Best Brokerage for Small Investor: Commissions
| Investments | Commissions |
|---|
| Stocks and ETFs | $0 |
| Options | $0 |
| Mutual funds | $0 |
| Crypto | markup of 100 basis points on both sides |
| Treasury Bills, Notes, Municipal and Agency Bonds, Zeros & Strips | net yield basis |
| CDs | $30 for primary market CDs, net yield basis for secondary market CDs |
| Investments | stocks, options, mutual funds, bonds, CDs, cryptos, ETFs |
| Firstrade minimum deposit to open account | $0 |
| Fees | Firstrade fees |
- FREE stocks, mutual funds, options, and ETFs commissions
- $0 minimum to open an account
- 11,000 mutual funds to choose from
- No account maintenance or inactivity fees
- No annual or setup fees for IRA accounts
- Free dividend reinvestment plan (DRIP)
- Easy to use, clean website
Review
Firstrade is one of the top brokerage houses in the United States, and the best discount online brokerage firm for small investors
(small account balance) since there are no minimum deposit requirements, no hidden fees, and no penalties for having low balance, or not making any
trades. Prospective customers can open a brokerage account with $0 down.
The firm also offers low cost pricing: $0 per stock or ETF trade.
With Firstrade customers could invest in 10,000+ mutual funds. More than 1,600 have no load. Mutual funds at Firstrade have the lowest transaction fee among all
online brokers - $0 on both the buy and sell sides.
It's extremely important to get the best pricing for investors with small account balances, since high commissions will take a huge bite out of their account.
For example, let's say account balance is $1,000 and an investor decides to buy a mutual fund. Since the cost of a transaction is $49.95 at Charles Schwab, it means
that investors will spend 5% of their portfolio just on that one transaction! It's a huge expense! Compare it to $0 per mutual fund transaction at
Firstrade, or 0% of the account balance.
Another thing worth mentioning is that 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. Small investor will not be making a lot of trades,
because active trading would just eat away their money. Firstrade doesn't charge inactivity fees.
There are also companies that impose special fees that could destroy a small account investor - Low Balance Fees. These fees are charged if a client has an account
balance lower than required by a brokerage house (Interactive Brokers), or it could be charged if the amount invested in a mutual fund is too low (Fidelity
Investments, Vanguard). Firstrade does not charge any of the above-mentioned fees.
Because there are no setup, termination, or maintenance fees for all individual retirement accounts, Firstrade is also a great option for an IRA account
(traditional, ROTH, SEP, or SIMPLE IRA).
Read detailed Firstrade review.
Open Firstrade Account
Open Firstrade Account
Alternative Broker for Small Investors
For small investors who are looking to open an account at one of the largest brokerage houses in the United States, TD Ameritrade is an excellent
alternative to Firstrade. It is one of the big 5 brokerage houses, and it has been in
business for over 35 years. Offering the best tools in the industry with record breaking execution time and some of the lowest fees available, the
benefits of TD Ameritrade far outweigh any possible drawbacks making the company one of the best brokers for small investors.
TD Ameritrade's website is well-designed with intuitive menus, and users can easily find all the resources they need. One particularly
useful feature is the ability to enter trades anywhere on the website through the order-entering box that is located on the bottom of every page.
Trading through this site is, in short, efficient and comprehensive.
TD Ameritrade is one of the few on-line discount brokers to offer an advanced desktop trading platform completely free of charge or requirements for all its clients.
Amazingly, the software also comes with some very powerful charting tools.
TD Ameritrade allows customers to invest in thousands of mutual funds and all ETFs without paying any commission. The firm requires no minimum deposit
to open and maintain both IRA and non-IRA accounts. There are no account inactivity or low balance fees. Their new client promotion offer allows investors
to build a diversified portfolio without spending a dime on broker commissions. All this makes the firm one of the best brokers for
small investors in 2023.
More information is in detailed TD Ameritrade review.
Open TD Ameritrade Account
Open TD Ameritrade Account
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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