For investors today, there are countless options for opening a brokerage account. In fact, the entire experience can be a bit overwhelming! That being said, here are two that you will definitely want to pay attention to when making your important decision.
Firstrade might not be a household name like Robinhood, but I think you’ll agree that Firstrade has many features that just might surprise you. Robinhood and Firstrade were both founded with the idea that investors should have the freedom to make their own trades and investments without enormous fees or any fees at all.
Robinhood is a newer fintech startup while Firstrade is an old school brokerage dating back to the 1980's! Here is our full review of Firstrade vs Robinhood.
Robinhood Review 2021: Best Investing App?
Firstrade Review 2021: Best Zero Fee Brokerage?
|Commission-Free||Stocks, ETFs, Options, Mutual Funds||Stocks, ETFs, Options, Cryptocurrency|
|Promotion||Free stock when you refer a friend||Free stock when you sign up or refer a friend|
|Best For||Trading and Retirement||Trading and Crypto|
Firstrade is an online brokerage firm that was started in 1985.
This company prides itself on being the one-stop-shop for all your investment needs. Although not as well known as other brokerage firms, Firstrade has withstood the test of time, a clear sign that it has something good to offer.
Whether you want to try investing in individual assets, ETFs, options, or bonds, Firstrade is a company you should consider.
Currently, Firstrade is offering one of the best free stock promotions in the industry. New users who sign up for the platform and fund their accounts with at least $100 will receive 3 free stocks as well as the chance to win a free iPhone 12!
As the number of brokerage accounts increases, so does the competition between them for our business. On the bright side, this translates into some amazing free stock promotions like the one offered by Firstrade.
You'll receive your first free stock just for opening the account. Then after funding with at least $100, you'll get 2 more free stocks and be entered into a drawing to win 1 of 20 iPhone 12s. The free stocks are chosen on a lottery basis and range anywhere from $3 to $200 each. So if you're lucky, you could end up with $600 in free stock!
Now, this is the current promotion, but it is subject to change at any point. For the most up-to-date promotion, click the button below to check out the current offer.
Although many of these features are now extremely common among brokerage firms, it’s important to know the details before signing up.
Let’s dive into some of the more notable pieces of Firstrade’s offering in areas like investment options, commissions and fees, research and data, customer service, and technology
Like what you will find with Robinhood and many of the more ‘trendy’ brokerage accounts, Firstrade allows investors to access several tradable securities. These include stocks, bonds, mutual funds, ETFs, and options. However, commission-free mutual funds are not as common as the others listed above.
Firstrade offers more than 2,200 no-fee ETFs and more than 11,000 mutual funds. With this many options to choose from, you’ll likely have no problems finding what you’re looking for with Firstrade.
There are zero commissions on stock trading so get in and out of Tesla as many times as you want, I know I have. Options contracts with no fees is also a refreshing phrase. With options, you pay $0 commission & $0 contract fees, no exchange, exercise, or assignment fees. How’s that for a brokerage account?
In addition, all mutual funds and ETFs come commission-free.
Firstrade makes money outside of charging fees to customers. If you are curious how, check out our article on how Firstrade makes money.
With all those savings on fees, you could quit your second job and spend more time doing research with Firstrade’s selection of news articles, video commentary, and stock reports all furnished from Morningstar all for free.
Firstrade truly believes that knowledge is power and is willing to make the investment in meaningful research and data to give its customers the best experience.
By providing this level of resources to their investors, Firstrade aims to create a comprehensive platform such that investors won't need to use any other services or websites to facilitate their investing.
This is an area that Firstrade could probably improve as they only have representatives available Monday - Friday from 8:00 am - 6:00 pm eastern time. That means that if you need help outside of those hours, you can either send in an email or talk to the chatbot.
Firstrade is available to investors in 20+ countries. This is a unique offering, especially among many of the other investing apps that are popping up that serve only those in the United States.
If you are an investor outside of the US, this feature makes Firstrade one of the few feasible options available to you in the world of online investing.
Firstrade has 3 different platforms where you can master your investing skills. The first is the desktop platform which is your standard web page that comes prepped with relevant news stories and insights into the largest movers of the day.
The second is the Firstrade navigator which condenses all the most pressing information right into one screen so you can see everything with one glance. This platform also features widgets that you can swap in and out to customize your page. In addition, real-time data and in-depth analyses are available with the Firstrade navigator.
Last but not least is the Options Wizard.
This provides you instant feedback on the value and likelihood of success of any options trades that you are considering. It also gives you access to 65+ technical indicators as well as 1-month to 6-month trend indicators. This is a great tool if you are just starting out in options tradings as it provides over 40 options strategies for you to consider.
And of course, as with any reputable company, there is also an app version so you can handle all of your transactions from your phone as well.
The options that Firstrade gives to their users is a big plus because it allows you to customize your experience and build out a system that best suits your investing style and your needs.
Robinhood is widely known as an industry shaker and rightfully so. For years, Robinhood was one of the only brokerages that offered commission-free stock trading, although now it is more common.
Account minimums of $0, fee-free stocks, ETFs and options, Robinhood Gold, high-yield savings, promotional stocks, fractional shares, and cryptocurrency are just some of the perks that Robinhood offers that have had young investors captivated since their launch date.
Having a $0 account minimum is a great bargaining chip when trying to attract future world-class investors. Having a $0 minimum means you are free to come and go as you please without worrying about having enough to begin investing.
However, if you are interested in more advanced and ‘riskier’ investing, there is an account minimum of $2,000 to open a margin account.
As you’ve probably heard several times by now, Robinhood was the pioneer in allowing investors to trade with no commissions. This includes all assets that trade on Robinhood, not just stocks and ETFs.
With Robinhood Gold. users can access cash instantly, review level II market data, utilize margin investing, and study professional research from Morningstar on 1,700 stocks.
Like mentioned earlier, without paying the $5 per month, users need to wait upwards of 3 business days for their funds to finally settle from the bank. Waiting that long often could be the difference between a huge return and a bust.
However, even without Robinhood Gold, you have instant access to up to $1,000!
Depending on your account balance, you might be able to access $5K - $50K instantaneously. This makes a huge difference especially if you’re trying to make some big moves quickly.
Robinhood’s cash management feature is a great option for those who trust Robinhood with more than just their fun money and want to be earning some nearly risk-free interest on the side.
This is a huge advantage over traditional banking as interest rates for savings accounts have largely been stagnant for several years. Users that store their money with Robinhood also have access to an optional debit card and 75,000 ATMs where you can withdraw your cash for free.
Yield As Of 0.30% APY 11/17/20
If you sign up for Robinhood, you will get a free stock worth between $2.50 and $200. The free stock is based on a lottery system.
According to Robinhood’s Terms and Conditions... “There is an approximately 98% chance of the stock bonus having a value of $2.50-$10, an approximately 1% chance of the stock bonus having a value of $10-$50, and an approximately 1% chance of the stock bonus having a value of $50-$200, based on the price of shares at the time of purchase.”
No matter what stock you end up with, free is free, and you can also get more free stock every time you refer one of your friends to sign up for the app.
This is a great perk that allows you to purchase fractional shares of a company. With this feature, you will be able to purchase shares of stocks and ETFs in $1 increments.
As a beginner investor, this is useful because it allows you to gain access to higher-priced stocks like Amazon with as little as a few dollars.
With other brokers like Firstrade, you'll have to pony up the full share price, which in the case of Amazon is over $3,000! The ability to buy fractional shares makes it possible to diversify your portfolio even with a lower balance.
Robinhood offers users the ability to reinvest their dividends or receive them in cash. If you choose to reinvest your dividends, Robinhood will automatically take any dividends you receive and use them to buy fractional shares of the company that bought them.
This feature is particularly useful for long-term investors because it allows them to capitalize on compound interest and increase the growth rate on their portfolio. It also reduces the cash drag of the portfolio because you don't end up sitting on as much cash because a greater percentage of your portfolio is invested and working for you.
Robinhood allows you to trade a variety of popular cryptocurrencies 100% commission-free.
It is important to recognize that Robinhood Crypto is not apart of Robinhood Financial LLC, but Robinhood Crypto LLC, and as such is held in a different account which is not regulated by FINRA or insured by the FDIC. You are also unable to transfer your crypto out of your Robinhood account.
A relatively new addition to Robinhood is the ability to set up recurring investments. A recurring investment allows an investor to automate a recurring deposit to their Robinhood account that is automatically fully invested into the investment of their choice.
For example, you could set up a recurring investment to buy $200 of Amazon every month, and then at the beginning of every month, Robinhood would pull $200 from your checking account and use it to purchase $200 worth of Amazon stock.
This feature allows investors to automatically practice dollar-cost-averaging, a strategy that Warren Buffet advises investors to practice. The strategy involves investing a consistent amount on a consistent basis so that you ensure you aren't buying in at the top, but instead buy in while the stock is at varying price levels.
While all online brokers allow you to create a watchlist, Robinhood took this a step further by allowing investors to create and track dozens of lists. Instead of one single jumbled watchlist, you can segment the companies you want to keep an eye on into different categories and set up separate notifications for each list.
This is particularly effective for traders that want to keep tabs on a variety of potential investments for different reasons and not lose track of why they bookmarked certain companies. This feature is still relatively new so we expect to see Robinhood roll out additional functionality for lists in the future.
Ultimately, these are both great options for new investors but neither really stack up to be the perfect platform. Both have obvious pros and cons. For Robinhood, we love the fractional shares, the instant transfers, and the cryptocurrency. But we don’t love that there are no retirement options. This means we will still have to look elsewhere for retirement investing.
Additionally, the availability to international investors makes Firstrade the clear winner if you are outside the US.
In the end, these are both great options for new investors that are wanting to try before they buy. If you are simply wanting to try your hand at investing without focusing just yet on retirement, then Robinhood is a clear winner. However, if your goal is more long-term in nature, then Firstrade will have better resources for you.
Whichever platform you choose, the most important thing is that you get started. Investing is a process that takes time until you're able to see the fruits of your labor so make a choice and get started now so that you can start building wealth and preparing for the future.