Until recently, I used Vanguard for both my traditional and Roth IRAs. And, to be honest, I was quite happy with them. No fees, low-cost index funds, good customer service.
But I recently switched to TradeKing. Why?
Because TradeKing Costs Less
Just like Vanguard, TradeKing does not have any ongoing account maintenance fees. And, with TradeKing, you’ll be buying the ETF versions of Vanguard’s funds. This is significant because the ETF versions of their funds have even lower expense ratios than their normal share classes.
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 hold the funds for an extended period–or if you’re investing a large sum of money–the lower 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 hugely important. Better to have the cash reinvested right away rather than having it wait around. Also, it’s worth noting that TradeKing allows for purchases of fractional shares in their Dividend Reinvestment program. Other brokers (Zecco, for instance) do not.
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
As you know if you’ve been reading this blog for long, I’m a big believer that one of the most reliable ways to improve your investment return is to reduce your costs. And it appears to me that Vanguard ETFs purchased through TradeKing are an extremely low-cost way to invest. Of course, 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.)
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