If you are looking to get started with investing and personal finance, but don't know how to get started, you have come to the right place.
The first step to any successful investment plan is to find the right broker, and we at Investing Simple are committed to helping you make that crucial decision.
The two brokers we are looking at today are Firstrade vs TradeStation, two popular choices in the brokerage industry today. One key factor that sets these two platforms apart from the competition is that they cater to both US and international investors. Most platforms offer accounts to US investors exclusively but these two platforms allow investors across the globe to put their cash to work!
We will take a look at the features, pros, cons, and fees of these platforms to help you decipher which is the best choice for you. Now let's get started!
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TradeStation Review 2021: Best Brokerage Account? |
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Firstrade Review 2021: Best Zero Fee Brokerage? |
Firstrade is an online broker that offers a wide array of financial products to its users.
Stocks, options, ETFs and more can be found on Firtrade, not to mention the diversity of account offerings you can find on the broker.
Firstrade's features are what make the online broker unique.
Cutting edge research, an array of financial products, and educational services are just a few of its many attractive features. Not to mention its mobile app that makes everything that much easier.
Firstrade's main goal with its mobile app is to take all of its website features and make a readily accessible platform to its users.
Available on both the App Store and Google Play Store, this mobile app simplifies the investment process so you can be a more efficient investor, trader, saver, and more.
A robust and responsive mobile app is a must-have for the newest generation of investors and compared with some of the other apps out there, Firstrade is definitely a frontrunner.
A very important aspect of Firstrade is its $0 commission fee structure.
Almost all of Firstrade's investment products including stocks, ETFs, options, mutual funds, options and fixed income can be traded with no extra cost. For Firstrade, keeping the cost of investing for its users at a minimum is a crucial aspect of its service. No complaints here!
You can choose from a wide variety of companies listed on both the NYSE, AMEX, NASDAQ, or OTC (fixed income) products through Firstrade.
You can also access over 11,000 mutual funds to increase the diversity of your portfolio, and margin investing. If you are more interested in stocks, ETFs, and options, Firstrade has you covered as it offers thousands of these securities on its platform!
Market research is a unique feature of Firstrade that separates it from many other brokers.
By having the ability to access thousands of stock reports from some of Wall Street's most well-known analysts, you can gain a market edge. These reports are updated daily so you have the most up to date information!
Firstrade offers many different account types, but the two we will be covering are the Traditional and Roth IRA accounts.
In a traditional IRA account, contributions can be made tax-free and the investments in the account can then grow tax-deferred. Firstrade offers this account type on its platform.
The other type of IRA account is the Roth IRA which unlike the Traditional account, is not deductible. The difference in a Roth IRA account is that the earnings on investments are free of taxes.
Remember that the sooner you get started, the faster you can save for retirement!
Firstrade is currently offering a free stock promotion to new users where they can receive up to 3 FREE stocks and the chance to win an iPhone!
In order to receive the first stock, you simply need to sign up for a Firstrade account before 12/30/20. This stock will be valued anywhere from $3 - $200 and is based on a lottery system. According to Firstrade, there is a 1 in 100 chance of receiving Apple, Boeing, or AMD stock.
To get two more free stocks, you'll just need to fund your new account with $100 or more. These stocks will come from the same pool as the original stock so your odds will be the same.
When you deposit $100 in your account, you'll also receive one raffle ticket for a drawing to win an iPhone 12. Firstrade is giving away 20 iPhone 12s, so your odds to win will depend on how many other people enter the drawing.
While $0 in brokerage commission fees are helpful in cutting costs, there are still some fees that you should be aware of before opening a Firstrade account.
Let's take a look at a few now!
If you buy a mutual fund with a total position of $500 on Firstrade and want to sell it within 90 days, you will not be charged a fee.
However, if your total position value on a mutual fund is below $500 and you decide to cash-out within 90 days, you will be charged a $19.95 redemption fee. This is definitely something to think about if you are interested in trading mutual funds in shorter durations with a smaller amount of money.
Rates vary on short borrow fees depending on the amount of money you are borrowing and how much you are looking to short of a stock or ETF.
TradeStation offers many different investment products ranging from stocks to CDs.
With so many investment features offered on its platform, it only makes sense to take a deep dive into some of the most popular ones.
TradeStation's features are vast, but to keep it short: the broker specializes in trading.
As the name suggests, TradeStation acts as a one-stop station for all your trading needs. Now let's stop the talking and check out some of the features that TradeStation offers!
Like Firstrade, TradeStation charges no extra commission on the stocks & ETFs that it offers.
This will lessen the burden of excess fees on your trading account and help you minimize your cost base. $0 commissions have made the financial markets more accessible to smaller investor's and TradeStation has kept up with this trend!
TradeStation's mobile app gives you the same capabilities as its desktop platform, but on the go and at your fingertips.
Whether it be technical charts, direct trading, or learning about the market through TradeStation's educational content, TradeStation Mobile covers it all. Speaking of educational content on TradeStation, the broker has some fantastic articles that you can view on its website.
Beyond trading in the financial markets, TradeStation also offers a diverse array of accounts that you can choose depending on your financial goals.
One of the main account types is the IRA account, and TradeStation offers four versions: Traditional IRA, Roth IRA, SEP IRA, and Simple IRA. Each of these accounts has a specific set of benefits, but all provide tax advantages for investors saving for retirement.
As a trading platform, TradeStation provides significant research tools and data to help traders make better trades. From market scanners and stock screeners, to fully customizable charting, this platform will likely be an effective all-in-one solution for traders of all experience levels.
TradeStation also offers paper trading to their users, which allows traders to practice and test various strategies using fake money. This is particularly useful for newer traders or those who want to get comfortable with the TradeStation without putting their hard-earned cash on the line.
When it comes to fees, investors always make it a priority to eliminate as many fees as possible.
And when TradeStation has managed to do this for many of its products, there are still some fees that are associated with the broker. Let's take a look at a few now.
The main fee with a TradeStation account is the margin fee. Margin is money borrowed, and if you plan on investing on borrowed money it is important to understand the margin rates that you will be charged.
While these fees vary depending on how much money you are looking to borrow, in general, you will be charged 8.625% for taking out a loan less than $25,000, 7.5% for a loan between $25,000 - $99,999, and if you are looking to take out more than $100,000, give them a call.
These are relatively standard rates, but if you do some shopping around you can probably find cheaper rates with a broker like Webull.
TradeStation's account service fee is one of its largest, totaling $99.95.
They waive this fee if you: trade 5,000 shares, trade 50 contracts, or maintain a $100,000 balance. If you are a smaller account looking to buy and hold for the long run, you may want to look into this more.
Many other free investing apps won't charge you any annual fee so it might make sense to look elsewhere if you won't meet that minimum.
Overall, both Firstrade and TradeStation execute on what they intend to do. They both offer exceptional investment services at low costs. The question does not necessarily come down to "which broker is better," but instead to which broker suits you best.
If you are a more long term investor, Firstrade may be a great option due to its favorable mutual fund pricing and lack of an account maintenance fee.
If instead, you are looking for a broker that puts emphasis on an active trading platform, TradeStation may be a great choice. In the end, it all comes down to your personal investing style and what you are looking to get out of an online broker.
It might also make sense to use both to take advantage of the benefits that each offer. Personally, I keep accounts with multiple brokerages for different purposes in order to utilize what each does best.
Thank you for reading and we hope this article helps you make a decision on which online broker may be the best fit for you.
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