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TradeKing vs. Fidelity: Discount Brokers for IRA Accounts

By Jordan Wathen - Mar 29, 2017 at 1:35PM

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Ready to open an IRA? See how popular discount brokers TradeKing and Fidelity compare for retirement investors.

Individual retirement accounts are an excellent way to save for retirement, but before you open an IRA account, you should know what you're getting into. Brokers vary tremendously when it comes to commissions, fees, and even the investment choices they can offer you. 

Let's compare how TradeKing and Fidelity stack up on fees and features that are important to retirement investors.

Commission prices

What you pay to make a trade isn't the only thing to consider when picking a broker, but what you pay to make a trade does impact your total returns. Here's how Fidelity and TradeKing compare on commissions.

Brokerage

Stocks and ETFs

Stock Options

Mutual Funds

TradeKing

$4.95 per trade

$4.95 per trade + $0.65 per contract

$9.95 per purchase

Fidelity

$4.95 per trade

$4.95 per trade + $0.65 per contract

$49.95 per purchase

Data source: company websites.

As with anything, pricing can vary. Keep in mind that upfront bonuses and other special offers for IRAs can lower your total trading costs. In addition, many brokers offer mutual funds and ETFs that you can buy or sell fee-free, further reducing costs for fund investors. 

Mutual funds, ETFs, and commission-free choices

Whereas many brokers tend to offer roughly similar access to the same stock or options markets, brokers frequently offer very different choices when it comes to funds. This table compares TradeKing and Fidelity on fund selection:

Brokerage

Total Mutual Funds

No-Load, No-Transaction-Fee Funds (NTF)

Commission-Free ETFs

TradeKing

More than 12,100

None

None

Fidelity

More than 11,500

More than 3,600

More than 90 (Fidelity and iShares)

Data sources: Barron's, company websites, and representatives.

Depending on which funds you'd like to hold in your portfolio, either broker could be a good choice. TradeKing doesn't offer any fee-free choices, but its standard mutual fund commissions are lower than Fidelity's standard prices. On the other hand, if your favorite funds make the cut on Fidelity's fee-free list, it may win you over for the ability to make routine investments without paying a commission on each transaction.

Minimum deposit requirement for IRAs

You don't need to be rich to start saving to become rich. TradeKing and Fidelity are accessible to everyone, given both offer no-minimum individual retirement accounts. This can be an advantage for savers who want to start small and build up their balances with routine deposits.

View of the NYSE, looking up

Image source: Getty Images.

International stocks and ADRs

Not all brokers offer the same access to invest in companies that are domiciled in, or trade on, foreign markets. Here's how Fidelity and TradeKing compare when it comes to international investments.

Type of Investment

TradeKing

Fidelity

American depositary receipts (ADRs)

Yes

Yes

Stocks traded on international stock markets

No

Yes (25+ markets)

Mutual funds and ETFs of foreign stocks

Yes

Yes

Data source: company websites.

When it comes to investing internationally, how you do it matters. While many of the world's largest companies can be traded on an American exchange, many smaller companies are listed only on their domestic markets. Some brokers, such as Fidelity, can route trades overseas. Others, such as TradeKing, limit their customers to ADRs listed in the United States.

If it's important to you that you can trade on international exchanges, you'll have to select from a smaller pool of discount brokers than do people who simply want to invest domestically. 

Mobile app reviews

You can check your account and make trades from your mobile phone or tablet from anywhere around the world. Here's how each broker's users and customers rated their mobile trading apps, as of Feb. 23, 2017.

Brokerage

Apple App Store

Google Play

TradeKing

1.6 stars

4.1 stars

Fidelity

4.5 stars

4.3 stars

Data source: relevant app stores.

Fees on IRA accounts

Fees vary across the industry, but two fees are more common than others. Maintenance fees are those you pay just for having an IRA account. Inactivity fees are charges that brokers assess on accounts that don't meet their requirements for trading activity.

Many of these fees are avoidable. TradeKing has an annual inactivity fee of $50, but you can avoid it by making at least one trade per year, or maintaining a balance of $2,500 or more. Fidelity doesn't charge either type of fee for Roth or traditional IRAs. 

TradeKing vs. Fidelity for an IRA

Depending on how you invest, either broker could be a good fit for your portfolio. Fund investors and those who want to invest overseas may prefer Fidelity's fee-free fund assortment and access to 25 international exchanges. On the other hand, funds that aren't on Fidelity's free list are less expensive to buy at TradeKing than Fidelity, and it has slightly more funds. Otherwise, both offer similar commissions for stocks and ETFs, so some investors might not find the differences all that meaningful to how they prefer to invest.

To be clear, The Motley Fool does not endorse any particular brokerage, but we can help you find one that's a good fit for you. Visit Fool.com's IRA Center to compare several brokers all on one page, and see if you qualify for any special offers for opening a new account. 

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