USAA rating

USAA Brokerage Review


USAA Investments Pricing and Minimum Deposit


InvestmentsCommissions
Stocks and ETFs $8.95
Foreign stocks $70
Stocks and ETFs broker assisted $50
Options $8.95 + $0.75 per contract
Mutual funds $45
All listed corporate bonds $25 + $3 per bond
U.S. treasury securities at auction $45

Investments stocks, options, mutual funds, bonds, ETFs
USAA brokerage minimum deposit to open account $0
FeesUSAA brokerage fees


Overview of USAA


While USAA was founded to serve military families, the broker allows civilians to open brokerage accounts and take advantage of the many financial services the company offers. Some of these are quite good, while others lag behind the competition. In this 2018 review of USAA brokerage services we'll show you which ones you'll want to take advantage of.


Banking Features


USAA Investments Banking Rating

We start with cash management tools, and it's not a brilliant start. Unfortunately, USAA does not allow checks or a debit card to be added to a USAA brokerage account. What you can do is link a USAA bank account to a USAA investment account, and then transfer funds in a core position to the linked deposit account.

USAA offers several checking and savings accounts. Some of these have no monthly fees. The debit card carries a 1% surcharge for foreign purchases, which could affect military personnel who use the card outside the U.S.

As for ATM fees, USAA Bank doesn't impose any surcharges for the first 10 withdrawals in a month. Moreover, USAA also reimburses ATM surcharges, up to $15 per month.

USAA's savings accounts have pretty low rates (0.05% to 0.30% currently), and it takes a $10,000 balance to qualify for the highest rate.

The USAA website has some good cash management tools. Selecting ‘My Tools' in the top menu produces a drop-down menu where you can reorder deposit slips and envelopes, schedule a transfer, find an ATM, or make a wire transfer.


Mutual Funds


USAA Mutual Funds Rating

Next up in USAA Investments Review are mutual funds. USAA does much better here. Using the broker's fund screener, we found 15,214 funds. Some of these were closed to new investors, so the actual total should is 14,311. This is much lower than the 20,000 figure that USAA boasts about on its website.


USAA Mutual Funds Review


Despite the questionable advertising, USAA does offer some good funds. We found securities from American Century, Fidelity, Allianz, and many others. The screener showed us 1,859 products that carried no load and no transaction fee. There were almost 6,000 that had no load.

Despite the sizeable list, there were some weaknesses in the brokerage firm's screener that we didn't like. For example, it's not possible to search by fund family. Also, the screener defaults to only 20 results per page, and this can't be changed.

On the positive side, there are several criteria the screener can search by. Some of the available options include minimum star rating, 12-month yield, average market cap, and minimum initial investment.

It is possible to create different columns by subject matter within a set of results. For instance, we could select ‘Ratings and Risk' or ‘Fees and Management.' Then we were able to sort by specific issues within a category, such as a 3-year Morningstar rating.

USAA manages its own lineup of mutual funds—75 of them to be exact. Surprisingly, most of them come with either a transaction fee or a load.


ETF's


USAA Investments ETF Rating

From mutual to exchange-traded funds, we see a similar, albeit less impressive, picture. USAA has its own ETF's. There are only six of them, however. All of them are commission-free. There is also a selection of Fidelity ETF's that are free to trade. Most of them are sector funds. In total, there are 24 ETF's that can be traded with zero commissions.

One ETF tool we found on the USAA site was a comparison tool. It allows two or three ticker symbols to be entered. The program then returns a vertical list of several characteristics, such as inception date, Sharpe ratio, and Lipper rating. This allows for a quick comparison.


USAA ETFs Review


USAA offers another ETF tool. This one is a Fund Hypothetical Module. You can build a sample portfolio and analyze how it would have done over multiple time frames. Unfortunately, we weren't able to reach the final screen on the tool.

One final ETF tool we really liked was a correlation analyzer. Type in a ticker symbol and the program will tell you which ETF's most closely mimic the performance of your ETF, and which funds have the opposite performance.

The broker's ETF screener delivered a total of 1,614 securities available for trading. It's possible to search by fund family and a host of other criteria. These include net assets, geographic region, sector, volume, and expense ratio.

An ETF's profile page has a well-laid out summary of various pieces of information. These include sector allocation, historical performance, and a small chart.


Customer Support


USAA Investments Customer Rating

The investment arm of USAA is open from 7:30 in the morning until 8:00 in the evening, Central Time. These are weekday hours. On Saturday, a brokerage representative can be reached from 8:00 to 5:00. There are no brokerage hours on Sunday. The company can be reached by mobile phone by dialing #USAA. Outside of North America, USAA offers many phone numbers.

We were disappointed not to find an on-line chat feature on the USAA website. However, there is an AI chatbot that is able to answer some questions. During our testing, sometimes we would have to ask the same question twice to receive an answer.

The self-help section on the USAA site is pretty good. The company's bank routing number is displayed, there's a link to USAA's Twitter page, and helpful information for soldiers deployed overseas is posted.

As for branch locations, USAA does have 4 locations for investment clients. These are located near military installations. One is in Colorado Springs, while another is in Annapolis. USAA cash machines are also located in these centers.


USAA Broker Commissions, Fees, and Account Requirements


USAA Investments Fees Rating

An investment account at USAA requires a $3,000 deposit. Accounts designed only for the trading of mutual funds require just $500. (Many funds, however, have minimum investment levels above this number.) There are no on-going fees for a trading account.

Accounts that have no activity for 12 months and have less than $100 in them will be closed by the broker and assessed a $10 fee.

ETF and stock transactions cost $8.95 for orders under 1,000 shares. After that limit, the broker-dealer starts charging a penny per share. Penny stocks (defined as an equity under $1) have a 1¢ surcharge.

Foreign stocks (not including ADR's) carry a very steep $70 commission. Even worse, U.S. Treasury bonds cost $45 per transaction.

Options are available at USAA and they carry a 75¢ fee on top of the brokerage firm's $8.95 base charge. Exercises and assignments are assessed the $8.95 commission.

The brokerage house has live associates on the phone who can help traders submit stock orders over the phone. The service, however, costs a very steep $50. For derivatives, the price drops to $25.

Mutual funds that don't appear on USAA's list of NTF products carry a $45 transaction charge.


IRAs


USAA Investments IRA Rating

USAA offers a selection of Individual Retirement Accounts that carry the same pricing schedule as a regular trading account does. There is a $35 charge to close an IRA, though.

There are Roth and Traditional IRA's for just about everyone, while SEP and SIMPLE plans are designed for small businesses and self-employed persons. It's possible to roll over an old employer's plan—a 403(b) or 401(k), for example—into a USAA IRA.


USAA IRA Review


USAA's website has a helpful retirement section that presents information in a user-friendly format. There are FAQ's that address retirement issues such as having more than one retirement account and what contribution limits are. There is also information about how to move a Thrift Savings Plan into a USAA IRA.

Some of USAA's mutual funds are target-date funds. These are built with retirement planning in mind. Their holdings become more conservative as the target date approaches, which is when retirement is expected to commence. These funds require a minimum funding level of $500 or a regular deposit schedule of $50 per month. Other fund families with target-date funds at USAA include Vanguard and T. Rowe Price.

We couldn't find any information on solo 401(k)'s at USAA, but the broker-dealer does offer several retirement annuities along with annuity information and calculators.


Investment Advice


USAA Investments Rating

USAA offers a ton of financial advice, extending from investments to insurance, buying a car, renting a home, leaving the military, and managing debt. There are several calculators on the financial conglomerate's website. One can be used to estimate payments on an auto loan; while another generates a financial readiness score that estimates how prepared you are for a financial emergency.

For investments, there is an online investment portfolio planner that takes a variety of inputs, such as net worth and tax filing status, and then recommends an asset allocation in pie chart format.


USAA Investment Review


Besides its online planning resources, USAA also offers account management services. It has both robo and human advisers. The robo package costs 50 basis points per year and requires a $2,000 deposit. The service can be used for regular securities accounts, retirement accounts, or UGMA/UTMA accounts.

If you have greater trust in traditional management, you can select from several human-advised packages. USAA Managed Portfolios costs 1.1% annually. There is a $25,000 minimum account size for the service. While it's more expensive than the broker's AI, mutual funds are on the table with this package.

For customers with deeper pockets (a quarter of a million dollars to be exact) USAA offers a Wealth Management package. With this option, you get a one-on-one affiliation with a financial planner who is capable of trading stocks and bonds. The service costs anywhere between 2.20% and 0.50%. Accounts above $10,000,000 can negotiate better rates. Bond-only portfolios receive discounted fees.


Trading Tools


USAA Investments Trading Tools Rating

The USAA website is where all the action for the company's various financial offerings are managed. When we logged into our test account, we found a dashboard with links to banking and investing accounts. There where convenient icons for funds transfer and bill pay.

In the investment section, we were able to create a watchlist and set up alerts. Unfortunately, the broker-dealer does not have a trade bar on its website. Furthermore, there is no browser-based platform; nor is there any desktop software. So all trading has to take place on basic web pages, and they are pretty simple.


USAA Trading Review


A small chart appears on the front page of an equity's profile. The time scale can be adjusted from one day to five years. There are no other options here. There is a ‘Chart' tab at the top of the page, and here we found a much better graph.

On this page, it's possible to adjust the chart style and add comparisons and a few indicators. The frequency can be set from daily to yearly with a timeframe out to one decade. Chart styles include mountain, logarithmic, candlestick, OHLC, and dot.

On the chart tab, there is also a link to an interactive chart. Neither chart has the ability to expand the width of the monitor. It seems strange that USAA would have this chart option because it's not any better than the standard webpage chart.


Mobile App


USAA Investments App Rating

USAA's mobile app can be used on Apple and Android devices. There are platforms for both tablets and phones. There's also a platform for Apple Watch.

We tried out the app using an iPhone. We liked the wide variety of market information on the platform. We found stock market indexes, yields on U.S. Treasury bonds, plus volatility measurements. There are news articles from a variety of sources, including BusinessWire. We were disappointed to find no video news, however.


USAA Mobile App Review


The day's biggest gainers and losers are shown on the app in green and red. Clicking on one of these stocks produces a stock profile page. Of course, it's also possible to search by ticker symbol or company name.

At the top of the page is trade data, such as volume and bid-ask spread. A small chart is at the bottom, and the timescale can be adjusted from one day to five years. The graph style can be changed, comparisons can be made, and three technical indicators are available. A graph can be rotated horizontally for better viewing.

Option chains are on the platform. There are no multi-leg strategies, though. Clicking on a bid or ask price generates the appropriate trading ticket.

For money management, there is a mobile check deposit feature. We also liked the inclusion of bill pay and a funds transfer tool.


Investment Education and Research


USAA Investments Research Rating

So what tools does USAA provide for security education? The mobile app we were just examining offers free stock reports from Argus and MarketEdge in pdf format. These files can easily be exported, printed, or saved in cloud storage.

The mobile platform also provides limited financials on a stock. Data such as revenue, dividend yield, and P/E ratio can be found. There are also recent upgrades and downgrades from various analysts shown.


USAA Investing Review


On the website, there's more extensive information. A market diary shows a heat map of stocks that are advancing or declining. A forex box shows rates of global currencies. An upgrade/downgrade section is much better than what's on the mobile platform. The specific analyst is shown (such as Merrill Lynch) along with the specific event (such as upgrade) and the specific stock (such as OFC). Searching by date will produce all of the rating changes for that day.

We liked the economic calendar on the site as well. It showed upcoming dividends, stock splits, conference calls, and IPO's.


Comparison


USAA's $8.95 commission is higher than Fidelity and Schwab, both of whom charge just $4.95. Firstrade charges just $2.95.

Most low-cost brokerage firms nowadays provide their customers with desktop platforms, and they do so at no cost. These firms include TD Ameritrade and TradeStation.

Although we liked the fact that USAA has a list of commission-free ETF's, it is smaller than E*Trade's and Vanguard's. Firstrade offers over 700 (!) of these products.

On the positive side, USAA's total mutual fund selection is larger than WellsTrade's and Ally's. Schwab, though, offers more no-load, no-transaction-fee funds.

For investment education, we liked Fidelity better. The broker has many articles and videos that introduce basic investing topics, such as how to trade options. These types of resources are missing on the USAA site.


USAA Investments Review: Pros


  • Excellent mobile app
  • No account maintenance, inactivity or hidden fees
  • Great customer service
  • Good banking services
  • No-fee IRA accounts


USAA Investments Review: Cons


  • Higher than average commissions
  • Additional $0.01 per share is charged for stocks priced under $1
  • Basic trading tools
  • Few educational resources
  • Limited research services


Recommendation


We cannot recommend USAA for active traders due to the broker's lack of advanced trading tools. Because of the firm's $10 closeout fee, we also do not recommend it for small accounts.

We do recommend USAA for mutual fund investors do to the large list of funds and an effective screener. Ally Invest, however, is much cheaper with only $9.95 charge for mutual fund transactions.

As for IRA's, the brokerage house does a decent job, although TD Ameritrade has no closeout fee and offers self-employed 401(k)'s.

Beginners have decent resources at USAA, but a firm like Fidelity or Ally Invest would be a wiser choice because these latter two have 24/7 customer support and better educational resources.


USAA Brokerage Review Summary


As you can see in this 2018 brokerage review, USAA Investments has an overall decent performance; but due to its pricing schedule, it does not seem like a very good value. Where the company really succeeds is in its plethora of financial services that go well beyond investments and include banking, insurance, mortgages, travel discounts, auto loans, and much more.


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USAA Brokerage reviewed by Brokerage-Review.com on . Rating: 3