Firstrade Review 2020

Firstrade has low fees. It offers free stock, ETF, funds, and options trading. The non-trading fees are low too. However, the margin rates are high.

How we ranked fees

We ranked Firstrade's fee levels as low, average or high based on how they compare to those of all reviewed brokers.

To get things rolling, let's go over some lingo related to broker fees. What you need to keep an eye on are trading fees, and non-trading fees.

• Trading fees occur when you trade. These can be commissions, spreads, financing rates and conversion fees.
• Non-trading fees include charges not directly related to trading, like withdrawal fees or inactivity fees.

In the sections below, you will find the most relevant fees of Firstrade for each asset class. For example, in the case of stock investing, commissions are the most important fees.

We also compared Firstrade's fees with those of two similar brokers we selected, Fidelity and E-Trade. This selection is based on objective factors such as products offered, client profile, fee structure, etc. See a more detailed rundown of Firstrade alternatives.

To have a clear overview of Firstrade, let's start with the trading fees.

Firstrade trading fees

Firstrade's trading fees are free. The fee structure is transparent and easy to understand, only the bonds require more attention. 

Stock fees and ETF fees

We have good news for you. Firstrade offers free stock trading. 

If you prefer stock trading on margin or short sale, you should check Firstrade financing rates.

Financing rates or margin rate is charged when you trade on margin or short a stock. This basically means that you borrow money or stocks from your broker to trade. For this borrowed money/stock you have to pay interest. This is the financing rate. It can be a significant proportion of your trading costs.

Firstrade financing rates are high. For stocks, the financing rates vary based on the base currency of your margin account.

Firstrade's financing rates are volume-tiered. It applies a base rate plus a premium depending on the financed amount. The base rate is set by its discretion, at the time of the Firstrade review the base rate was 7.25%.

The financing rates above are also applied for options trading, not just stocks. 

Fund fees

The mutual fund investing is also commission-free. 

Firstrade charges a $19.95 selling fee if mutual fund shares are held less than 90 days.

Bond fees

Firstrade has high bond fees. The bond fees vary based on the bond type you buy. We calculated the fees for Treasury bonds.

There is a $40 minimum commission for treasury, corporate, municipal, agencies, and zero bonds, while $30 for secondary CDs.

Options fees

Similarly to stocks, ETFs, and mutual funds, options trading is also commission-free. It's better than at the competitors.

Non-trading fees

Firstrade has low non-trading fees. There is no account fee and inactivity fee, but if you don't use the account for many years, there is a $100 dormant account processing fee. 

On the other hand, we discovered, that in the case of legal entities such as corporations, LLCs, or partnerships, there is a $100 fee for account opening and a $200 annual account fee.

There is no withdrawal fee if you use ACH transfer. However, the withdrawals to other domestic banks using wire transfer cost $30, while in case of foreign outgoing wire transfer costs $50. We tested ACH, so we had no withdrawal fee.

The account opening is fully digital and user-friendly. Firstrade is available for US and some non-US customers. On the flip side during the test we experienced a slower account opening, that took almost 3 business days.

Can you open an account?

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Firstrade targets mainly the US clients, but there are some non-US countries they also accept: China, Hong Kong, Israel, Japan, Macau, Mexico, New Zealand, Singapore, South Korea, Taiwan.

What is the minimum deposit at Firstrade?

The required Firstrade minimum deposit is $0 for both U.S. and international clients. The minimum deposit can be more if you trade on margin or prefer investing in portfolios.

*You trade with money borrowed from the broker, also called trading on leverage.

Account types

Firstrade offers several account types:

How to open your account

The account opening is fully digital and user-friendly. The online application took us roughly 15 minutes, but the verification is a bit slower. All together it is 3 business days until your account gets verified.

Here we walk you through the 8 Steps of Firstrade account opening process:

1. Add personal information and email address
2. Choose the account type, state your options and day trading preferences
3. Continue with some more personal info, and details for later verification of the account like Social Security Number
4. Add your personal phone number (which will your phone for the further registration process and contact point), and choose a security question
5. Disclose your employment and financial info
6. Give your investment profile and trading preferences
7. Set your funding preferences and connection
8. Review and submit your application

We think it is important to state clearly that there is a minor difference between the US and non-US client applications. If you are a Non-US client, you have to upload the agreed Online Service Agreement and the W-8 Ben tax form with a copy of your passport. Firstrade does not disclose any specific limitations regarding international account services.

We liked a lot Firstrade's user-friendly deposit and withdrawal process. There is no deposit fee and transferring money is easy. At the same time, there is still room for improvement. You can use only bank transfer and a high fee is charged for wire transfer withdrawals.

Deposit fees and options

Firstrade charges no deposit fees. Are you a US client? Then you can use check, ACH, and wire transfers for the deposit. Unfortunately at the time of our testing Credit/debit cards and electronic wallets were not available.

We tested ACH transfer and it took 2 business days. You can only deposit money from accounts that are previously linked to your brokerage account.

Firstrade withdrawal fees and options

Firstrade charges no withdrawal fees if you use ACH withdrawal. US domestic wire transfers cost $30, while international withdrawals cost $50.

How long does it take to withdraw money from Firstrade? We tested the bank transfer withdrawal and it took 2 business days.

You can only withdraw money to accounts in your name.

How do you withdraw money from Firstrade? You can withdraw money from Firstrade by following these steps:

• Log into the account
• Go to the "My accounts"
• Select the "Deposit/Transfer" menu, select "Withdraw from Firstrade"
• Choose the transfer type, your Firstrade account, and your previously connected external account
• Add the amount you wish to withdraw and set the frequency and date of the withdrawal
• Preview and initiate the withdrawal

Compare to other brokers

During our testing, we found Firstrade's web platform is simple and easy to use. If you are a beginner, then you can easily navigate it. On the negative side, it lacks a two-step login and the customizability is limited.

In our review, we tested Firstrade's in-house developed trading platform. You can find it under the name Firstrade Investor Center.

The web trading platform is available in English, Mandarin, and Cantonese.

Look and feel

The Firstrade web trading platform is user-friendly, provides good user experience and design. On the negative side, its customizability is limited. You can change the order of the tabs in the Investor Home, but other tabs aren't customizable.

Login and security

When you enter the web trading platform you can see that Firstrade provides only a one-step login authentication. Base on our industry research, a two-step login is more secure.

Search functions

The search functions are good. You can search by typing both a company's name or asset's ticker, the results are relevant.

Placing orders

You can use the following order types:

• Market,
• Limit,
• Stop,
• Stop limit,
• Stop trailing ($, %),
• Stop limit trailing ($, %)

If you are not familiar with the basic order types, read this overview.

There are also order time limits you can use:

• Good Till 90 days,
• Pre Market,
• After Market,
• Day + EXT,
• All or Nothing (AON)

Alerts and notifications

You can set alerts by giving different criteria, and the platform notifies you via your preset email. You can find the alerts under the 'Research & Tools' menu.

Portfolio and fee reports

Firstrade provides clear portfolio and fee reports. You can find them under 'My accounts' menu Position" and 'History'.

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Firstrade's mobile platform is user-friendly with a great search function. On the other hand, two-step login and price alerts are not provided and you can't trade mutual funds or bonds.

In our review, we tested the iOS version of Firstrade's inhouse developed mobile trading platform. It is also available for Andriod handsets.

Similarly to the web trading platform, the mobile trading platform is available in English, Mandarin, and Cantonese.

On the mobile trading platform, you can only trade stocks, ETFs and options, which is limited compared to the web trading platform.

Look and feel

After installing it, you can see that the Firstrade mobile trading platform is user-friendly and well designed.

Login and security

While Firstrade provides only a one-step login. A two-step login login would be most secure.

If you have an iOS mobile you can enable the biometric authentications: both face and touch ID are available.

Search functions

The search functions are good, you get relevant results quickly. We liked the integrated third-party analysts' opinions and the news feed. 

Placing orders

You can use the same order types and order time limits as in the web trading platform.

Alerts and notifications

Unfortunately, you can't set price alerts on Firstrade's mobile trading platform.

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Firstrade does not offer a desktop trading platform.

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Firstrade offers a good variety of asset classes, from stocks to options. However, the offered products cover only the US market and you cannot trade with futures or forex.

Firstrade has an average mutual fund, bond, and options selection, but it lags behind in stock and ETF lineups when we compare to all reviewed brokers.

Stock and ETF

In our test, it came clear that Firstrade covers only the US market. It is similar to E-Trade but less than Fidelity's selection, which gives access to international stock exchanges as well.

You can trade with stocks in 5 different markets. Namely: NYSE, NASDAQ, AMEX, OTCBB, OTC Pink. 

Fund

Firstrade provides a great number of mutual funds, but it's a bit less than the number of fund providers at Fidelity or E-Trade.

Bond

Firstrade has an average bond selection. It lags behind its closest competitors, Fidelity and E-Trade.

The bonds cover both government and corporate bonds.

Options

Firstrade covers CBOE and other US options exchanges but does not disclose which ones exactly.

Firstrade has great research tools. You can use many tools, including trading ideas, interactive charts, screeners, detailed fundamental data, heatmap, P&L analysis and an economic calendar.

You can find research tools under the 'Research& Tools menubar. Similarly to the trading platforms, the research tools are available in English, Mandarin, and Cantonese.

Trading ideas

Firstrade provides trading ideas for stocks, ETFs, and mutual funds. We were delighted by the integrated features:

• preset peer group comparison
• plotting of data

The trading ideas are from third-party providers, like Morningstar.

Fundamental data

Firstrade offers a good range of fundamental data. You will find data for different assets, from stocks to funds.

Just to mention a few of them, you can see the financial statement for 5 or 10 years, peer group companies, dividend calendar, etc.

Charting

Firstrade has good charting tools. You can easily edit the charts and use 50 technical indicators.

News feed

In our opinion, the news function could be still improved. It is easily readable but lacks visual elements, like charts or pictures. If you find  Benzinga, Briefing.com, or Zacks useful, then you will be happy with the Firstrade news channel. Their news are provided by the earlier mentioned third-parties.

Other research tools you will enjoy

There are great and sophisticated screeners for stocks, ETFs, and mutual funds. From the basic company information to technical indicators, you can use a wide range of filters.

We liked a lot the Option Wizard under the 'Education' menu. OptionsPlay.com developed Option Wizard, which is a great tool for you if you are into options trading.

Compare research pros and cons

Firstrade's support team provides relevant information and is available in English, Mandarin, and Cantonese. On the flip side, there is no 24/7 support and live chat is missing.

You can contact Firstrade via:

• telephone
• chatbot (intelligent FAQ)
• email

Firstrade's phone support works well. They gave relevant and helpful answers within a short time.

Firstrade has a chatbot (or intelligent FAQ), but it can answer only to the basic questions such as what kind of fees Firstrade has.

On email, we got mostly relevant answers, but it took them a couple of days to answer.

We missed 24/7 support availability, you can contact them from 8:30 am to 5:30 pm EST, between Monday and Friday.

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Are you a beginner or you believe in life long learning? Then Firstrade is clearly a good match for you. They offer good quality educational articles, a useful glossary, a bunch of platform videos and useful webinars. However, a demo account is missing.

We found the following ways at Firstrade, that might be handy for you:

• Platform tutorial videos
• General educational videos
• Webinars
• Quality educational articles

The platform tutorial videos are well placed, you can easily notice the relevant videos.

The general educational videos and the archive webinars have good content quality, ranging from stock trading to options trading. During the test we found hard to download the materials or catch a live webinar.

Besides videos, you can listen to podcasts and read Ebooks. Most of these features are accessible from your account under the 'Education' menu.

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Firstrade is regulated by top-tier financial authorities, such as SEC and FINRA. You are also protected by a high investor protection amount, $500,000 which includes $250,000 for cash. On the other hand, negative balance protection is not provided.

Is Firstrade regulated?

Yes, it is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Is Firstrade safe?

To be certain, we highly advise to check two facts:

• how you are protected if something goes wrong
• and what the background of the broker is.

How you are protected

Firstrade serves its clients through Firstrade Securities, Inc. Firstrade is regulated by the SEC and FINRA and all customers are covered by the US investor protection scheme, called SIPC.

The SIPC investor protection scheme protects against the loss of cash and securities in case the broker goes bust. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. This amount is substantially higher than the amount most investor protection schemes provide. 

Not all investments are protected by SIPC. In general, SIPC covers notes, stocks, bonds, mutual funds and other investment company shares, and other registered securities. It does not cover instruments such as unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interests in gold, silver, or other commodity futures contracts or commodity options.

Firstrade does not provide negative balance protection.

Background

Firstrade was established in 1985 under the name of First Flushing Securities. The longer track record a broker has, the more proof we have that it has successfully survived previous financial crises.

Being in operation for a long and regulated by a top-tier regulator are all great signs for Firstrade's safety.

Find your safe broker

Firstrade is one of the biggest discount US stockbrokers regulated by top-tier regulators.

It offers free stock, ETF, mutual funds, and options trading. It doesn't charge inactivity and account fees and there are a lot of quality research and educational tools you can use.

To provide an unbiased picture we have to mention some drawbacks though. Firstrade doesn't provide credit/debit cards and electronic wallets for transferring money. Are you interested only in U.S. market products? If yes, then you will be delighted. Otherwise, you might find insufficient that the product portfolio covers only the US market. The customer service is only 24/5 and you can't contact them via live chat. 

As there are low fees and no inactivity fee is charged, feel free to try Firstrade.

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