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Written by Edward Canty on July 18, 2019
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Firstrade Review 2020: Best Zero Fee Brokerage?

Firstrade Review 2020

When it comes to investing in the stock market, there are countless apps and platforms to choose from. At Investing Simple, our goal is to help you understand what platform best suits your needs as an investor. Today, we will be reviewing a commission-free brokerage dating back to 1985.

Firstrade securities is an online stock trading platform offering free trades. The platform has been around for some time now and was originally an online discount broker offering trades for a commission. Now, due to competition from free trading apps like Robinhood, Firstrade offers completely free stock trades.

This is a game-changer as most brokerages charge commissions between $5 and $10 per trade depending on the security and platform. Now trading stocks, options, penny stocks, mutual funds, and ETFs all have $0 commission fees. Here is our full review of Firstrade.

What Is Firstrade?

firstrade review

Firstrade began back in the 1980s under the name First Flushing Securities in the town of Flushing, NY. In 1997, the company was rebranded to Firstrade Securities and launched Firstrade.com, one of the pioneer websites to offer online security trades. 

Now, Firstrade offers free trading with a $0 minimum deposit.

This is a recent rollout by Firstrade in August of 2018 and now competes with the new players in the game such as Robinhood and Webull.

Firstrade also offers a variety of investment tools and educational resources. There are a variety of account types on its platform from IRAs to individual taxable accounts.

On top of that, Firstrade offers many features that investors are looking for, such as a dividend reinvestment plan or DRIP. In a nutshell, this platform gives you the features and functionality of a full-blown online discount brokerage with no trading commissions and no minimum. You can use both web and mobile versions of Firstrade to begin trading.

Who Should Consider Firstrade?

Investors who want to manage their own investments will be the primary users of the Firstrade platform. Firstrade does not offer robo advisor services where they manage your investments like Betterment. Firstrade may be a great platform for investors who are cost-conscious and want to save money on commissions and fees. The platform is best for moderate to more advanced investors. 

Firstrade may not offer the more advanced tools offered on other trading platforms such as TD Ameritrade or E-Trade, but has the advantage over these brokers when it comes to free trades.

For those investors who would like even more advanced tools, Firstrade may not be the best option for you. Firstrade offers investors a relatively simple platform with the benefit of free trades. 

Dividend investors will especially enjoy the fact that Firstrade is one of the only free platforms offering a DRIP. This allows you to reinvest your dividends, earning compound interest in the process. Dividend reinvestment is offered on stocks trading above $4 per share. If you don't have enough for a whole share of the stocks, fractional shares will be purchased.

Firstrade investing platform.

Firstrade Features

Commission Free Trades

Firstrade offers free trades for stocks, ETFs, Mutual Funds and Options. This is a very unique feature as most brokerages charge a fee for each trade you make. Firstrade is also one of the only free brokerages we have come across that supports mutual funds as well as fixed-income investments like CDs.

Account Types

  • Taxable
  • Joint Taxable
  • Traditional IRA
  • Roth IRA
  • SEP IRA
  • Simple IRA
  • Trusts
  • Partnerships
  • Coverdell
  • Custodial

Account Protection

You may be asking yourself, is Firstrade safe? Firstrade is covered by SIPC (Securities Investor Protection Corporation) which covers accounts up to $500,000 in cash or securities. Firstrade also adds additional coverage and covers 100% of losses due to unauthorized trading activity in your account.

Clearing House

Firstrade uses Apex Clearing to clear all the trades on its platform. Apex clearing does the confirmation, settlement, and delivery of securities. Other trading apps like M1 Finance use the same clearinghouse. 

International Accounts

Investors in over 20 international countries can open accounts using the Firstrade platform. This is a feature not commonly offered by online brokerages. If you are an investor outside the US, this feature may be a game-changer. We have come across very few brokerage accounts offering options for international investors. 

Dividend Reinvestment (DRIP)

Investors can elect to enroll in the Firstrade dividend reinvestment program where their dividends will be automatically reinvested. This feature allows investors to compound their returns without having to manually reinvest their dividends. To qualify for this, a stock that pays a dividend must be over $4 per share. If you do not have enough to purchase a whole share, fractional shares are purchased instead. 

Educational Resources

Videos, articles, podcasts, and ebooks are available for investors to learn more about investment strategy and techniques. Investors have access to market news, stock reports, as well as real-time watch lists. 

Firstrade Tax Center

This is where investors can view their tax documents (1099s) and can learn more about how taxes work with investments. There are a variety of educational resources in the Firstrade tax center with information on capital gains, dividends, wash sales, and more. 

Extended Trading Hours

Firstrade offers extended trading hours on its platform for no extra fee. Traders can buy and sell securities pre-market open and post-market close. Traders can buy and sell securities virtually from 8 am to 8 pm. Only limit orders are allowed during extended-hours trading.

Pre-Market Trading: 8:00 am - 9:25 am

After-Market Trading: 4:05 pm - 8:00 pm

Chat And Phone Support

Live chat is available 24/7 where you can chat with a Firstrade specialist.

Firstrade is also available for phone support from 8 am to 6 pm.

U.S. Toll-Free1-800-869-8800

Overseas1-718-961-6600

Firstrade Email Support: service[at]firstrade.com

Firstrade Cash Management Account

Cash management accounts by Firstrade allow investors to manage, invest, and spend their money all within one account. Investors can use a Firstrade debit card directly linked to your brokerage account to fund purchases. This makes managing your money easier all within one account. Firstrade offers a free debit/ATM card, check writing, and worldwide ATM access for its Firstrade cash management account users.

Commission-Free ETFs

All ETFs offered on the Firstrade platform are commission free. One of the most important features of Firstrade is the commission-free ETF offerings. Now investors can gain exposure to broad market indexes, sector, region, or strategic funds for $0 commission using Firstrade. 

Firstrade Premier Services

Firstrade offers premium services for accounts with a minimum of $50,000 balance. This is not very different from the original service; however, Firstrade will assign you a dedicated representative. The premium service also gives investors reduced fees for internal asset transfers, verification letters, and stop payments. 

Firstrade Options Wizard

One of the most useful features offered by Firstrade is the Options Wizard. This is where investors can use a variety of tools and resources to help improve their trading skills. There are over 65 technical indicators, support/ resistance levels, trend indicators, profit and loss simulations, and over 40 complex options strategies. Options wizard will give you an idea of the value and chance of success for any specific options trade. 

Firstrade options wizard gives you access to 40 plus options strategies.

The Verdict: Firstrade

Many investment platforms today charge commissions and fees to trade securities on their platform. These fees can add up over time. It seems like the prevailing trend here is a switch from the legacy business model to the new fee-free model.

We believe more brokerages will be following suit due to the competition.

In a nutshell, we feel that Firstrade is offering you the features, support, and functionality of a full-blown online discount broker with the fee-free model that is popular among many new investing apps.

Across the board, all of these free trading platforms seem to be lacking in many areas.

Firstrade has many features investors are looking for and not finding with the free apps out there. This includes phone support, dividend reinvestment, retirement accounts, international support, and more.

On top of that, Firstrade brings a 30+ year reputation with them that these newer investing apps just do not have.

Article written by Edward Canty
Ed is a financial planner and personal finance enthusiast. At his day job, Ed helps clients plan for retirement, manage their investments, and navigate their tax situation. In his free time, Ed enjoys golfing, traveling, and wrenching on his old BMW.

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