Update: TradeKing no longer allows for the purchase of fractional shares with their dividend reinvestment program. In addition, other brokerage firms have begun offering entirely commission-free trades on several ETFs. For most investors these days, I’d suggest using a different firm rather than TradeKing. (See here for why we’ve moved our money to Vanguard.)
I’m a big believer that one of the most reliable ways to improve your investment returns is to reduce your costs. Exchange Traded Funds (ETFs) purchased through TradeKing are an extremely low-cost way to invest.
[Background information: ETFs are essentially index funds that trade like regular stocks. In many cases, they have even lower expense ratios than traditional index funds.]
When buying ETFs, you’ll have to pay a commission for each purchase. However, at TradeKing, the commission per purchase is only $4.95, so if you plan to own the investment for an extended period–or if you’re investing a large sum of money–the super-low ETF expense ratios should more than make up for the small commission.
Free Dividend Reinvestment
One important point is that TradeKing also offers free dividend reinvestment. For somebody buying ETFs in an IRA, this is important. Better to have the cash reinvested right away rather than having it wait around.
How is TradeKing’s Customer Service?
My wife and I have only had a few interactions with them as of yet. But the answer is definitely “so far, so good.” I’ve contacted them via email twice and received replies very promptly. My wife has also called once in regard to her own IRA, and she reports that the service was great. Polite and helpful customer service rep and very short wait time.
In Summary
There’s no way I can promise you that you’ll be happy with them. All I can say is that I’ve been very pleased so far.
Opening an Account
Go to this page to open an account. The application process takes a few minutes, but it’s very straightforward. (The second page is where you’ll designate the type of account you want to open–regular brokerage account, traditional IRA, Roth IRA, etc.)
Comments on this entry are closed.