

Investment Objectives: Clearly define your investment goals and time horizon. Different funds cater to various objectives, such as growth, income, or a balanced approach.

Risk Tolerance: Assess your risk tolerance. Some funds are more conservative, while others are more aggressive. Choose a fund that aligns with your comfort level for risk.

Diversification: Look for funds that provide a diversified portfolio. Diversification helps spread risk across different asset classes, reducing the impact of poor performance in any single investment.

Fund Type: Understand the type of fund you're considering. Common types include mutual funds, exchange-traded funds (ETFs), index funds, and actively managed funds. Each has its own characteristics and management styles.

Performance History: Review the fund's historical performance. While past performance doesn't guarantee future results, it can give you insights into how the fund has performed in various market conditions.

Expense Ratio: Consider the fund's expense ratio, which represents the annual fees and operating expenses as a percentage of the fund's assets. Lower expense ratios generally translate to lower costs for investors.

Manager's Track Record: For actively managed funds, assess the track record and experience of the fund manager. Consistent and experienced management can be an indicator of the fund's potential.

Benchmark Comparison: Compare the fund's performance against a relevant benchmark index. This helps you evaluate whether the fund is outperforming or underperforming its peers.

Distribution History: For income-focused funds, check the fund's distribution history. Understand how often and how much income the fund has distributed in the past.

Size of the Fund: Consider the size of the fund. While a large fund may offer stability, it could also face challenges in deploying capital efficiently. Conversely, a small fund might be more nimble but could face liquidity issues.

Redemption Fees and Liquidity: Be aware of any redemption fees or liquidity constraints. Some funds may charge fees for early withdrawals, and illiquid funds may have limitations on how quickly you can access your money.

Tax Efficiency: Assess the fund's tax efficiency, especially if you're investing in a taxable account. Funds with low turnover and tax-efficient strategies can help minimize tax implications.

Distribution Method: Determine whether the fund distributes income and capital gains periodically or reinvests them. Your preference might depend on your financial goals and tax situation.

Reviews and Ratings: Read reviews and ratings from reputable sources, such as Morningstar or Lipper. These sources provide independent assessments of funds based on various criteria.

Exit Strategy: Understand the fund's exit strategy. If your investment goals change, ensure that the fund allows for a smooth exit without excessive penalties.

*The value of your investments can fall as well as rise and past performance is not a guide to future performance.

12. Understanding Fees

Understanding investing fees is essential for investors to make informed decisions and maximize their investment returns.

Here are some common investing fees you should be aware of:

Management Fees: These fees are charged by investment managers or advisors for managing your investment portfolio. Management fees are typically charged annually as a percentage of the assets under management (AUM). They cover the cost of research, analysis, and portfolio management services provided by the investment professional.

Expense Ratios: Expense ratios represent the annual operating expenses of mutual funds, exchange-traded funds (ETFs), and other investment funds as a percentage of the fund's average net assets. These expenses include management fees, administrative costs, and other operational expenses. Expense ratios are deducted from the fund's returns and directly impact investors' net returns.

Front-End Loads: Front-end loads are sales charges or commissions paid when purchasing mutual fund shares. Front-end loads are deducted from the initial investment amount before the remaining funds are invested in the fund. These fees are typically expressed as a percentage of the investment amount and are paid to the investment advisor or broker who sold the fund.

Back-End Loads (Deferred Sales Charges): Back-end loads are sales charges or commissions paid when redeeming or selling mutual fund shares within a specified period after purchase, typically within a few years. Unlike front-end loads, back-end loads are not deducted at the time of purchase but are applied when investors sell their fund shares. These fees often decline over time and eventually reach zero after the specified holding period.

Transaction Fees: Transaction fees are charged by brokerage firms or trading platforms for buying or selling securities, such as stocks, bonds, options, or mutual funds. These fees can vary depending on the type of transaction, the size of the trade, and the brokerage firm's fee structure. Transaction fees can significantly impact the overall cost of trading and should be considered when executing investment transactions.

Advisor Fees: Advisor fees are charges levied by financial advisors or investment professionals for providing investment advice and financial planning services. Advisor fees can be charged as a flat fee, hourly rate, or as a percentage of assets under management (AUM). These fees compensate advisors for their expertise and guidance in managing clients' investment portfolios and financial affairs.

Account Maintenance Fees: Some brokerage firms or investment platforms may charge account maintenance fees for managing or maintaining investment accounts. These fees are typically assessed on an annual or quarterly basis and cover administrative expenses associated with account management, record-keeping, and customer service.

*Understanding and minimizing investing fees is crucial for maximizing investment returns over the long term. Investors should carefully review fee disclosures, compare fee structures across different investment options, and consider the impact of fees on their investment performance and overall financial goals.

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