Firstrade.com has announced free online trades on stocks, exchange-traded funds (ETFs), options and mutual funds. All of them. As a more traditional online broker, Firstrade includes access to all stocks, ETFs, options and mutual funds currently available in the U.S. There are no limits on the number of trades allowed, no minimum holding periods, and no minimum account requirements.
Pricing comparison. Here’s their updated pricing chart, including a side-by-side comparison with TD Ameritrade, Fidelity, E*Trade, and Schwab. Note that each competitor does offer their own selected list of commission-free ETFs.
Customer service. Since they are offering free trades, you might be worried that it would be hard to get assistance. They actually offer a lot of help options including live chat and free call-back phone service:
Are they legit? Yes, Firstrade Securities has been around since 1985, and I actually have an idle account with them from an old promotion. They have been a competitive discount online broker for a while, with their only physical branch in Flushing, New York. They are unique in that they offer special service to Chinese-speaking customers by providing a Chinese language version of their site (Simplified and Traditional) and also Chinese-speaking customer service reps (Mandarin and Cantonese). But other than a few Chinese character links on their site, you wouldn’t otherwise notice.
iOS and Android apps. Both iPhone and Android apps are available. Touch ID/Face ID supported on iOS. In May 2019, they released a redesigned 3.0 version of their iOS app, which now looks more like the other app-first brokerages. Screenshot:
Up to $200 rebate of transfer fees if you switch. They will rebate up to $200 in transfer fees if you move your assets over to them from another broker. Here’s the fine print:
Firstrade will rebate the account transfer fee (ACATS only) up to $200 charged by another brokerage firm when completing a Full Account Transfer for $2500 or more (excluding mutual funds & fixed income products). The rebate will be based solely on the actual transfer fee charged by the firm you are transferring from. To receive transfer rebate, please submit (upload, fax or email) a copy of your most recent statement from your previous broker with evidence of transfer charge. Submissions must be received within 60 days of transfer date. Credit will be deposited to your account within 30 days of receipt of evidence of charge. This offer applies to Firstrade regular investment accounts and IRAs (Traditional IRA, Roth IRA, and Rollover IRA), excluding Partnership, Corporate, Investment Club, ESA Education Planning Account, and Custodial Accounts. The account must remain open for 12 months with the minimum funding or assets required for participating in the offer — if your account assets fall below $2,500 due to withdrawals or outgoing transfers, Firstrade may reverse the transfer rebate at the time of withdrawal. Offer valid from 09/19/2017 to 08/31/2018.
Firstrade is kind of stuck in the middle between the huge mega-brokers and slick startups, so this is a big move for them to get some attention. The big financial names – Fidelity, Schwab, Vanguard all have some commission-free ETFs but not all stock trades. Robinhood and WeBull are new start-ups that have free stock/ETF trades, but not free mutual fund trades.
Bottom line. Firstrade is a discount broker with real human customer service that is moving to the new world of app-centric trading, offering free online trades on all stocks, exchange-traded funds (ETFs), options and mutual funds. No minimum account requirements.
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So what’s the catch?
I don’t know their plans, but all discount brokers plan on making money from margin account interest and also interest from your idle cash balances. As interest rates rise, so will their profits from this area.
Do you think their IRA account is good to use? I have a 401k account from old employer (with maintenance fees) want to roll over it to an IRA account and invest that money in stocks/bonds. Please suggest if you have details on IRA..
Firstrade has confirmed that there is no trading commission in their IRA accounts, looks like a good deal to me.
I, too, was going to ask, “Are they legit?” According to their web page, they use Apex Clearing Corp, same as Robinhood, et al. According to their web page, they are also a member of SIPC and thus have their insurance.
Although I already have enough investment accounts, I might give them a try. Deposit a small amount to experiment and see how they compare.
Yes, they are like a lot of the other discount brokers. SIPC insured and Apex Clearing. You can also use FINRA BrokerCheck and the Firm tab. https://brokercheck.finra.org
Thanks for a great tip! I will be transferring my accounts from Interactive Brokers. In addition to Robinhood, there is also Webull (free stock trading but no options yet).
Now show me where I can generate a low cost etf portfolio for RETIREE’s who need a consistant income for free and I’m all set on the DIY portfolio management.
I checked with customer service, and they said that there is a $20 fee for holding mutual funds for less than 90 days. But there is no short term trading fee for ETFs with Firstrade. It is still a good deal. I am currently with E*Trade and have 3 ETFs and 2 mutual funds in my Roth. I am seriously considering making the switch to Firstrade.
Just had my first experience with Firstrade. No problems.
Got my application approved and my initial deposit. Made a couple of purchases. They were successful and no fees charged.
Comparing with my experience with Robinhood, Firstrade’s UI is, what I would call, efficient. It is a simple design but don’t have to do a lot of hunting to do things.
I was considering opening a Fidelity account soon, but having seen this, I confirmed my Firstrade account still works after 5 years! The interface hasn’t changed and remains austere, to say the least. I didn’t have any problems with Firstrade when I used it. I moved everything over to Vanguard though for access to their funds and ETFs years ago though.
Thanks for posting this! Exciting news!
It’s worth noting that they don’t seem to update their educational materials, and they still list the 2014 year rates and the definition for a dividend is incorrect. (“Dividends paid through additional shares of stock rather than cash.”) So I can’t recommend their educational materials. That said, there’s such a wealth of information available elsewhere, including here, that it mostly looks embarrassing; it’s only dangerous if Firstrade is your first broker.
I was hoping other discount brokerages will follow suit. And then I realized most firsttrade’s competitors (ie: scottrade, tradeking, thinkorswim) have been bought by larger firms already.
I have an account with Vanguard with just target retirement 2045 shares. Is there any reason I shouldn’t move everything from that to an account with these guys with the same shares? Actually, do they have access to the vanguard target retirement funds?
If I want to sell all my 2045 shares and use that to buy 2035 shares, I assume there’s a fee/percentage I have to pay with the vanguard account. If I did the same thing with a firstrade account, would there be no fee/percentage to pay?
I’m pretty sure it would be free to sell/buy Target Retirement funds both at Vanguard and Firstrade. You would need to consider tax consequences if held in a taxable account (not IRA).