In the last few years the number of brokers offering commission free ETF (exchange traded funds) has quadrupled. Even the mighty Charles Schwab has jumped on the band wagon.
What started off as a promotion has propagated into the new norm, but whilst the headlines free ETF trades sound impressive, often what lies beneath falls well short of the mark, sometimes you’re limited to just 11 ETFs.
To help with the confusion we’ve looked at all the brokers that offer free ETFs to establish which one truly offers the lowest ETF commissions.
|How many commission-free ETFs available?
||From what ETF issuers?||Commission-free ETFs selected by an unbiased third party?|
|TD Ameritrade||100+||iShares, Powershares, SPDR’,Vanguard and more||Yes, Selected by Morningstar|
|Scottrade||15||Scottrade||Yes, Selected by Morningstar|
And the Winner is?
You can clearly see from the table above that the clear winner is TD Ameritrade, they offer by far the most free ETFs with over a 100 in all. That’s nearly double their nearest rival Vanguard, who only offer free trades on their own managed ETFs.
TD Amritrade ETFs are available from a number of suppliers including iShares, Vanguard and Powershares so you’re not limited to one provider like most other brokers.
As well as offering over 100 commission free ETFs, TD Ameritrade also provide one of the best trading platforms around, far and away above Vanguards platform which is totally inadequate for most traders needs.
Add to that great customer service and no annual management fee for their IRAs and you’ll see it’s more than possible to trade with TD Ameritrade without paying any commissions at all.
Yes it should be said that if you want to trade an ETF that’s not on the list their fee is rather high at $9.99, however all the funds that make the list are recommended by Morningstar so you’ll always find the most popular funds available.
Also this offer is subject to you holding the ETF for a minimum of 30 days, if you sell the fund before 30 days you’ll be charged the standard flat fee of $9.99, but since most traders buy ETFs to hold this shouldn’t be a problem.
TD Ameritrade is one of our favorite brokers here; they have an exceptional trading platform backed up with excellent customer service.
Yes they’re not the cheapest broker for standard stock trades but if you’re looking to trade ETFs they are by far the best broker to use. Like I said it’s more than possible to trade ETFs without having to pay a single penny in commissions.
One or two other brokers in this list offer free ETFs on a strictly limited basis, sometimes limited to their own managed ETFs or just a small token number of funds. TD Ameritrade has really gone to town supplying funds from a number of top providers that are recommended by a third party.
To open an account with TD Ameritrade you need $0.00 for a standard account and $2000 for a margin account.