Is Firstrade really free?

Firstrade is in fact a zero-commission broker when it comes to buying and selling US stocks. Zero commission is especially useful if you trade relatively low volumes, like buying stocks for less than $500 per trade, because you won't be hit with any minimum fees the broker might charge.

We should note that the payment-for-order-flow model, which is used by some zero-commission brokers to generate income (rather than relying on commissions), could potentially create a conflict of interest between you and your broker. This could result in trade execution (like routing your orders to specific market makers) that might be unfavorable for you under certain market conditions, especially when using market orders (as opposed to limit orders, which seem to be less affected).

Keep in mind that at some brokers, you could incur non-trading charges like withdrawal or inactivity fees. If you want to trade options, bonds or futures, then a transaction fee may also apply. Also, if you trade on margin, the margin rate charged by brokers can differ wildly. In the next chapter, we'll find out what these charges are at Firstrade and how they compare with fees charged by its closest competitors.

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Firstrade fees
Overview of Firstrade fees and charges

It's safe to say that Firstrade's fees are low in general. They either don't charge a brokerage fee for things that other brokers do, or they only charge a small amount.

Here's a high-level overview of Firstrade's fees

Firstrade Fees snapshot
Assets Fee level Fee terms
US stock fee Low $0 per trade
EURUSD fee - Not available
US mutual fund fees Low $0 per trade
Inactivity fee Low No inactivity fee

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Firstrade fees
Firstrade fees explained

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely because online brokerages' businesses can be much better scaled: from a purely technical standpoint, it doesn't make that much of a difference for them if they have 100 or 5,000 clients.

This is not to say, however, that they don't charge any fees at all. They make money by charging you various rates for various actions or events. Usually you need to keep an eye on the following three types of fees:

  • Trading fees - these are brokerage fees that you pay when you actually carry out a trade, like buying an Apple share or an ETF. What you pay is either a commission, a spread or a financing rate. Some brokers apply all of these.
    • A commission is either fixed or based on the traded volume.
    • A spread is the difference between the buy price and the sell price.
    • A financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
  • Non-trading fees. These are usually related to some operations you carry out in your account, such as depositing money, withdrawing money, or not trading for an extended period.

We compare Firstrade fees with its closest competitors, Chase You Invest and Vanguard.

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Firstrade fees
Firstrade trading fees

Firstrade's trading fees are low, which makes it suitable for you even if you trade often (i.e. several times a week).

Let's break down trading fees according to the different asset classes available at Firstrade.

Trading fees

Firstrade's trading fees are low.

Stock fees and ETF fees

Firstrade has low stock trading fees.

Stock fees of a $2,000 trade
Firstrade Chase You Invest Vanguard
US stock $0.0 $0.0 $7.0
UK stock - - -
German stock - - -

Fund fees

Firstrade fund fees are low.

Fees of a $2,000 fund purchase
Firstrade Chase You Invest Vanguard
Mutual fund $0.0 $0.0 $20.0
EU mutual fund - - -

Bond fees

Firstrade has low bond fees.

Fees of a $10,000 bond trade
Firstrade Chase You Invest Vanguard
US Treasury bond $0.0 $0.0 $0.0
EU government bond - - -

Options fees

Firstrade's options fees are low.

Options fees for 10 contracts
Firstrade Chase You Invest Vanguard
US stock options $0 $0.7 $10.0
US stock index options $0.0 $6.5 $10.0
UK stock index options - - -
German stock index options - - -

Margin rates

Firstrade margin rates are high.

Firstrade margin rates
Firstrade Chase You Invest Vanguard
USD margin rate 8.8% - 8.5%
EUR margin rate - - -

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Firstrade fees
Firstrade non-trading fees

When it comes to non-trading fees, Firstrade is a rather cheap broker.

Non-trading fees include various brokerage fees and charges at Firstrade that are not related to buying or selling assets. This can be a withdrawal fee, deposit fee, inactivity fee or account fee.

A high-level overview of how Firstrade stacks up in terms of non-trading fees
Firstrade Chase You Invest Vanguard
Withdrawal fee $0 $0 $0
Deposit fee $0 $0 $0
Inactivity fee No No No
Account fee No No No

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Firstrade fees
Firstrade deposit fee

Usually, brokers don't charge anything for deposits, and Firstrade is no different.

Firstrade deposit methods
Firstrade Chase You Invest Vanguard
Bank transfer Yes Yes Yes
Credit/debit card No No No
Electronic wallets No No No
Deposit fee $0 $0 $0

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Firstrade fees
Firstrade withdrawal fee

Firstrade generally doesn't charge a withdrawal fee.

Firstrade withdrawal fees and options compared
Firstrade Chase You Invest Vanguard
Bank transfer Yes Yes Yes
Credit/debit card No No No
Electronic wallets No No No
Withdrawal fee for bank transfer $0 $0 $0

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Firstrade fees
Firstrade inactivity fee

Firstrade does not apply an inactivity fee, which is great because your account won't be charged even if you do not trade for an extended period (like several months or years).

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Author of this article

Gergely Korpos

Author of this article

Gergely is the co-founder and CPO of Brokerchooser. His aim is to make personal investing crystal clear for everybody. Gergely has 10 years of experience in the financial markets. He concluded thousands of trades as a commodity trader and equity portfolio manager.

Gergely Korpos

Co-founder, CPO

Gergely is the co-founder and CPO of Brokerchooser. His aim is to make personal investing crystal clear for everybody. Gergely has 10 years of experience in the financial markets. He concluded thousands of trades as a commodity trader and equity portfolio manager.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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