What Are IRA Commission Free Trades & How Can I Benefit From Them?


The purpose of opening an IRA account is to save as much money as possible and retire with enough to live on. If you open an IRA account, there will naturally be fees from the bank in charge of managing and maintaining the account. As you search for an IRA account to open, you want to minimize your fees so that you can maximize your long-term savings. One way to do this is to secure commission-free trades on your account. When you understand how these trades work and what your options are, it’s much easier to choose the best bank for your IRA account.

What are commission-free trades?

Commission-free trades are trades that allow you to invest in ETFs without any additional fees added to them. An ETF is a special type of investment available to IRA holders. It stands for “exchange traded fund” and is very similar to a traditional stock. ETFs are available in versions of stocks, bonds, and even commodities like farm foods. ETFs became popular in the late 1990s and are now traded by millions of people all over the world.

When you invest in an ETF, you can help generate profit by eliminating the commission. This allows you to spread your investments across multiple ETF accounts and not siphon money to various fees. Once an ETF is purchased, many banks require you to keep it for at least 30 days before trading again. If you decide to give it up before the 30 days, you could face a penalty or fine that comes out of your account.

IRA Trading & Commissions

Who offers commission-free trades?

To help attract new IRA customers, many banks and financial companies now offer commission-free trades. The commission-free policy varies by company, and that’s why it’s ideal to use a comparison tool to see different options from different companies.

Some companies may limit the amount of commission-free trades you can complete. This number can range anywhere from 100 free trades to 1,000. For example, OptionsHouse offers 100 free commission-free trades within the first 60 days of opening an account. This is an ideal way to start your ETF investments without any extra fees. Companies may only offer access to a specific amount of ETFs as well. This is why it’s important to research and see what types of ETFs you may be interested in for investing purposes.

What other fees are associated with commission-free trades?

Even though the initial trade and acquisition of an ETF is commission-free, there may be some fees that are collected. Banks and financial companies make money on ETFs by applying an expense ratio. This is typically a small percentage that is taken directly from the profits that you earn on an ETF. For example, if you had an ETF that earned $300 in a single year, the bank might collect $2.04 based on a ratio of .68%. The ratios vary and are typically quoted low. This is another factor to consider when comparing various companies.

Once your commission-free trade limit has passed, there may be ways to earn it back so you do not have to pay additional commission fees. For example, you may have the ability to deposit a minimum amount into your account and receive additional free trades. Looking into these benefits can make a huge difference on your cost savings over the years.

Are there other ways to cut fees in my IRA account?

ETFs and commission-free trading are not the only ways to cut fees from your account. If you are interested in investing in mutual funds, you have the ability to sign up for accounts with additional benefits. For example, some companies offer the elimination of transaction fees on specific mutual funds. This allows you to invest more into the savings, especially if you are only depositing small amounts at a time. The fees can quickly add up, and eliminating them is the best option.

Interested in commission-free trading? Compare the top IRA providers to find the most ideal option for your retirement.

Advertising Disclosure

This site is a free online resource that strives to offer helpful content and comparison features to its visitors. Please be advised that the operator of this site accepts advertising compensation from companies that appear on the site, and such compensation impacts the location and order in which the companies (and/or their products) are presented, and in some cases may also impact the rating that is assigned to them. To the extent that ratings appear on this site, such rating is determined by our subjective opinion and based on a methodology that aggregates our analysis of brand market share and reputation, each brand's conversion rates, compensation paid to us and general consumer interest. Company listings on this page DO NOT imply endorsement. Except as expressly set forth in our Terms of Use, all representations and warranties regarding the information presented on this page are disclaimed. The information, including pricing, which appears on this site is subject to change at any time.

Top 5 IRA Providers