> > Firstrade Review 2024: A Low-Cost Online Broker

Firstrade Review 2024: A Low-Cost Online Broker

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Firstrade is an American low-cost online brokerage firm that was founded under the name First Flushing Securities back in 1985. Firstrade launched Firstrade.com in 1997 and has been serving its customers’ needs online ever since.

The low-cost online broker provides a wide range of investment products and tools for the U.S. market. Some of Firstrade’s offerings include stocks, ETFs, mutual funds, fixed-income products, and options trading.

This review will look at the broker’s services, pricing structure, pros, cons, and other essential factors to help you make an informed decision. At the end of this review, you will have all the necessary information to decide whether or not Firstrade is your low-cost online broker of choice.

Firstrade

Overall Rating 4.1

The Modest Wallet Overall Rating (Our Rating Methodology)

Bottom Line: Firstrade is an online trading platform directed at investors who want to execute their investment strategies in an easy and streamlined way. Firstrade enables its users to trade stocks, ETFs, options, and mutual funds free of charge using the web platform and mobile app.

Account minimum

4.5

Fees and trading costs

4.5

Investment selection

4.0

Accounts supported

4.0

Features and tools

4.0

Ease of use

3.5

Trading platform

4.0

Security

4.0

Customer support

4.0

Best for:

    Free trading
  • Mutual funds investors
  • International investors

Pros:

  • Commission free trades
  • Chinese language supported
  • No minimum deposits

Cons:

  • Outdated web-platform
  • No crypto and futures available
  • No forex trading

What Is Firstrade?

Firstrade is a trading platform founded by John Liu that primarily focuses on providing low-cost stock trading services. Users can expect a user-friendly mobile platform and fast order executions from this online broker.

Investors can begin trading on both the web and mobile apps. They have access to a range of features and accounts (e.g., retirement, cash management, etc.) to invest in.

Firstrade enables its users to trade stocks, ETFs, options, and mutual funds free of charge, which is still a significant financial incentive. Currently, the low-cost broker gives investors access to a good variety of asset classes, but no crypto, forex, or futures trading is available.

What is Firstrade
Source: Firstrade

>> Read Also: 12 Best Online Brokers for Stock Trading


How Does Firstrade Work?

Firstrade makes it easy for potential investors to open an account and start investing in the stock market using one of the various investing account types.

Account Minimum

Firstrade does not require a minimum deposit to open an account. This applies to both its U.S. and international accounts. This provider does offer margin and options-trading-enabled accounts that demand a higher balance.

Margin accounts require a minimum balance of $2,000, while accounts that are used to transact with uncovered puts are required to have a balance exceeding $10,000. This provider also requires that there are settled funds in the account to start trading securities.

Investing Account Types

Firstrade currently offers a wide range of investing account types to its investors.

As the name already states, a standard brokerage account can be used as a general investment account by one person (i.e., individual brokerage account) or a group of investors (i.e., joint brokerage account).

If investors are planning for retirement, IRAs, Roth IRAs, and other retirement accounts are also available in the U.S.

Legal entities in the U.S. also have the option to open a business account. Education savings accounts can be set up for quality educational services but are only available in the U.S. Custodial accounts cater to custodial purposes and are offered in the U.S. only.

If investors want to have brokerage and banking services together in one place, the Firstrade cash management account is the best option. 

Living overseas and using Firstrades services is also possible through an international account. This account is suited for all non-US investors.

Due to the broad selection of accounts to choose from, every investor should find a suitable account to invest in the stock market.

Firstrade Review
Source: Firstrade

>> Read Also: 12 Best Robo-Advisors: Automate Your Investments

Investment Selection

Firstrade supports trading of four different asset classes: stocks, exchange-traded funds (ETFs), mutual funds, and fixed-income securities. Firstrade no longer offers crypto trading. Customers who hold crypto with Firstrade can only sell their assets.

Stocks and ETFs

Firstrade supports trading of thousands of stocks and US-listed exchange-traded funds (ETFs) from the most well-established exchanges, including the Nasdaq, New York Stock Exchange, and AMEX, along with a selected group of over-the-counter (OTC) securities.

It is possible to invest in penny stocks with Firstarde and participate in extended-hours market sessions as well. Like many US-based brokers, Firstrade offers zero-commission trading for these securities and various different types of trade orders, including sophisticated ones like “One Triggers the Other (OTTO)”.

Fractional shares are not available at the moment. However, customers can opt to reinvest all dividends by enrolling in Firstrade’s DRIP program.

Options Trading

Options are derivatives that give the holder the right, not the obligation, to buy or sell an underlying asset at a given price when the expiration date is reached. Firstrade provides access to these instruments, primarily for stocks and ETFs.

Firstrade does not charge a commission or contract fee to operate with these instruments. In addition, Firstrade has made several powerful options trading tools available for sophisticated players to analyze different strategies, their risks, and possible outcomes. 

OptionsPlay is the name of its proprietary options trading interface, which offers daily trading ideas and strategies for generating income or speculating with market movements. Firstrade also makes educational materials available for beginners who would like to learn about options-related topics like Greek, duration, and time decay.

Mutual Funds

Firstrade offers access to 11,000 different mutual funds via its proprietary trading platforms. These funds vary in scope, investment methodology, and fee structure. 

Firstrade has created an advanced screener that allows customers to filter among this vast selection by using criteria such as load fees, asset class, management company, and performance.

It is also possible to set up recurring investments directed to a given mutual fund. This allows investors to stick to a disciplined investment plan, whether that is for retirement, wealth generation, or college savings purposes.

Fixed-Income Securities

Fixed-income assets provide investors with a steady and relatively reliable income stream. This asset class includes instruments like bonds, certificates of deposit (CDs), and preferred shares. 

It is possible to use the Firstrade trading platform to perform searches across the vast number of securities available so investors can identify the ones that provide the most attractive rates and risk profile.

Most of these securities can be traded on a net-yield basis, meaning that the broker adds a markup to the market price of the asset.

Opening an Account

Opening an account with Firstrade is user-friendly. The process is fully digital, and the online broker’s services are available to domestic and international investors.

Opening a Firstrade account begins by clicking on the orange Open an Account button located in the header bar on the company’s website. After clicking the button, the website redirects the user to another page. There, you are required to enter personal information (first and last name) and an email address.

After pressing Continue, you get to choose a favorite account type and give preferences for options and day trading. The next step is to enter more personal information (i.e., social security number) for account verification purposes. Also, a telephone number and a security question must be added to provide more security for the account.

You will also be asked to provide employment and financial information, create an investment profile, and enter trading and funding preferences.

All of this won’t take you longer than 20 minutes, and account verification will be completed within a few business days.

A favorable aspect is that the minimum deposit for a brokerage account is $0. If users want to trade on margin or use the broker for day trading, an initial minimum deposit of $2,000 and $25,000, respectively, is required.


Firstrade Features and Tools

Firstrade provides a wide range of services. From commission-free trading of stocks and ETFs to a dividend reinvestment plan (DRIP) to the options wizard, Firstrade has many great features investors can use.

Minimum Investment$0
Stock & ETF Fees$0 per trade
Options Fees$0 commissions and $0 contract fees
Mutual Funds Fees$0
Inactivity Fee$0
Withdrawal Fee$0
Investment TypesStocks, ETFs, Options, Mutual Funds and Bonds
Account TypesIndividual Taxable, Joint, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, SIMPLE IRA, Custodial, Coverdell ESA, Corporate & LLC, Partnership & LLP, Sole Proprietorship and Trust.
PlatformWeb-based and Mobile (iOS / Android)
Account FundingBank Transfer
Paper TradingNo
SIPC Protectionyes
Banking Servicesyes
SupportHelp Center, Phone (1-800-869-8800), and Contact Form

Commission-Free Trading

Nothing beats free trades. It doesn’t matter if you are a frequent trader or retirement investor; Firstrade keeps things simple. The broker currently offers free-of-charge stock, ETF, mutual funds, and options trading to its users. This is a big plus for investors who prefer to invest in these asset classes.

Fixed Income Investing

Compared to the platform’s commission-free trading, investing in fixed-income products comes at a cost for the investor. Firstrade charges a $30 commission for trading primary markets CDs. With Treasury Bills, Notes and Bonds, as well as Municipal Bonds, Agency Bonds, Zeros & Stripes, and secondary market CDs, Firstrade’s commissions are on a net yield basis.

Margin Trading

Margin trading makes it possible for investors to borrow money from their broker.

The upside of using a loan is that investors can buy more shares. Users are, therefore, able to increase the size of their portfolio position further.

The downside to this practice is that investors have to pay interest on the money they initially borrowed from their broker to buy the shares in the first place.

This interest is called the margin rate, and it might increase the investors’ trading costs significantly. With an annual margin rate of 13.75% for a margin balance under $25,000, Firstrade’s margin rates are relatively high compared to other brokers. The rates decrease with volume but only drop below 10% if investors borrow $1,000,000 or more.

Investors should carefully consider if margin trading on the Firstrade platform makes sense considering these high rates.

Extended Hour Trading

The broker offers extended hours of trading at no extra cost and guarantees 0.1-second trade execution. It is possible to trade from 8 am to 8 pm because Firstrade allows pre-market trading from 8:00 to 9:25 am as well as post-market trading from 4:05 to 8:00 pm.

Firstrade Extended Hour Trading
Source: Firstrade

>> Read Also: What are Dividends: Become a Dividend Aristocrat

Dividend Reinvestment Plan (DRIP)

Dividend investors will be happy with Firstrade because the discount broker is one of the only free platforms that offers a DRIP. Investors can sign up for the dividend reinvestment program and have their earnings reinvested automatically on dividend-paying stocks listed above $4 per share. If the earnings aren’t sufficient to buy a whole share, the platform will buy fractional shares instead.

This way, reinvesting dividends and earning compound interest will bring long-term investors to their financial goals faster.

Retirement & IRA Accounts

The low-cost broker offers multiple retirement and IRA accounts: 

  • Traditional IRA: Funding an account with pre-tax money which lowers the taxable income; retirement withdrawals will be taxed
  • Roth IRA: Account funding with after-tax money, but future withdrawals are tax-free
  • Rollover IRA: Moving money from an old employer-sponsored plan into an IRA
  • SEP IRA: Funds are invested the same way as in a traditional IRA but are used by business owners to provide retirement benefits for themselves and employees
  • SIMPLE IRA: Suitable for small employers who currently don’t sponsor a retirement plan

Cash Management Account

A free Firstrade cash management account allows an investor to take care of finances and investments hassle-free within one account. This all-in-one solution is perfect for investors who want to streamline their finances. The account equity requirement is $25,000.

Firstrade also offers a free debit card as part of the cash management account, which investors can link to their brokerage account. The debit card gives you access to worldwide ATMs at no annual fee.

Upcoming IPOs

The low-cost broker also delivers a monthly list of upcoming IPOs. The list includes information such as the market each IPO will take place on, the price and number of shares, the symbol, and the IPO date.

Firstrade Tax Center

In this dedicated tax section, users can view their tax documents, such as their 1099. The Firstrade tax center additionally gives access to common tax forms and provides educational information about capital gains, dividends, and other related topics.

Firstrade Financial Calculators

Firstrade created several financial calculators to help investors. Some of the calculators guide investors in how much they should be saving for their children’s college, whether they should do a Roth IRA conversion, or how much they will need to save for retirement.

Options Wizard

The Options Wizard is an excellent tool for every investor looking to improve his or her option trading skills further. The information resources and tools include trading strategy checklists, technical and trend indicators, profit/loss simulations, rankings, and more than 40+ options strategies.

By using these tools and resources, users can understand the value and success of any trade they want to make. Through sophisticated analytics, the Options Wizard can provide instant feedback.

Options Wizard Firstrade
Source: Firstrade

>> Read Also: What is a Bond: Everything You Need to Know

Research and Education Tools

Firstrade offers its users high-quality, well-balanced research tools that include trading ideas, interactive charts, detailed fundamental data, reports, and more.

The reports and trading ideas for stocks, ETFs, and mutual funds mainly come from Morningstar, a well-known stock analysis firm. Investors can find dividend calendars, financial statements, and other essential data in the fundamental data section. The charting gives great flexibility for editing charts and using indicators, and the screeners allow for sophisticated filtering.

Additionally, the Firstrade Education Center provides beginner investors with great platform tutorial videos, webinars, asset class articles, and educational videos to learn about basic investment topics and strategies. Even podcasts and eBooks are available as resources.


Firstrade Trading Platform

Firstrade’s web and mobile apps are easy to use and quick to master, even for absolute beginners. However, two-factor authorization isn’t supported, which may raise security concerns for some users.

The web platform offers a decent user experience, but it generally feels outdated compared to other modern online brokers like Robinhood, Moomoo, or Webull.

Various order times, order types, and alerts and notifications are also available. The only minor downside of the platform is that customization options are limited.

The Firstrade mobile trading app offers a clean experience. It is well-designed, intuitive, provides excellent search results, and uses the same order types and options as the website. Unfortunately, it is not possible to trade mutual funds and bonds in the app. The app also lacks alert functionality.


Firstrade Customer Support

Firstrade has created a Support section within its website where customers can find answers to the most frequently asked questions (FAQs) for topics including taxation, deposits, retirement accounts, account management, and international accounts.

It is possible to contact Firstrade through various channels. You can choose from classic phone and email support or send a fax. Firstrade has both a U.S. number (1-800-869-8800) that offers toll-free calls and a specific line for international customers or calls made outside the U.S. (1-718-961-6600).

Live chat is not supported at this time. Contacting customer support via phone is possible from Monday through Friday from 8 am to 6 pm EST (which covers the platform’s main trading hours).

Firstrade’s official Trustpilot profile, which has been verified and claimed by the company, displays a 2-star rating for the provider after a total of 38 reviews. Given the large number of customers that this platform has, this number of reviews should not be considered representative of the overall opinion that consumers have about the platform and its customer support.

Note that Firstrade is not a Better Business Bureau (BBB) accredited organization. At the moment, the profile shows a rating of 1 out of 5 stars.


Firstrade Ease of Use

The Firstrade mobile app is available for both iOS and Android devices on their respective app stores. It is possible to perform the most relevant actions that are available on the web-based interface, such as placing trade orders, managing the account, making deposits, scheduling recurring investments, and using the stock screener and advanced options trading tool.

Over 2,500 banks can be linked to the platform to make deposits. The app features a portfolio dashboard that showcases key metrics like profits & losses, position sizes, buying power, margin balance, and more.

Customers appear to be satisfied with the performance of the app, as indicated by online reviews. On the Google Play Store, the app has been downloaded more than 500,000 times and has received a rating of 4.6 stars after more than 8,000 reviews. It appears that this provider is continually updating the app, as the last registered update was performed just a week ago.

It also appears that the app is more popular among users of Android devices, as it has only received 134 reviews on the Apple App Store.


Firstrade Security

Firstrade Securities Inc. is a brokerage services provider registered with the Financial Regulatory Authority (FINRA) of the United States. In addition, the company is a member of the Securities Investor Protection Corporation (SIPC). SIPC coverage provides coverage for up to $500,000 in customer assets per account, including up to $250,000 in cash.

All of the personal data from customers is transferred in SSL-secured environments for both the mobile applications and the website. It is also possible to secure the account via a two-factor authentication (2FA) method in the form of a PIN number.

Firstrade does not sell any of the personal information it gathers from its customers to third parties.

The provider offers an ‘Online Protection Guarantee’ that includes restoring the customers’ account balance to its previous state prior to a reported cybersecurity incident. Various conditions apply to be eligible for this program.


Firstrade Fees

Firstrade has a very user-friendly fee structure and low overall fees.

No commissions or fees are charged for trading stocks, ETFs, funds, and options. Firstrade only charges a Short Term Redemption Fee ($19.95) if mutual bond shares are held for less than 90 days, which is not the goal for long-term investors.

The only assets that need some attention from the investor are fixed-income products. Firstrade charges a $30 trading commission for primary market CDs. Commissions on Treasury Bonds, T-Bills, Notes, Municipal Bonds, Agency Bonds trades are charged on a net yield basis.

In addition to the points above, non-trading fees are low. Firstrade does not charge any account fees for the user’s inactivity or any withdrawals using ACH transfer (other wire transfers to domestic or international banks cost $25). On top of that, no minimum deposit is required to open an account.

Both aspects, no trading fees, and low non-trading fees, are significant benefits for investors.


Firstrade Pros Explained

  • Firstrade offers free trading of stocks, ETFs, mutual funds, and options
  • Low non-trading fees, such as account fees and inactivity fees
  • No minimum initial account deposits are necessary
  • Fully digital and user-friendly trading platform
  • Solid research tools available to traders
  • Educational resources, including videos, webinars, podcasts, and eBooks available on their website
  • Mobile apps are easy to use, intuitive, and well-designed

Firstrade Cons Explained

  • Investors can only invest in the U.S. market
  • Cryptocurrency, forex, and futures trading are not supported
  • Customer phone support is available only Monday through Friday from 8 am to 6 pm
  • High margin rates
  • Safer two-factor authorization is not available
  • The mobile app doesn’t support the trading of mutual funds or bonds
  • No credit/debit cards and electronic wallets can be used for money transfers

Firstrade Alternatives

There are a few other low-cost brokers that offer similar features. Before opting for Firstrade, make sure you check out the two competitors below.

Firstrade vs. Robinhood

The services Robinhood and Firstrade offer are relatively similar. Both offer $0-commission trading for stocks, ETFs, and options and provide straightforward interfaces with a great user experience. Robinhood also adds two-factor security measures.

The primary users of Robinhood are millennials. The reason for this is that it is possible to trade cryptocurrency and fractional shares on Robinhood. Firstrade also lags behind in UX/UI on its platforms, tools, and educational resources compared to Robinhood.

A significant disadvantage of Robinhood is that it does not offer mutual fund trading. In contrast, Firstrade allows users to trade mutual funds free of charge. Read our full Robinhood review to learn more.

Firstrade vs. Webull

Webull also offers very similar services and fee structures. Neither Firstrade nor Webull charges for trades on stocks, ETFs, and options, and both have low non-trading fees (no inactivity fees or minimum deposits)

However, there are areas where Webull lags behind Firstrade. On Webull, it is not possible to trade mutual bonds, investment accounts are limited, and there is no phone support available.

Webull excels with its interface because it is fully customizable compared to the few options on Firstrade and beginner-friendly tools such as virtual trading, where new investors can practice. Check out our full Webull review to learn more.

FirstradeWebullRobinhood
Our Rating

4.1

4.0

3.6

Account Minimum$0$0$0
Trading Fees$0$0$0
AppsMobile (iOS and Android)Mobile (iOS and Android)Mobile (iOS and Android)
PromotionsGet up to $250 in transfer fee rebatesGet up to 12 free stocks (*when you open and fund a new account)Get 1 free stock (*after linking your bank account —stock value range $5.00-$200)
Margin TradingYesYesYes

Who Is Firstrade Best For?

Firstrade is excellent for investors who want to take care of their investments on an all-around easy-to-use platform and those seeking a free broker that offers a DRIP. It is also perfect for investors who are cost-conscious and looking for free-of-charge trading.

If investors want to trade crypto, forex, or futures or need even more advanced tools, Firstrade isn’t the best option out there for them. Also, investors who need a robo advisor or professional investment management should go with a different broker.


Firstrade FAQ

Below are some of the most frequently asked questions about Firstrade and its services, alongside our answers:

Is Firstrade a Good Broker?

Firstrade is a solid choice for both beginners and advanced investors. The broker offers free trades, even for mutual bonds and options. It has low non-trading fees and provides great research and educational tools.

Is Firstrade Safe?

Firstrade has a track record of more than 30+ years. This shows that the discount broker has already weathered some severe financial crises successfully.

The broker is also overseen by top-tier authorities such as the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

How Does Firstrade Make Money?

As it offers $0-commission trading across the board, Firstrade has to find other ways to make money. They make money through:

● The platform’s margin rates 
● Transaction fees 
● Gaining interest on the idle cash sitting in investor’s accounts
● Directing order flow to market makers and being incentivized for it 
● Offering extra cost services such as phone-assisted trades

Is Firstrade Free?

Opening a Firstrade account is free and doesn’t require a minimum deposit. Trades on stocks, ETFs, mutual funds, and options are also free of charge.

In A Nutshell

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF, mutual fund and options trading
  • Promotion: Get up to $250 in transfer fee rebates
Firstrade

on Firstrade’s website


Final Thoughts

Although it is not as famous as Robinhood or Webull, Firstrade still brings more than 30 years of experience to the table and provides excellent overall value to investors. 

The low-cost broker is a great fit for beginners and investors looking for zero-commission trading across multiple asset classes, no inactivity or account fees, and an easy-to-use, low-cost broker platform.

Firstrade further offers many high-quality educational and research tools and some great features for investors looking to improve their financial knowledge and skills.

However, it does have some drawbacks. Firstrade covers only the US market, trading crypto/forex/futures is not possible, 24/7 customer support is not available, and debit cards/credit cards and electronic wallets aren’t accepted for money transfer.

Having said this, Firstrade is an affordable and one of the best discount brokers for novices who make their first steps in the investment world.

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