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.
Summary
Firstrade is a great platform for those just starting out in the investment community. While the user interface is outdated, the functionality of the platform will help get any investor off to a great start.
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.
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 offers free trades for stocks, ETFs, Mutual Funds and Options. While this is standard across almost all brokerages at this point, it's worth noting that Firstrade is no different. Firstrade is also one of the few free brokerages we have come across that supports mutual funds as well as fixed-income investments like CDs.
Account Types
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.
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.
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.
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.
For long term investors that want to minimize idle cash, finding a brokerage that offers dividend reinvestment is a must.
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.
There's a lot to know about the stock market, so we appreciate it when brokerages go above and beyond to educate their clients before just throwing them in headfirst.
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.
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
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. This is a particularly attractive feature for investors who have become frustrated with the lack of customer support that apps like Robinhood offer their users and would prefer a hone number they can call in to.
U.S. Toll-Free: 1-800-869-8800
Overseas: 1-718-961-6600
Firstrade Email Support: service[at]firstrade.com
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.
For investors looking to streamline their finances, finding a broker that offers an all-in-one cash management solution is a must. A few other good options for this service are the M1 Finance Spend Account and the Betterment Cash Reserve.
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 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.
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.
The world of investing apps today typically has you choosing between startup apps with little support and frequent issues, or old-school brokerages that are slow to adopt new trends and new features. However, Firstrade falls in between both categories because they have a longer track record and are constantly innovating and pioneering new features for investors.
We believe more brokerages will be following suit and modeling Firstrade's approach.
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.
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