Navy Federal Investment Services Takeaways
• Members of Navy Federal Credit Union can open securities accounts with the company’s investment division.
• Brokerage and advisory services are both available at the investment unit.
• A small selection of tradable products is available at Navy Federal Investment Services.
Overview of Navy Federal Investment Services
Besides its credit union, Navy Federal has a very extensive investment department that offers trading in securities and more. However, as a credit union, the company does have some restrictive membership policies, so not everyone is eligible. For the folks who do qualify, here’s the rundown:
Investing
Navy Federal Credit Union is more than a credit union. The financial conglomerate also operates Navy Federal Investment Services where securities trading is offered. In this subsidiary, brokerage and investment-advisory accounts can be opened.
In Navy Federal’s self-directed brokerage accounts, clients can trade stocks and exchange-traded funds. Unfortunately, that’s the limit of the company’s self-directed investing service. There are tutorials and other educational resources on the company’s website to help absolute beginners succeed at this, however. And Navy Federal has created themed baskets of securities that its customers can choose from if they think they need a little guidance.
For customers who need even more help, there is the company’s
full-service investment program. Here, brokerage and managed accounts with an actual investment advisor will be found. The firm’s advisory program starts with a simple robo service that trades a small selection of ETFs with low expense ratios. Automatic rebalancing by the digital advisor is standard fare.
Full-service accounts with actual human advisors are also available. Here, a larger range of securities is on tap. Besides stocks and ETFs, we’re talking mutual funds, bonds, options, and annuities.
A moderate amount of tax structures is available at Navy Federal Investment Services. Besides joint and individual taxable accounts, there are two IRAs (Roth and Traditional). A Beneficiary IRA is unavailable, although Navy Federal Investments does offer the custodial account.
Financial Planning
Navy Federal’s full-service investing program comes with financial planning. This add-on is provided by the account’s investment advisor representative who is capable of helping his clients with all sorts of useful services. Here are a few examples:
- Financial planning
- Insurance products
- Education planning
- Customized investment solutions
- Estate planning
- Trust creation
- Inheritance
- Business management
- Marriage planning
- And more...
The biggest downside we see in this category is the lack of branch locations. In the state of Oklahoma, for example, Navy Federal does not have a single location. There is one advisor who can meet with Oklahoma-based clients virtually. In other parts of the U.S., there are roughly 150 offices in total.
Cash Management
Because Navy Federal is a credit union, it goes without saying that customers get lots of cash-management features. There are checking and savings accounts, both of which can attach a debit card. Other useful products include CDs, credit cards, savings-based IRAs, loans for cars and homes, and a lot more. Deposits are protected by the NCUA (The National Credit Union Administration) rather than the FDIC.
NFCU Investments Fees
A robo or self-directed brokerage account at Navy Federal comes with a $3.50 monthly fee. Some members can get a $1 discount. The automated program charges nothing extra. Brokerage accounts have free commissions up to 2,000 shares per month. There is a penny-per-share commission after that. Neither program, automated or brokerage, has an account minimum.
Full-service accounts are a different story. Advisory accounts require $50,000 or more to open. Brokerage accounts have no account minimums but aren’t commission-free. Expect to pay $59 for a stock trade and $40 for an options trade. Advisory fees range from 1.59% to 0.75% of account value, depending on the investment strategy selected.
Financial planning comes with a free consultation. Actual plans have fees that vary based on the complexity of the situation planned.
Margin
Margin trading is available at Navy Federal. The cost is based on a tiered schedule that starts at 13.625%
and ends at 10.625% (for debit balances above $50,000).
Best Brokers
Software
Navy Federal clients can manage all their financial accounts on the company’s website or mobile app. Each software program is designed to be user-friendly. Due to the company’s emphasis on the credit union, there are tons of cash-management tools. Zelle transfers, card freezes, and mobile check deposit are among them. The major downside for securities investors is that there is no advanced trading software, such as a desktop platform.
Bonus Services
Automatic Mutual Fund Purchases: Clients of Navy Federal Investments can set up recurring purchases of mutual funds.
Initial Public Offerings: Missing in action.
Fully-Paid Securities Lending Program: Same story.
Individual Retirement Accounts: Roth and traditional IRAs can be opened (with annual and termination fees).
Extended-hours Trading: Not available.
Dividend Reinvestment Plan: Dividends from stocks and ETFs can be reinvested automatically as additional shares in a brokerage account at Navy Federal.
Fractional Shares: Self-directed brokerage accounts can place trades in whole dollars (starting at $1).
Recommendations
Retirement Saving & Long-Term Investing: An IRA with a financial advisor at Navy Federal would be
a decent decision. Charles Schwab,
however, offers much more for long-term investors.
Small Accounts: Due to Navy Federal’s account minimums and recurring fees, it is not a good choice for small investors.
Beginners: A robo or full-service managed account is a good idea here.
Frequent Stock Trading: Not surprisingly, Navy Federal Investments does not specialize in short-term trading. Better trading tools will be found at Interactive Brokers and Webull.
Mutual Funds: Although full-service customers do have access to mutual funds at Navy Federal Investment
Services, brokerage accounts are subject to a $59 transaction fee. We suggest
Firstrade, who charges no such commissions.
Navy Federal Investments Review Verdict
Navy Federal has a decent investment program that will work for existing customers. Investing resources, however, tend to underwhelm compared to the company’s very famous credit union.
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can
find a Financial Advisor on the Wiser Advisor
(or read
Wiser Advisor review).
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Updated on 10/4/2024.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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