Overview of Firstrade and E*Trade
If you’re looking for a commission-free online broker to trade stocks, ETFs, mutual funds, and options, you might wonder which one is better: E*TRADE or Firstrade.
Both brokers offer many advantages, but there are key differences to consider before deciding which one suits your needs best.
E*TRADE, owned by Morgan Stanley, is a commission-free broker that provides multiple trading platforms, traditional investment choices, various account types, cash management features, and automated investment portfolios. Its comprehensive services and educational materials make E*TRADE appropriate for all levels of investors.
Firstrade, established in 1985, is also a commission-free broker that grants access to different securities, including mutual funds, OTC-listed stocks, and cryptocurrencies. It offers strong research and educational content and a broad selection of account types, such as international brokerage accounts.
Cost Comparison
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
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Firstrade
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$0
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$0
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$0 per contract
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$0
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$0
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Etrade
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$0
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$0
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$0.65 per contract
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$0
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$0
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When it comes to fees, Firstrade is hard to beat because it charges no commissions on every product it offers.
Services Comparison
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
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Firstrade
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Etrade
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Investment Options
Both E*TRADE and Firstrade provide a wide array of securities to trade, including stocks, ETFs, options, mutual funds, bonds, IPOs, and OTC securities.
However, there are also notable distinctions. E*TRADE offers futures trading and managed portfolios, while Firstrade delivers free options trading and a more substantial lineup of OTC BB and OTC Pink securities.
E*TRADE holds an advantage in futures trading, whereas Firstrade shines by offering penny stock transactions and free options trading.
Account Types
Both E*TRADE and Firstrade supply several account types, including individual margin/cash accounts, joint brokerage accounts, traditional and Roth IRAs, rollover IRAs, SEP IRAs, SIMPLE IRAs, and education savings accounts.
Nevertheless, E*TRADE supports a wider range of account options, like beneficiary IRAs, E*TRADE Complete IRAs (with cash management for investors over 59.5), and individual as well as Roth individual 401(k) plans.
Meanwhile, Firstrade offers international brokerage accounts, which E*TRADE does not.
Platforms and Trading Tools
E*TRADE features two web-based platforms, a professional desktop platform, and two mobile apps. These solutions provide tick-based futures charts, advanced order entry, simulated trading, multi-leg option strategies, hotkey trading, and customizable watchlists.
Firstrade, on the other hand, takes a more straightforward route. It provides tools like advanced order entry, portfolio tracking, reliable screeners, and real-time data, but it doesn’t offer a stand-alone trading platform. All trading occurs via its website or mobile app.
E*TRADE is the better option if you want professional-grade trading tools, while Firstrade is generally sufficient for most strategies that do not require complex platforms.
Cash Management Solutions
Both brokers provide a free debit card, cash transfers, online bill pay, and check deposit services. However, they differ in how they deliver their cash management features.
E*TRADE is linked to the banking products of its parent company, Morgan Stanley. This setup delivers everything you expect from a checking account, plus seamless access to your brokerage balance with a debit card and easy money transfers.
Firstrade partners with Apex to add cash management to your brokerage account. You can get a Visa debit card for purchases and deposits, all without needing a separate account, but you have to keep at least $25,000 to unlock the feature. E*TRADE does not impose any balance requirement for its checking services.
Fees, Margin, and Commissions
Generally, Firstrade is less expensive than E*TRADE. Here are a few of their main pricing differences:
Both E*TRADE and Firstrade charge no commissions for options and mutual funds, but E*TRADE adds a $0.65 fee for each options contract, while Firstrade does not.
E*TRADE requires $1.5 per futures contract, while Firstrade does not offer futures trading.
E*TRADE charges $1 per bond with a $10 minimum, while Firstrade handles fixed-income on a net yield basis.
E*TRADE’s managed portfolios cost 0.30%, whereas Firstrade does not have managed portfolios.
E*TRADE’s margin rates span from 11.2% up to 13.2%, while Firstrade’s margin rates range from 8.75% to 12.75%.
Both brokers have a $75 fee for outgoing ACATs, but Firstrade also has a $55 partial ACAT fee.
Ease of Use
When it comes to simplicity, both E*TRADE and Firstrade work well for investors at any skill level. They each have a traditional brokerage website where users can conduct research, access educational materials, place trades, and manage their holdings.
However, E*TRADE also supplies advanced software that is more fitting for seasoned traders.
Promotions
Firstrade: 3% match on contributions and 2% on transfers with a No-Fee IRA.
E*Trade:
Get zero commission on stock and ETF trades.
E*TRADE and Firstrade: Pros and Cons
Choosing between E*TRADE and Firstrade depends on your goals and preferences. Below are some advantages and disadvantages for each:
E*TRADE Pros
- Offers a variety of account types, including individual and Roth individual 401(k) plans.
- Has futures trading and managed portfolios.
- Delivers advanced trading platforms and tools.
- Does not require any balance for its checking account add-on.
E*TRADE Cons
- Charges $0.65 per contract for options trading.
- Has higher margin rates compared to Firstrade.
- Applies a 0.30% fee for managed portfolios.
Firstrade Pros
- Features lower fees compared to E*TRADE.
- Does not charge contract fees for options.
- Offers fixed income investments on a net yield basis.
- Has margin rates that are lower than E*TRADE’s.
Firstrade Cons
- Requires a $25,000 minimum account balance for its cash management service.
- Does not provide futures trading.
- Does not offer managed portfolios.
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