Brokerage Accounts With No Minimum Balance


Stock brokerage account minimums balance requirements. Discount online investment, trading firms with no minimum balance.



Online Brokerage Account Minimums


Brokerage Rating Brokerage Minimum Deposit to Open Account Brokerage Minimum Account Balance
Ally InvestAlly Invest rating

$0 cash account, $2,000 margin account$0
TD AmeritradeTD Ameritrade rating

$0 cash account, $2,000 margin account$0
Capital One InvestingCapital One Investing rating

$500 cash account, $2,000 margin account$0
Charles SchwabCharles Schwab rating

$1,000 cash account, $2,000 margin account$0
ChoicetradeChoicetrade rating

$0 cash account, 2,000 margin account$0
EtradeEtrade rating

$500 cash account, $2,000 margin account$0
FidelityFidelity Investments rating

$2,500 cash account, $2,500 margin account$0
FirstradeFirstrade rating

$0 cash account, 2,000 margin account$0
Interactive BrokersInteractive Brokers rating

$10,000 cash account, 10,000 margin account$2,000
Just2tradejust2trade rating

$2,500 cash account, 2,500 margin account$2,500
Lightspeed TradingLighspeed Trading rating

$5,000, $10,000 and $25,000 Web Trader, RealTick and Trader plans respectively$2,500
Merrill EdgeMerrill Edge rating

$0 cash account, 2,000 margin account$0
Motif InvestingMotif Investing rating

$0 cash account, 2,000 margin account$0
Muriel SiebertMuriel Siebert rating

$0 cash account, 2,000 margin account$0
RobinhoodRobinhood Trading rating

$0 cash account, $2,000 margin account$0
ScottradeScottrade rating

$2,500 cash account, 2,500 margin account$0
SogotradeSogotrade rating

$500 cash account, $2,000 margin account$0
TradeStationSogotrade rating

$500 cash account, $2,000 margin account$0
USAAUSAA rating

$0 cash account, $2,000 margin account$0
VanguardVanguard rating

$0 cash account, $2,000 margin account$0
WellstradeWellstrade rating

$0 cash account, $2,000 margin account$0


Overview of Brokerage Account Minimums


Brokerage houses frequently require various minimums from their account holders. These include minimum balances for both margin and cash accounts, taxable and non-taxable accounts, along with minimum initial deposits. This article will look at these requirements and see how they differ from account to account and from broker to broker.


Minimum Initial Deposit Requirement


To open a securities account, some broker-dealers will require a minimum deposit of funds when an application is submitted. This policy is no different than the requirements of some banks when opening a checking or savings account. A checking account might require a $25 deposit to open, while a savings account might require $500 or more. Similarly, some brokerage firms will require a minimum deposit to open a trading account.

If you do not submit the required level of funding, the account will not be opened. The purpose of such a policy is to compensate the broker for the labor required to open the account. Brokerage firms earn revenue from the cash that is deposited into its trading accounts. They do this from any number of ways.

For example, they may earn more interest than they pay on free cash balances. Or if the funds are used to buy stocks or ETF’s, they will earn income from the transaction. If the initial deposit is used to buy a mutual fund, the broker will make money off of the mutual fund trade. So the initial deposit requirement is there to ensure the broker is making a minimum level of income from the accounts it offers.


Minimum Account Balance for Cash Accounts


A brokerage account without margin is usually called a cash account at most securities firms. This simply means that the account must pay for purchases with cash instead of a loan. A few broker-dealers will impose a minimum balance requirement for these types of accounts, while most others do not.

Some traditional brokerage houses like Merrill Lynch Wealth Management or Raymond James will have a minimum balance requirement to start service. On-line discount brokerage firms are less likely to impose such a requirement today, although they may provide discounts to accounts that have a minimum balance.

For example, although Ally Invest does not have a minimum balance requirement for a cash account, it does give a $1 discount on stock and ETF trades to clients who have at least $100,000 in assets. TradeStation also does not have a minimum balance requirement, but it waives its annual $50 fee for accounts that maintain a $2,000 balance.


Required Balance for Margin Accounts


A margin account has a special feature that cash accounts don’t have: the ability to buy securities without any cash in the account. Securities that are held in a margin account serve as collateral for loans, which can be a cash withdrawal or the purchase of more securities.

FINRA, the brokerage industry watchdog in the U.S., requires that a margin account have at least $2,000 in assets before margin can be used. Brokerage firms can increase this minimum if they wish. This minimum is often called initial margin.

After an asset has been purchased on margin, a second minimum balance kicks in. This one is called maintenance margin, and it requires that an account keep at least 25% of a borrowed security’s market value on deposit in cash or other securities. As with initial margin, FINRA establishes the 25% minimum, but brokerage firms can increase it.


Pattern Day Traders


FINRA defines a pattern day trader as anyone who places four or more trades for the same security per day over a one-week period. Broker-dealers monitor their accounts, and any account that meets this definition will be required (by FINRA regulation) to have at least $25,000 in assets. FINRA also requires pattern day traders to use a margin account.

As with the other minimums, brokerage houses can increase the $25,000 account minimum if they wish. A broker can also designate an account a pattern day trading account if it “has a reasonable basis to believe” that the account will eventually meet FINRA’s definition.


Options and Futures Accounts


Some brokers will also impose account minimums if you want to trade derivative contracts. There is no government-imposed or FINRA-required minimum on this one, but some brokerage houses may have their own minimums. For example, Lightspeed Trading requires a $10,000 balance for accounts that trade option contracts.

Futures accounts also have their own minimums. Some companies may require just a $500 deposit to open an account, while others may require as much as $10,000. Futures contracts also have initial and maintenance margin requirements that must be met. These vary by contract.


Minimum Balance Requirements for Individual Retirement Accounts (IRA’s)


Brokerage firms sometimes impose different account minimums for non-taxable accounts, such as IRA’s. Retirement accounts are generally more expensive for brokerages to service, so these accounts can have higher fees and minimum balance requirements than taxable accounts carry. IRA fees are more common nowadays, as most brokers have eliminated retirement account minimums.

Edward Jones charges $40 each year for an Individual Retirement Account, but does not have a minimum balance requirement. Other companies charge a fee to close an IRA. Raymond James clients, for instance, must pay $100 to close a non-taxable account.


Brokerage Account Minimums Summary


Each brokerage firm has its own policies regarding fees, minimums, and other requirements. The move in recent years has been to reduce these policies, and in many cases, they have been eliminated. Nevertheless, broker-dealers have to make money somehow, and so some fees will always exist. Be sure to do plenty of homework before you open an account. Firms usually publish their fee schedules on-line. If you have any questions about a broker’s rates, be sure to call in and ask.


Updated on 8/11/2017.




Please share this with your friends





Copyright ©2009-2017 Brokerage-Review.com. All rights are reserved.
Brokerage-Review.com has relationships with other companies. See Terms of Use.