One of the early online investment brokerage platforms, Firstrade offers first rate service. They provide all of the resources that you need as a do-it-yourself investor. That includes tools, calculators, and educational videos and articles, that will help you to be a better investor.
The platform also offers an aggressive fee structure, that while not the lowest in the industry, is well below many of the more popular brokerage services.
Make sure to check out our other reviews before you make your decision on who is the best for your needs:
Firstrade was started in 1985, as First Flushing Securities, mainly serving the needs of the local investment community. Along the way, the company grew through organic growth, but recognized the benefits from tapping the capabilities of the Internet. The company finally launched Firstrade.com in 1997, at a time when there were only a few online stockbrokers available on the web.
It is now one of the leading discount online brokerage platforms, and offers a full line of investment products and tools to help investors take control over financial futures. The platform combines proprietary trading technology with an intuitive user interface and high-level customer service and mobility applications. They offer extended hours trading, as well as a one-second trade execution guarantee.
The platform offers trading in stocks, options, and more than 11,000 mutual funds, as well as exchange traded funds, bonds, US Treasury securities, agency bonds, and certificates of deposit.
The platform has been recognized by Barron’s, SmartMoney, Kiplinger’s and Forbes for outstanding service.
Firstrade Features and Benefits
Minimum initial deposit/account balance. Firstrade has no minimum initial deposit or account balance requirement, except that there are cleared funds in your account before you execute your first trade.
The one exception is margin accounts, where you are required to have a minimum equity of $2,000 in the account.
Available Investments. You can invest in stocks, ETFs, bonds, certificates of deposit, other fixed-income investments, mutual funds, and options.
Available account types. You can open regular investment brokerage accounts (both individual and joint), as well as various types of IRA retirement accounts. They also offer custodial accounts, investment club accounts and ESA education planning accounts, including Coverdell accounts.
IRA accounts include traditional and Roth IRAs, 401(k) rollover accounts, and SEP and SIMPLE IRAs. Firstrade also allows you to open up profit-sharing plans and money purchase plans.
Accounts are also available for certain businesses, including corporations and LLCs, partnerships and LLP’s, and sole proprietorships. You can also open an account for a trust, estate, or conservatorship.
Eligible account holders. Firstrade accepts US residents but also permits international accounts. However, with international accounts, availability is limited to certain countries. US citizens living permanently abroad must make application for domestic accounts.
Extended hours trading. You can trade through your Firstrade account in premarket trading from 8:05 AM to 9:25 AM, and in aftermarket trading, from 4:05 PM to 5:25 PM. Only limit orders are allowed in extended-hours trading.
Mobile App. Firstrade’s mobile app is available for both Android and iPhone. The app allows touch ID for iOS devices, equity ratings and fundamental data, advanced charts, portfolio dashboard, enhanced order status view, and improved trading and research interfaces.
Transferring funds. Both deposits and withdrawals can be accomplished through ACH funds transfer, which is the electronic transfer of funds between financial accounts. You must execute an electronic funds transfer (ACH) agreement, and then attach a copy of either a voided check or the most recent bank statement from the external account. Once you have established the link, you will be able to transfer funds between your Firstrade account and the linked external financial institution.
You can deposit up to $100,000 into your account over seven calendar days, using an ACH transfer. You can withdraw up to $50,000 over seven calendar days using ACH.
Dividend Reinvestment Plan (DRIPs). You can sign up for the DRIP program, and any eligible stocks that you buy are automatically enrolled for dividend reinvestment. The stocks must be priced above $4 per share and includes only select foreign securities. You can enroll or un-enroll in the DRIP plan at any time you like.
Tax Center. This is something of a library, in which Firstrade provides information, articles and charts that give investors the information that they need in regard to the tax consequences of their investments. For example, there is a page that enables you to get whatever tax forms that you need. There are also articles to explain topics such as capital gains and losses, cost basis, wash sales and short sales.
The Tax Center also provides valuable information, such as income tax brackets, and a discussion of the merits of taking a tax loss. That’s a discussion that doesn’t come up often, but every investor will face that decision at some point.
Asset protection. Your account is protected by SIPC, which will cover your account for up to $500,000 in cash and securities, including up to $250,000 in cash. Firstrade’s clearing firm, Apex Clearing Corporation, also provides “excess SIPC” coverage of up to $37.5 million per depositor for securities, and up to $900,000 for cash. Both types of coverage are to protect your account from broker failure, and not from declines in value due to market factors.
Account security. Firstrade maintains physical, electronic, and procedural safeguards that comply with federal standards to guard personal information. Personal account information is placed on the secure portion of the website, where industrial-strength firewalls and encryption technology are used to protect the information. The servers have been enabled with secure sockets layer (SSL) technology to prevent unauthorized parties from accessing the information. They also use digital certificate services to encrypt the information exchanged between customers and the platform.
Firstrade also offers the Firstrade Online Protection Guarantee. If unauthorized activity is conducted online in your Firstrade account, Firstrade will cover 100% of any losses due to that activity. (There are terms and conditions attached to this guarantee.)
Firstrade Tools and Calculators
Firstrade has dozens of tools and calculators available on the website. Some of the more noteworthy ones include:
Video Commentary. You get daily, weekly, and quarterly video discussions on a specific topic, asset class or security from trusted independent analysts. This includes Morningstar Minute, Morningstar DividendInvestor, and Morningstar ETFInvestor.
Analyst Reports & Ratings. This gives you access to Morningstar 5-star ratings and comprehensive research reports.
Advanced Screener. This tool enables you to narrow down your investment choices using predefined screeners. For example, you can screen for high-yielding quality stocks, large-cap growth stocks, or bargain-basement small caps. You can choose from dozens of criteria, to meet your own requirements.
Financial calculators. These are online calculators that enable you to crunch numbers for a large number of financial concerns, including:
- Current net worth
- How much you should be saving for college
- How much you can contribute to an IRA
- How much retirement income an IRA will provide
- Should you convert to a Roth IRA
- The value of your qualified plans at retirement
- How much you will need to save for retirement
- Calculating if your current retirement savings are sufficient
- Becoming a millionaire
- How to allocate assets
- Calculating the return on a real estate investment
- Calculating the value of a call or put option
Investment Glossary. This provides definitions of a comprehensive listing of virtually every investing term that was ever invented. This will be of real value to new and intermediate investors, but it might even be a benefit to more experienced investors. After all, every now and again come we all come across a term or concept that we’ve never heard of before.
Educational Videos. This is a library of instructional videos that will help you with basic investing procedures. For example, there are videos available that will show you how to place option trades, create trailing stop orders, understand margin trading, and learn the intricacies of exchange-traded funds.
Upcoming IPO announcements. Firstrade has a dedicated page that lists upcoming initial public offerings on a monthly basis. This will give you an opportunity to be aware of these opportunities, so that you can do your research, and invest in these new issues when they become available.
Firstrade performs many services as an investment brokerage, but here are the most commonly charged fees associated with the service:
Stocks. Firstrade has a commission fee of $6.95 per online trade, with unlimited shares. This puts them slightly above companies like Ally Invest, but right at the same price as other brokerages like TD Ameritrade.
Options. The commission fee for online trades is $6.95, plus $0.75 per contract, again with no minimum.
Mutual funds. No Transaction Fee mutual funds can be traded commission-free. This is also true of load funds. On no-load funds, the commission is $9.95 per trade.
Fixed income investments. Firstrade charges $30 to trade a primary market certificate of deposit. However, on virtually every other type of fixed-income investment, trades are executed on a net yield basis, and do not include a dedicated commission fee. This includes trades involving U.S. Treasury bills, notes and bonds, municipal bonds, agency bonds, zeros and strips, and secondary market CDs.
Broker-assisted orders. If you use a Firstrade representative to complete a transaction, there is a charge of $19.95 per trade, except on mutual funds that have load fees. Options are also $19.95, plus $0.75 per contract.
Margin interest rates. Firstrade chart has a sliding scale for margin interest rates, the higher your account balance the lower the interest rate. At the low end, the margin interest rate is 4.50% on account balances of at least $1 million. The high rate is currently 7.75% on accounts balances of less than $10,000.
Other brokerage fees. This includes non-commission-related charges, including:
- Paper trade confirmations, $2 per confirmation
- Paper account statements, $5 per statement
- Margin call notice, $25
- IRA termination fee, $50
- Wire out funds – domestic, $30; international, $50
- ACAT (outgoing transfers, full), $75
- ACAT (outgoing transfers, partial), $50
- Account verification fee, $15
- Dormant processing fee, $100
- Stock certificate fee, $300-$600
Firstrade is a solid trading platform that has just about everything that you need. The only exceptions we came across are the following two:
Limited interest on cash balances. In order to earn interest on your cash balance, you must maintain a minimum of $25,000 in your account. Not to worry if you have less – the interest rate on cash balances is just 0.01%, so you aren’t missing out on much (for example, if you have an account cash balance of $10,000, you will earn just $10 in interest IF you keep the money in the account for an entire year!).
No investment management available. If you prefer to use professional services for your investment portfolio, rather than going the do-it-yourself route, Firstrade does not offer this service, as some of the other major investment brokerage firms do.
Will Firstrade Work for You?
Firstrade is anxious to get your business. They are currently running several promotions if you open an account with them:
- Triple 100 Promotion – If you open a new account you receive 1) 100 free trades, 2) up to $100 in transfer rebates, and 3) $100 cash back. You must deposit at least $100,000 in order to get all three promotions.
- Refer a Friend – Firstrade will pay you $50 for each person that you refer to the platform. The friend must open up an account and deposit at least $5,000 within the first 30 days, and execute at least one stock or options trade within that time.
- Wire Transfer – You will receive a rebate of $25 if you wire funds into your account from another financial institution, consisting of at least $25,000.
- Switch to Firstrade, Get up to $100 – Firstrade will rebate your account transfer fee charged by another broker for up to $100. You must open up a qualifying account online, and transfer a minimum of $10,000 within 30 days. You’ll also be required to maintain at least $10,000 in the account for at least 12 months.
- 12 Free ETFs – You can trade commission-free on 12 of Firstrade’s most popularly traded ETF’s. Firstrade has a list of the 12 eligible funds, and they cover a small, mid-cap and commodity funds, as well as emerging markets and short-term and long-term bonds. You must purchase at least 10 shares in each fund, and hold each fund for a minimum of 30 days.
Firstrade is an excellent choice for a do-it-yourself investor, who simply wants the tools and information available to be an efficient and profitable investor. The site offers an excellent balance between price and service, and can be a good platform for either a buy-and-hold investor or an active trader.
It may not be the best platform for a new investor, since it lacks professional investment management alternatives. Although it does provide the tools and resources in order for a new investor to gain greater knowledge and more experience, and to do so with very reasonable fees. And the fact that there is no minimum initial account deposit requirement doesn’t hurt new investors either.
Whether you are a new or experienced investor Firstrade is worth a close look.