Brokerage Firms Charging Account Inactivity or Maintenance Fees

Does your discount stock broker charge inactivity fees in 2018? List of annual maintenance and monthly account inactivity fees for TD Ameritrade, Scottrade, Etrade, Fidelity Investments, Ally, Just2trade, Vanguard, Charles Schwab, Wellstrade, Robinhood, Interactive Brokers, Merrill Edge, Firstrade, Capital One, TradeStation, and Sogotrade.

Account Inactivity Fees Charged by Brokerage Firms

Brokerage Inactivity Fee Maintenance Fee
Ally InvestNoNo
TD AmeritradeNoNo
Capital One InvestingNoNo
Charles SchwabNoNo
Choicetrade$20 quarterly (stock plan A); $35 quarterly (stock plan B); $50 quarterly for entity accounts. Waived for either plan if 5 or more trades are performed within the calendar quartersee inactivity fee
FidelityNoSimple IRA: $350 per plan collected annually from the employer; or $25 per participant collected annually from participants' accounts. HSA: $48, waived in some instances. $12 annual Low Balance Fee for each noncore Fidelity mutual fund if balance is under $2,000.
Interactive Brokers$10 per month minimum commission requirement to avoid $10 monthly fee (rises to $20 monthly if account balance is less than $2,000)$7.50 quarterly fee for IRA accounts ($30 per year)
Just2tradeNo$50 annual fee (waived for accounts with over $10,000.00 in assets and at least 40 trades)
Lightspeed TradingMinimum monthly commission for accounts under $5,000 is $25$30 annual IRA fee
Merrill EdgeNoNo
Motif InvestingNoNo
SogotradeNo$35 annual IRA fee
TradeStation$50 annual fee if client makes less than 5 trades and average account balance is less than $2,000.No
VanguardNo$20 annual maintenance fee for regular accounts with balance less than $50,000. Annual IRA fees: $25 for SIMPLE IRA, $15 for 403(b)(7), $20 for Individual 401(k)/Roth 401(k) plans, $20 for 529 plan
WellstradeNo$25 Minimum Balance Fee, if account is less than $5,000; $30 monthly service fee if PMA Package has less than $50,000 in all accounts

Brokerage Maintenance Fees

In 2018 a majority of discount online brokers did not charge account maintenance fees for regular brokerage, non-IRA accounts. However, IRA accounts (Traditional, ROTH, Simple IRA, SEP IRA, 401(K) and others) are a different story: as you see from the table above many companies impose maintenance fees (also called annual or custodial fees). These charges could really add up over the years - you are not only loosing the total amount of the fees but also all the interest or investment gain that might have accumulated on that money over many years.

The worst companies in regard of maintenance and inactivity fees are Interactive Brokers and Lightspeed Trading. They cater mostly to very active traders (day-traders) for whom these fees just don't matter. On the other hand, the majority of long-term, buy-and-hold investors do care about the fees. As you see, the firms that fiercely compete over this large group of customers, such as TD Ameritrade, Etrade, Scottrade, Charles Schwab, USAA brokerage and others, do not charge account fees.

Does Your Broker Charge Inactivity Fees?

Some online brokers charge account inactivity fees: the fee is imposed when a customer does not make a specified amount of trades during a month (Interactive Brokers), a quarter (LightSpeed Trading) or a year.

There are also companies that impose special fees that could destroy a small account investor - Low Balance Fees. These fees could be charged if a client has account balance lower than required by a brokerage house (Interactive Brokers, Just2trade), or it could be charged if the amount invested in a mutual fund is too small (Fidelity Investments, Vanguard). Most companies do not charge Low Balance Fees.

Brokerage Promotions

Many companies mentioned in this article offer incentives for new clients to open an account. Some of these promotions work only for non-IRA accounts, others - for both IRA and non-IRA accounts. It is definitely worth to check these out.

TD Ameritrade: Trade free for 60 days + get up to $600.

Ally Invest: Up to $3,500 cash bonus + commission free trades for new accounts.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.

Fidelity Investments: Get 500 free trades with $100,000+ deposit.

Firstrade: Up to $300 Cash Rewards + 500 Free Trades.

Merrill Edge: Get up to $600 when you open new Merrill Edge account with at least $20,000.

E*trade: At E*TRADE, get $6.95 trades + 65₵ per options contract.

Motif Investing: None

USAA: None

Interactive Brokers: Open account and get $200 for a friend you refer.

Wellstrade: None

Discount Broker Account Fees

For the most part, fees for account set up, maintenance, inactivity, or IRA annual custodial fees aren't an issue. The majority of brokers don't charge for those services. Of those who do, many will waive the fee if certain minimums are met such as account balance or the number of trades per quarter or year.

Account maintenance and inactivity fees range from $0 to $360 (Interactive Brokers). The median fee of those greater than zero is $30. All the companies that charge this fee will waive it under certain conditions. Investors with Interactive Brokers accounts must be sure to understand how to avoid the $360 fee because if that gets overlooked, any savings on trades during a year could be wiped out in an instant.

Only six brokers charge IRA custodial fees. Those range from $30 to $75, with the median fee being $35. The only company willing to waive the fee in certain cases is Muriel Siebert.

Basic instruments

Being financially active and literate person, you've decided to become an investor. Regardless of which type of investor you are, there is plenty of information to help you succeed in investing or trading.

At the beginning, investor has to determine the range of his preferences in the financial market. There are plenty different instruments to achieve brilliant outcome or goof. Let’s look at the main instruments, get acquainted with trader’s vocabulary and look at the selection criteria for choosing a brokerage firm not to get lost among various assets and choose really deserving.

Shares/stocks/equities of various companies. Capital stock represents the size of the equity position of a firm and can be found on the balance sheet (or notes) of a typical financial statement. Stocks strengthen the rights of its owner to get partly profits of the company in the form of dividends, to participate in the management of the company and on the part of assets remaining after liquidation. Other words, when you buy some stocks, you buy a part of the whole company. Shares can be ordinary or preferential, usually investors deal with ordinary shares.

Options and futures. Both instruments are derivatives; its price is formed on the basis of one or more underlying assets. The derivatives are just a contract between two or more parties. Derivative’s value is determined by fluctuations in the underlying asset. The main underlying assets are stocks, bonds, currencies, commodities, and market indexes. Usually derivatives differ by high leverage.

Mutual funds. Mutual fund is the basket of stocks and/or bonds in which numerous investors place their money. As a result investors receive fund’s stocks reflecting total value of set of fund’s assets. Mutual funds are traditional recourse for long-term accumulation and savings. They have some advantages over other assets: - diversification: the main idea of existence of mutual funds is risks’ reduction through the presence of various assets in portfolio. Portfolio is sufficiently diversified if there are at least 30 different assets. It’s quite expensive for individual investor to secure such miscellaneous portfolio independently; - liquidity: investor can convert mutual fund’s stocks in cash at any time when the market is open; clarity: buying and selling of mutual funds’ stocks are as simple as usual equity. Despite of all pros, mutual funds are rather a way to preserve than earnings.

ETFs. Exchange-traded funds have become an optimum instrument for investments which combine the best features of shares and mutual funds. Like stocks, ETFs trade on an exchange, can be bought and sold when market is open. Like mutual funds, ETFs are set of securities. Investors face with many types of ETFs that dynamic tends to follow variation of numerous asset classes, different indexes, markets such as fixed-income securities, commodities, currencies, real estate, and equities traded in emerging or developed markets. Furthermore there are a lot of ETFs which are traded with leverage and funds with the back returns.

Updated on 1/16/2018.