Firstrade IRA Account Review
Firstrade is a smaller brokerage, but it offers many services to investors. Here’s what you need to know about this broker:
Highlights
Competitive commission structure. Firstrade has a commission schedule that beats many of the larger firms.
New cash management features. Firstrade has updated its policies, allowing more account holders to get a debit card.
International accounts available. Residents of many countries can open a Firstrade account, something most brokers don’t offer.
Drawbacks
Reduced customer service. The new $0 commission schedule has come at the cost of scaled-back customer support.
Limited trading tools. Firstrade’s trading tools are not as advanced as those of other brokers.
Limited educational resources. The educational content is brief, with few videos available.
Cash Management Tools
Firstrade offers checkwriting and a debit card for its brokerage accounts with no extra fees. However, the broker requires $100 in assets to qualify for these services. The first order of checks and the debit card can be shipped overnight to most locations at no cost.
A downside is that Firstrade does not reimburse ATM fees, and it does not operate its own ATMs. Foreign currency transactions incur an additional 3% fee. UMB Bank provides Firstrade’s debit card and checks, the same bank used by Fidelity.
Tradable Assets
Firstrade offers a variety of investment options, including mutual funds, ETFs, closed-end funds, bonds, stocks, and options. Over-the-counter securities and penny stocks trading above $0.10 are also available.
However, Firstrade does not offer precious metals, warrants, forex, futures contracts, options on futures, or cryptocurrencies.
Commission Schedule
Firstrade was one of the first brokers to offer a zero-commission schedule. Trading stocks, ETFs, mutual funds, closed-end funds, and options costs nothing. There are no per-contract charges on options, and exercises and assignments are also free. Firstrade is one of the few brokers to offer such generous terms for options trading.
The only products that still carry commissions are bonds. Primary market certificates of deposit cost $30 per transaction, while other fixed-income securities are priced on a markup/markdown basis.
If you place a trade over the phone with a live agent, Firstrade charges $19.95 for stock, ETF, and option orders, plus a $0.50 per-contract fee for options.
Although mutual funds are commission-free, there is a $19.95 fee for redeeming shares held for less than 90 days.
Firstrade’s margin rates range from 8.75% to 13%.
Promo Link
Open Firstrade Account
Customer Support
Firstrade offers 24/7 chat support with an AI assistant named Sammi. While Sammi can answer many questions, it doesn’t cover everything. For instance, it couldn’t provide the stock price for General Motors during a test chat. Firstrade no longer offers human chat support after moving to its zero-commission model.
Phone support is available during weekdays, with toll-free and international numbers. There’s also a free call-back service if the lines are busy.
You can contact Firstrade by fax, mail, or email. The company has one office in Flushing, New York, where it holds office hours.
Firstrade’s website has a document upload tool for customers who need to send forms electronically, and a document download center with various forms available.
Mutual Funds
Firstrade offers over 11,000 mutual funds, and none of them carry transaction fees. However, 8,127 of these funds have a load. The mutual fund screener provides a moderate range of search variables, such as fund family, Morningstar rating, portfolio turnover, and 5-year return history.
Firstrade’s fund profiles are powered by Morningstar, offering a wealth of information. Fund documents, such as the prospectus and annual report, are linked on the profile page. You can also add funds to a watch list, and trade buttons are conveniently displayed at the top.
Exchange-Traded Funds
Firstrade’s ETF screener offers more search variables than its mutual fund screener. You can filter results by sector, regional exposure, price/book ratio, number of holdings, and analyst ratings.
Sorting through ETF search results is straightforward, with sorting options for any variable. However, there’s no trade button in the results; you’ll need to click on a ticker symbol to access the profile page, which also pulls data from Morningstar.
The profile page includes an asset allocation pie chart, a history of monthly premium or discount trading from NAV, sustainability ratings, and top holdings. You can access option chains for any ETF that has them by clicking on an options link at the top of the page.
Mobile Trading
Firstrade’s mobile app offers good charting tools, allowing you to rotate a graph horizontally for better viewing. The app supports multiple graph styles (OHLC bars, candlesticks, hollow candles, Heikin Ashi, line, area, and baseline), and many other features can be customized.
You can log into the app using Touch ID on an iPhone. However, during testing, we found that the app lacks mobile check deposit, bill pay, and streaming financial news. It does have an ACH transfer tool and a trade ticket. Options can be traded, but not mutual funds.
Website Trading
On Firstrade’s website, mutual fund trading is available. There’s a search bar in the top menu where you can enter a ticker symbol, company name, or fund name. Buy and sell buttons appear on a mutual fund’s profile, and clicking on one generates a new page with an order ticket. There are two reinvestment options: reinvest both capital gains and dividends or pay both in cash.
A trade bar sits at the bottom of the browser, allowing you to trade stocks, ETFs, closed-end funds, and options. The bar displays up-to-the-second trade data, including bid and ask numbers, last trade price, and volume. Option chains can be expanded above the bar. Although there are multi-leg strategies, they require a trade to be placed on a web page instead of the trade bar.
For stock and ETF trading, the trade ticket offers stop, stop limit, and trailing orders. Duration options include day, good for 90 days, extended hours only, and extended hours plus regular session.
Firstrade does not have a browser platform.
Account Types
Firstrade offers individual and joint taxable accounts in both cash and margin varieties for self-directed investors. For retirement saving, the broker provides Roth, Traditional, and Rollover IRAs. There are also UTMA and UGMA accounts for minors and Coverdell Education Savings Accounts for education savings.
Trusts and estates have their own account options, as do businesses and investment clubs.
None of Firstrade’s accounts have any fees—no opening, closing, annual, low-balance, inactivity, or maintenance charges.
Firstrade does not offer a solo 401(k) plan or a 529 account.
Global Investing
Firstrade is one of the few U.S.-based brokers that allows residents of many foreign countries to open accounts. However, Cuba and North Korea are exceptions.
Firstrade’s weakness here is that it doesn’t offer trading in foreign securities, except for ADRs and OTC stocks traded in the U.S. market. Firstrade does provide Chinese language support, and its website is available in two versions of Chinese.
Learning Materials
Firstrade offers a limited selection of educational materials. These can be found under the “Education” tab in the top menu. The resources include articles on the basics of stocks, options, mutual funds, and bonds. The options section includes several calculators and e-books, courtesy of the Options Industry Council. There are also videos covering various topics, such as placing a trailing stop order.
Another useful tool is the glossary, which defines many investing terms, making it a great resource for beginners.
Firstrade’s stock profiles are sourced from Morningstar, providing detailed research, including analyst price targets.
Other Services
Firstrade allows customers to reinvest dividends for free. You can also sign up for automatic purchases of mutual fund shares at no extra cost.
Comparison
Robinhood also doesn’t charge any per-contract, exercise, or assignment fees for options, but Firstrade has better options tools.
TD Ameritrade offers $0 equity commissions but still charges fees for mutual funds, OTC stocks, and options.
TradeStation has a desktop platform and offers access to several foreign exchanges, but it charges fees and is less user-friendly.
Recommendations
Small Accounts: Firstrade is ideal for traders with fewer assets because its accounts have no fees or minimums.
Individual Retirement Accounts: Firstrade is an excellent choice for IRAs.
Beginners: New traders need strong customer support, comprehensive learning materials, and user-friendly software. Charles Schwab might be a better option for beginners.
Mutual Fund Investors: Firstrade’s no-transaction-fee policy on all funds is hard to beat.
Active ETF and Stock Trading: Firstrade’s trade bar is helpful, but more advanced traders may prefer Webull.
Firstrade IRA Review Summary
Firstrade offers excellent value, especially for options traders and international customers. However, traders who need advanced tools like desktop software or forex trading will need to look elsewhere.
Open Firstrade Account
Open Firstrade Account
Updated on 7/19/2024.
|