U.S. Bank Investments Review for 2023
U.S. Bancorp brokerage review. U.S. Bank Investments fees, rating, online stock trading
and IRA account minimums, and mutual fund offering.
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U.S. Bancorp Investments Overview
If you’ve been using U.S. Bank for checking and savings accounts, it’s time to consider what it offers
in the realm of securities trading. Through U.S. Bancorp Investments, the company offers both robo and
self-directed accounts.
U.S. Bancorp Investments offers self-directed and investment-advisory accounts through both full-service and online channels. The former cost more but come with a dedicated financial planner.
Online accounts have a reduced lineup of services but cost a lot less. A low-cost account can be opened online in either advisory or self-managed mode. The advisory setup is a robo program. This review will focus on the online, budget program.
Is U.S. Bank Brokerage Safe?
U.S. Bancorp Investments is registered with FINRA and the SEC as both a broker-dealer (for its brokerage accounts) and an investment advisor (for its managed accounts). Its FINRA ID # is 17868, and its SEC ID # is 801-68122.
The company has been registered since 1986. It has 25 disclosures on its FINRA profile, which is a small number for 37 years of business. It is registered in all 50 states plus the District of Columbia and Puerto Rico.
On top of the securities watchdogs, U.S. Bancorp Investments is also a member of SIPC, which provides insurance on both self-directed and investment-advisory accounts up to program limits.
U.S. Bancorp Automated Investor
The first option available to U.S. Bancorp Investments clients is Automated Investor. This is the company’s robo program. It uses a software program to trade ETFs with low expense ratios. There is no human financial planner attached to the account, which is why it has a very low fee. It is just 0.24% per year, which is much lower than what the company’s full-service managed account costs (as much as 2.05%). There is a $1,000 starting balance requirement to enroll in the robo program, which is also lower than a standard advisory account.
There are no commissions charged on ETF trades inside an automated account, so the asset-based fee represents the full cost of the account. Automatic rebalances and tax-loss harvesting are standard services that carry no additional charges.
Examples of ETFs used in the program include:
Vanguard FTSE Developed Markets – VEA
iShares Russell Mid-cap – IWR
SPDR Portfolio Aggregate Bond – SPAB
Cash dividends paid by the ETFs in the Automated Investor account are used to buy more shares of the funds.
There are several tax structures that a robo account can be opened as. Examples include individual and joint taxable, Roth IRA, Traditional IRA, SEP IRA, and Rollover IRA. Only an IRA can add beneficiaries.
U.S. Bank Self-Directed Investing
U.S. Bancorp Investments customers who feel up to the challenge can gain a much larger selection of ETFs than what the robo service offers and have zero account minimum if they opt for self-managed trading. On top of every ETF on the American exchanges, this division of the company also provides other investment vehicles. They include:
- Stocks
- Mutual funds (more than 10,000)
- Option contracts
- Bonds
This time, though, there are commissions. Stock, ETF, and option trades are $4.95 per transaction. Options also have a $1 per-contract fee. Mutual funds with a load are $25 per side.
Right now, U.S. Bancorp Investments is offering 100 free equity trades per year to self-directed clients. To qualify, they must enroll in paperless statements and open a U.S. Bank Smartly Checking account, which can have a monthly fee.
A self-directed account itself has a $50 annual fee, although this can be waived for households with more than $250k in assets.
The same account types found in the robo service are available in the self-directed program.
FDIC-Sweep Program
A self-managed account that has uninvested cash can elect to have the cash position swept into U.S. Bank, where it will be protected by the FDIC. Only one bank is used in this program, which means $250k of insurance is the maximum available. Money already on deposit with other accounts with U.S. Bank will reduce this maximum level of protection. Interest is earned on funds held with U.S. Bank through the sweep program. It is available to full-service clients as well. As already mentioned, a free cash balance in a robo account is used to buy more ETF shares.
Margin
Self-directed accounts with U.S. Bancorp Investments can sign up for margin trading. Currently, rates are very reasonable. The top rate is 9.75%, and the bottom rate is 7.75%.
Digital Tools
U.S. Bancorp Investments customers are able to manage their accounts using the company’s mobile app and website. There are several useful tools available on these platforms, including a goal-setting instrument, a risk quiz, and a widget that analyzes multiple simulated investment scenarios.
Additional Services
Fractional Shares: Only whole shares of stocks and ETFs can be traded inside a self-directed account. Of course, mutual funds can be traded in whole dollars.
DRIP Availability: U.S. Bancorp Investments offers automatic dividend reinvesting for stocks and funds.
Initial Public Offerings: There is no IPO service.
Extended Hours Trading: Only the regular day session is available.
Periodic Mutual Fund Investing: It is possible to set up recurring purchases of mutual funds inside a self-managed account.
U.S. Bank Investments Review Judgement
U.S. Bancorp Investments has a decent, although not great, discount investment service for online traders. Its $50 annual fee for self-directed accounts is not competitive at all, although its 0.24% annual fee for robo accounts is. The company’s FDIC-sweep program only uses one bank, which means additional FDIC protection is not available. Placing trades inside a self-directed account could get expensive. Robo accounts, however, will find a good value here.
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Updated on 3/28/2023.
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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