How much does it cost to open brokerage or IRA account at Firstrade? Sign up minimum initial deposit requirements and account types.

How to Open an Firstrade Account

Firstrade is quickly becoming a popular broker, mostly due to its $0 commissions. If you are considering opening a Firstrade account but aren’t sure who qualifies and which type of Firstrade account is right for you, then you’ve come to the right place. This article will offer an overview of the different Firstrade accounts and what to expect during the account opening process.

Firstrade Minimum Initial Deposit

One of the great things about Firstrade is that not only are most types of trades commission-free, but it’s also completely free to open your Firstrade account as there are no minimum balance requirements or maintenance fees. Any U.S. residents that are legal adults (usually 18 years and up) are eligible to open an account.

Firstrade also makes it easy for many non-U.S. residents to open an international account with them in order to access the U.S. markets. In order to open an international account, you must not be a U.S. citizen or resident and must reside in one of the dozen or so authorized countries listed on their website. In addition to the standard account application, international traders will also have to submit a copy of their valid passport, a W-8BEN Form, and Firstrade’s online service agreement form.

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Firstrade Account Types

You will find that Firstrade offers the same standard account types that you would find with most U.S. brokers, including taxable accounts, individual retirement accounts (IRA), business accounts, and custodial accounts.


FirstTrade account types


Taxable Account

Firstrade’s most popular account is the standard taxable brokerage account. Many individuals and families use this account type to invest extra money and savings which have already been taxed. Firstrade lets you buy stocks, ETFs, options, mutual funds, bonds, and CDs with your taxable account. Any realized capital gains or dividends received from this account are will be subject to taxes.

Traditional IRA

When it comes to saving and investing for retirement, IRAs are a popular choice. Firstrade offers both traditional and Roth IRA accounts. The traditional IRA account is funded with pre-tax income, meaning that you will report less taxable income to the IRS in any year where you make an IRA contribution. You can invest your contributions as you wish using all the same securities available in a taxable account, and it will grow tax-free. However, once you are ready to withdraw money from your traditional IRA, you will owe taxes on the full amount – both the contributions and any capital gains.

Roth IRA

A Roth IRA has all the same investing options as the traditional IRA, however it is funded with income that you’ve already paid taxes on, which means you won’t realize any tax savings when you make contributions. On the other hand, the nice thing about a Roth IRA is that once you are ready to withdraw your money, you won’t owe any taxes on it – neither the contributions (since this was after-tax) nor the capital gains. Both the traditional and Roth IRAs have some sweet tax advantages to help you reach your retirement goals faster, which is also why the U.S. government limits the amount you can contribute in any year – currently $6,000 in 2019.

Business Accounts

Firstrade also offers the flexibility to setup a business account for a variety of different types of business, partnerships, and clubs. These account types come with all the features and options of individual accounts, but allow for multiple owners or partners to take investing actions in the account. This is a popular account option for investment clubs or businesses that have investments.

Custodial Accounts

A custodial account is an investing account that an adult can setup for the benefit of a child or other minor once they reach the age of 18. When you setup your Firstrade custodial account you dictate who will be the custodian (usually you, the person opening the account) and that person will have full discretion over managing the account until the minor has reached adulthood, after which they will have full legal ownership of the account and its assets. Custodial accounts come with some tax advantages, such that the first $1,000 in investment income is not taxed, and the next $1,000 is taxed at the minor’s tax rate until they reach adulthood, at which point all income is taxed at their tax rate.

Account Transfer Fee Reimbursement

If you are seriously considering opening one of the various account types we discussed at Firstrade, we though you should also know that they have a sweet promotion right now for anyone who transfers their existing brokerage account to Firstrade. Most brokers will charge you a transfer fee for partial or full outgoing account transfers, and Firstrade will reimburse this fee (up to $200) when you transfer an account to them.

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