Many Brokers Now Offer No-Fee ETFs

May 19, 2011

Brokers make many mutual funds available to their account holders without transaction fees.  These no transaction fee (NTF) funds can be bought and sold without incurring trading costs. Exchange traded funds (ETFs) trade like stocks and most brokers charge a fee, either per share or per transaction, to buy and to sell a stock or an ETF, but commission-free ETFs are becoming more common.

Most brokers now offer no-fee ETFs, but the number and selection of these commission-free ETFs differs widely at each broker. Firstrade and Scottrade, for example, offer just 10 to 15 commission-free ETFs, respectively, while TD Ameritrade offers over 100. Schwab and Vanguard only allow investors to trade their own proprietary ETFs without trading fees, while TD Ameritrade offers ETFs from many popular providers such as iShares, Vanguard and SPDR.

TD Ameritrade, Etrade and Fidelity impose a redemption fee on these no-fee ETFs. If you sell a no-fee ETF within 30 days at TD Ameritrade, you’ll be charged $19.95. At Etrade, the fee varies from $15.99 to $19.99 based on how many stock trades an investor has made. At Fidelity, the short-term trading fee is $7.95.

The table, below, gives a rundown of ETF trading costs at some popular brokers, as well as the number and type of commission-free ETFs available.

Broker

Trading Cost

(market & limit orders)

Number of ‘No Fee’ ETFs

ETrade $7.99 80 ETFs from DBX, Global X, WisdomTree*
(as of December 2011)
Fidelity $7.95 65 iShares ETFs*
Firstrade $6.95 10 ETFs including ETFs from iShares, Vanguard, PowerShares
Muriel Siebert $14.95 up to 1,000 shares None
Schwab $8.95 100+ ETFs from SPDR, Guggenheim, PowerShares
Scottrade $7.00 15 Focus Morningstar ETFs
TD Ameritrade $9.99 100+ ETFs chosen by Morningstar, includes ETFs from iShares, SPDR, Vanguard.*
Vanguard $7 for the first 25 trades,
$20 for subsequent trades.**
64 Vanguard ETFs

*Etrade, Fidelity, and TD Ameritrade impose a redemption fee on all commission-free ETFs held less than 30 days.
** Vanguard has lower fees for Voyager/Flagship members.

(This post was updated in 2013 to include Fidelity’s expanded commission-free ETF list and Schwab’s OneSource ETFs and also December 2011 to include Etrade’s commission-free ETFs.)

Print Friendly, PDF & Email

Previous post:

Next post: