Firstrade Commissions, Fees, and Minimum Deposit
|Stocks and ETFs|| $6.95|
|Stocks, ETFs, and mutual funds broker assisted|| $19.95|
|Options|| $6.95 + $0.75 per contract|
|Mutual funds|| $9.95|
|Treasury Bills, Notes, Municipal and Agency Bonds, Zeros & Strips|| net yield basis|
|CDs|| $30 for primary market CDs, net yield basis for secondary market CDs|
Firstrade Mutual Funds Review
We will begin Firstrade review with a look at mutual funds offerings. Firstrade clients will find 8,340 mutual funds available for purchase on
the broker's website. Of these, over 3,200 have no load. There are
approximately 300 funds at the company that have no transaction fee. The broker does have a screener to navigate through these choices. Strangely,
the screener doesn't have the capability to search for NTF funds. It can be used to search for no-load funds. Other criteria that can be selected
include manager tenure, return history, Morningstar rating, portfolio turnover, and total assets. The screener's results can be sorted by all of
these criteria. Other mutual fund resources on the Firstrade website include one article on mutual funds and a glossary that includes mutual fund
terminology. Compared to TD Ameritrade and
Fidelity, Firstrade lacks good-quality mutual fund resources.
Firstrade has no charge for mutual funds with low balances. However, the firm does impose a $19.95 charge for selling any mutual fund less than
3 months after buying it. Moreover, sales of any fund held for any length of time will also incur a $19.95 charge if the proceeds are less than
$500, unless the entire fund balance is under $500. Funds that carry a transaction fee cost $9.95 to buy and sell. Load funds are always free to
At Firstrade, investors can open a Traditional, Roth, SEP, SIMPLE, or Rollover IRA. The broker requires nothing to open an account, and there are
no setup, annual, maintenance, or inactivity fees. There is also no low-balance fee. Closing an IRA is $50, and Roth IRA conversion are $25.
The Firstrade website has several good resources for retirement account holders. There is a retirement planning calculator that determines the
total amount a user will save for retirement based on several inputs, such as expected rate of return and age at retirement. A Roth IRA conversion
tool assesses the advisability of converting a Traditional IRA to a Roth account. It does that by analyzing various criteria, such as income tax
bracket and current IRA balance. The broker also provides articles that discuss important retirement issues, such as rolling over a 401(k) to an IRA.
Firstrade Website/Trading Platform/Tools Review
Firstrade brokerage trading tools are not impressive. They are clearly behind the curve in sophistication and power when comparing to competition.
The firm does not offer smart-order routing technology which means that clients might not get the best price when executing orders. Few educational
resources are available on the website.
However, we liked how the website is designed, with intuitive, clean look. We could usually find everything there reasonably quickly.
Firstrade’s mutual fund research tool pulls data from Morningstar. The broker has screeners for ETF’s, mutual funds, and stocks. The screener
for mutual funds does not have an option to search for no-transaction-fee funds, making NTF funds at Firstrade difficult to locate. Overall,
investment research is about average.
Unlike most of its competitors Firstrade is not offering an advanced trading platform at this time.
The iPhone and Android apps, and the mobile trading site (m.firstrade.com) are available but they are limited in functionality: there is no option
to transfer funds, make a mobile check deposit, or pay bills. Both apps are rated by the users of the Google Play and iTunes at about 3 stars
out of 5.
- Low mutual fund transaction commission
- $0 minimum to open an account
- No account maintenance or inactivity fees
- No annual or setup fees for IRA accounts
- Free dividend reinvestment plan (DRIP)
- Easy to use, clean website
- 10 ETFs are available commission free
- Expensive commissions for stocks under $1
- Limited trading tools; no advanced trading platform
- Short term redemption fee of $19.95 will be applied to redemptions of no-load fund shares held less than 90 days
- Short after-hours trading period: 4:05 pm - 5:25 pm EST, instead of 4:00 pm - 8:00 pm EST
Compared to other brokers, it's difficult to recommend Firstrade. Some customers may prefer its low $6.95 stock and ETF trades. Also, it's $9.95
charge for transaction-fee funds is lower than what other brokers usually charge for the same product. TD Ameritrade, for example, charges $49.99
for transaction-fee funds on both the buy and sell sides.
Firstrade Review Summary
Firstrades' flat rate $6.95 per trade commission for stocks and ETFs is about average in the industry. However, with a 0.5 cent per share
surcharge for stocks priced under $1, penny stock trades are very expensive. Placing a trade with a living, breathing broker is available, and tacks on
an extra $13.
Firstrade offers 12 ETF’s from Vanguard, iShares, and Powershares that are free to trade. There is a 10 share minimum with these commission-free ETF’s, and the
shares must be held at least 30 days. One of the 12 ETF’s is IVV, iShare’s passively-managed S&P 500 index fund, which carries a very low 0.07% expense ratio.
Mutual funds that carry a load have no transaction fee. Funds that are no-load come with very low $9.95 transaction fee on both the buy and sell
ends. Some mutual funds have neither load nor transaction fee (NTF program), making them free to trade.
Many mutual funds that normally have a $2,500 minimum purchase requirement are available for purchase in Firstrade accounts with a low $500 minimum.
A short-term redemption fee of $19.95 is applied to redemptions of mutual fund shares that are held at Firstrade less than 90 days. Mutual fund
redemptions of less than $500 will incur a $19.95 fee, unless the entire value of the redeemed fund is less than $500.
Firstrade now offers cash management services, but the required account equity is a staggering $25,000, an enormous
amount compared to other brokerages such as Fidelity and Schwab that offer excellent cash management accounts with no minimums. Firstrade’s cash
management account comes with checks and a Visa gold debit card.
Customer service can be contacted via an on-line chat system, phone, fax, e-mail, and snail mail. The chat and
phone service is available Monday through Friday, 8:00 AM - 6:00 PM EST.
Firstrade offers customer service to both English and Chinese speakers. Phone service is available in Mandarin, Cantonese, and English. The web
site and trading platform are available in English, Traditional Chinese, and Simplified Chinese.
The online broker does have some basic educational resources for the self-directed investor. Clients will find a glossary, videos, e-books,
and podcasts on topics ranging from options to margin.
In summary, the two areas where the company is at the top of the list among many competitors is in transaction-fee mutual funds commission rate
(matched by TradeKing and Optionsxpress)
and in offering service in Chinese language. For this reason we recommend Firstrade brokerage for long term mutual funds investors.
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