Exchange-traded funds have become increasingly popular as a way to help investors build an inexpensive and diversified portfolio. These funds do not have any trading costs associated with them, making them appealing to the masses. Whether you’re new to trading ETFs, or you’re a highly experienced investor, you might want to consider commission-free ETFs either way when building your portfolio.
Here’s a relatively simple guide on how to trade ETFs without commission with some of the more trusted names in the financial industry.
TD Ameritrade (NASDAQ: AMTD) offers users access to over 550 commission-free ETFs, and these ETFs are commission free for 60 days with qualifying deposit.
Through Morningstar, TDA offers research and ratings for each ETF, as well as a commission-free ETF list. However, the funds on the ETF list are non-marginable for the first 30 days, or a short-term trading fee of $19.99 may ensue. There is also no minimum to open an account with TD Ameritrade.
Charles Schwab (NYSE: SCHW) has over 500 ETFs commission free. When investing with Schwab, users can choose from Schwab’s own funds or selections from Guggenheim, PowerShares, State Street Global Advisors and other providers. Unlike TD Ameritrade and several other companies, Schwab doesn't charge any early redemption fees for their users.
Most brokerage firms and companies will offer their own ETFs without commission fees, but rarely do they let buyers do this for the ETFs at competing firms. It’s important to keep in mind the ETFs at Schwab are higher for other firms. For example, if you have an IRA at Schwab but you frequently trade Vanguard ETFs, your trading costs will be higher than if you’re selling Schwab ETFs.
E*Trade (NASDAQ: ETFC) offers over 250 commission-free ETFs, from Wisdom Tree Investments, Deutsche Bank and others. Similar to TD, E*Trade will require you to wait 30 days before you’re able to sell the ETF.
Fidelity investments offers 300 commission-free trades with a qualifying deposit. There is no account minimum for starting an account, and their customer service reputation is top notch. Overall, Fidelity offers 503 commission-free ETFs as of June 3.
Fidelity has strong mutual funds, low commissions and an easy-to-use platform customizable for each trader. This is ideal for retirement investors and active traders, looking for premium research, low fees and fund selection.
MoneyLion is a personal finance app that uses machine learning to recommend financial products to their users. Users can create their own diversified portfolio across domestic and international stocks and bonds.
These are some of our favorite resources for ETF commission-free trading. Eighty-seven percent of financial advisers use ETFs, or recommend ETFS to their clients, according to Bankrate.com.
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