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CloseUSAA Review
Active and retired members of the military will feel right at home here, but day traders might run away from the high commission fees.
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Are you an active member or veteran of the US armed services?
United Services Automobile Association (USAA) might be perfect for you. USAA is a financial services group that offers investing, banking, and insurance services through its subsidiary companies.
These services are meant for active and retired members of the United States Armed Forces, although the brokerage services are available to the general public. The company was founded nearly 100 years ago in 1922, and is headquartered in San Antonio, Texas.
USAA members can manage their insurance, mortgage, banking, and investing needs all in one place. Is USAA just what you’re looking for?
Let’s dive in. 🥽
Fast Facts
- Account Minimum: $500
- Fees: Stocks and ETFs are $8.95; Options are $8.75 + $0.75 per contract
- Best For: Current and former US military members
- Highlight: No transaction fee mutual funds
Rating
- Usability: 4/10
- Research and Education: 9/10
- Customer Service & Help: 7/10
- Commissions & Fees: 2/10
- Tools & Resources: 6/10
- Overall: 5/10
Investor Warning: Options are considered speculative investment strategies. Option trading entails a high level of risk and is not suitable for all investors. Certain requirements must be met to be approved for option trading. Those trading options (both Buyers and Sellers) should be familiar with the theory, strategy, pricing of options and related risk factors.
USAA Investment Acquired by Charles Schwab – What Does This Mean? 🧐
Charles Schwab acquired USAA Investment on July 26, 2019, and USAA accounts will all be transferred to Charles Schwab.
The transition was bound to happened in 2020. USAA claimed that this transition would be smooth and that users would not suffer any inconvenience.
USAA Overview and Summary
USAA most important aspects:
- Charles Schwab acquired USAA. Great changes came to USAA.
- USAA is made for members of the military. It provides financial services like insurance, investing, and banking.
- A full range of offerings is combined with very high commission fees.
- The brokerage offers about 3500 mutual funds with no commission fees.
- The platform is basic but has notable research resources.
- USAA offers a great education for beginner and intermediate investors. There are also courses made by Morningstar, which cover a wide range of topics.
- Active traders will find many better alternatives.
Is USAA Right for You? 🕵️♂️
USAA is a company that offers insurance, banking, and brokerage services to its clients. The company mostly deals with active and retired military personnel and their families, but the brokerage service is also available to civilians.
That being said, if you are an active or retired member of the military, and like to have your bank, insurance company, and broker in one place, then USAA is made specifically for you.
Investors who are interested in mutual funds might also like USAA since they offer about 3500 mutual funds with no transaction fees. Active traders will most likely choose one of the better alternatives though. USAA has very high commissions and a subpar platform for day traders.
USAA Compared
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Military/casual mutual funds investors
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No transaction fee mutual funds
Great retirement planning tools
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Great retirement planning tools
Value-based investing
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$5 bonus¹
Commissions
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Account minimum
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$100
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Minimum initial deposit
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Best for
Military/casual mutual funds investors
Casual investors
New investors
Highlight
No transaction fee mutual funds
Great retirement planning tools
Value-based investing
Promotion
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$5 bonus¹
What You Can Trade with USAA 🤔
USAA offers a full range of offerings from stocks and ETFs to fixed income investments and mutual funds. The brokerage also offers its users corporate and municipal bonds, as well as US Treasury bonds.
Users have to place orders for bonds and multi-leg options by phone. Also, users with margin accounts can sell shorts.
Clients can opt for USAA Managed Portfolio (UMP). If you choose this service, USAA’s experts will frequently recommend multiple portfolio models for free. If you want a more complete service, you can have the brokerage’s experts rebalance, monitor, and relocate your portfolio, but that incurs a fee.
This service requires a $25.000 minimum balance on your account. The investment managers will strive to build up a portfolio that’s diversified and stable.
If the account minimum seems too high, or you want a more moderate service, you can take a look at the robo-advisor. This service requires a $2.000 account minimum.
Taking a Look at the USAA Trading Platform
Desktop Platform 🖥️
The USAA trading platform is fairly straightforward and has a broad array of features and data. Placing orders is effortless, as the trade ticket is omnipresent. You can place orders from just about any screen on the platform.
Usability 👨🔧
USAA’s trading platform is very intuitive and offers a good selection of resources, especially when it comes to research and education. A large amount of content makes the platform a bit difficult to navigate in the beginning, but it becomes fairly simple once you figure out where everything is.
Checking current positions and historical activity is not difficult with the platform’s well-designed new dashboard. Making transfers, managing dividends, and accessing tax documents has also been made easy. The overall design is good but there are no customization capabilities.
Limitations of USAA’s Platform ⚠
Users have access to just about all investment types, but USAA’s platform does not provide any basket-trading and order-staging capabilities. Users can not place advanced conditional orders.
Day traders who like to have multiple open tabs with real-time data will not enjoy this platform though, as you can only have a single window or data set open at any given moment.
The platform gets a bit convoluted when you access the “News & Research” bar. The information updates slowly and the interface is far more complicated than the rest of the platform. Therefore, USAA’s platform is not for quick trading.
There is little streaming data, and the information on the platform must be manually refreshed (although it’s updated in real-time). Order routing is also lacking. There’s no insurance you’ll get the best price for your trades, although, users can pay USAA to route their orders to particular venues.
Portfolio Analysis Capabilities 🛠️
Users of the platform have access to a bundle of solid, mid-tier portfolio analysis tools. You can quickly view your balances, daily losses and gains, and current positions. Like all data on the platform, balances, and history need to be manually refreshed even though they update in real-time.
If a client uses USAA Managed Account service, they have access to more guidance, trading advice, and data. This is the case for both fully-managed accounts and robo-managed ones.
Mobile App 📱
The mobile app is also straightforward and user-friendly but it has fewer capabilities than the desktop version. Viewing basic account info and trading ETFs and stocks is quick and smooth.
Users have to open the “News and Research” bar to gain access to use the stock screener or to view watchlist and detailed quote information.
Alternatively, you can access this data by clicking on a pop-up box of the ticker you’re interested in.
Unlike the app’s previous version, there are no advanced charting tools in the current version. Trading directly from the Tools & Calculators, Market Insights, and News & Research pages is a bit bothersome as they all have their own trading tickets.
Going back and forth from these pages to the dashboard requires you to log in again.
The mobile app is great if you want to monitor your account’s activity and make basic trades but the latest patch is slightly buggy and unpractical. It is better to do the bulk of your trading and analyzing on the desktop app if you are a USAA client.
All in all, the app has good features but it doesn’t compare well with the best trading apps currently on the market.
How is USAA’s Pricing? 💰
USAA offers a few no-commission securities but the commissions are generally very high. However, about 3500 no transaction fee mutual funds are offered by the brokerage, and the account minimum is pretty low.
Stocks, ETFs, and Options 📈
Some ETFs have no commissions but other ETFs and stocks are burdened with an $8.95 commission.
However, if the stock is priced at less than $1, only a $0.1 commission fee is incurred. Options trades are $8.75 plus $0.75 per contract. International stocks have a $70 fee and have to be placed by phone.
If your stocks trades are assisted by USAA’s advisors, the commission is $50 ($0.1 if the stock is priced under $1). Representative assisted options trades are $ 25 plus $0.75 per contract.
Traders interested in these investment types should probably look for better alternatives among the best online stock brokers.
No Transaction Fee Mutual Funds – A Great Selection
Stocks and ETFs may be practically untradeable for some active traders because of their high commissions but mutual funds investors will probably sing a different tune. USAA offers around 3500 zero-fee mutual funds, which is a very competitive selection. Aside from the 3500 free ones, mutual funds have $45 transaction fees.
| Investment Type | Trading Fee |
|---|---|
| Stocks | $8.95 |
| Stocks Under $1 | $0.1 |
| ETFs | $8.95 |
| $8.95 | $8.75 + $0.75 per contract |
| Mutual Funds | $45 |
| Bonds | $45 |
Other Fees 💸
The account minimum has been lowered from $3000 to the current $500. If a user’s account balance drops below $100 and is inactive for 12 months, it is charged with a $10 fee and closed.
Other costs are the usual fees you can come across in most brokerages. Closing an IRA will cost you $35.
Customer Support ☎️
USAA’s customer support has a good reputation among well-known brokerages. Reaching the company’s representatives doesn’t take long, whether you are using your phone or the platform’s online chat feature. The online chat is a better option if you have a general question, as the response time is usually short.
The phone service representatives can answer more difficult questions from 8 AM to 5 PM on working days. The phone service doesn’t work duri ng the weekends. Live brokers can also be reached by phone but they are fewer in number than the general call center staff, so the waiting time is a bit longer.
Trading Education at USAA 👨🏫
USAA’s website is enriched by Morningstar’s articles and courses. Morningstar education series has great lessons for beginner and intermediate investors on topics like portfolio management, investment strategies, portfolio withdrawal mistakes, etc.
You can also take a look at USAA Educational Foundation, which is a non-profit funded by the brokerage. They offer students a plethora of articles, educational resources, graphs, and video lessons about investing, retirement, and other, more general financial concepts.
USAA’s retirement center provides tools and articles that can help users plan their retirement.
Research & News 📰
USAA stands out among the competition with its offer of research tools. Both platforms have a powerful ETF and stock screener. Also, Morningstar’s mutual fund screener is built into the desktop platform.
By clicking on a ticker of their choice, users can access useful related data like watchlists and analyst reports. The “News & Research” section is handy as you can search for the news you need by typing relevant keywords in the search bar.
What USAA is Great At 🥇
Active and retired military personnel can have their broker, banker, and insurance agent under one roof if they choose to do business with USAA. Members of the Armed Forces are the company’s target audience, after all.
The brokerage has a great offering of mutual funds. There are about 3500 no transaction fee mutual funds currently available to users. This selection will certainly catch the eye of mutual funds investors. However, there might be better alternatives if you want to build a portfolio full of quality mutual funds.
💡 Did you know? USAA’s research capabilities and educational resources are augmented by Morningstar’s great content. Compared to the competition, USAA’s platform isn’t rich with features, but the research tools are comprehensive and powerful.
Investors can also get direct help and advice from the company’s account managers, but that will incur very high commissions.
New and intermediate investors can really benefit from the educational content on USAA’s websites. Students can learn from a plentitude of articles and videos that USAA provides, but also from Morningstar’s fantastic educational program.
The commissions on stocks, ETFs, and options are really high (except for the few commission-free ETFs) but mutual funds are free and the minimum account balance is only $500, which is a step forward from the $3000 minimum they had last year.
Where USAA Falls Short 🚧
If you trade stocks, ETFs, or options on USAA’s platform, your profits will likely get obliterated. USAA has some of the highest commissions in the industry for these investment types.
The company’s platform isn’t great for day trading as it is slow compared to its competitors’ platforms. Basically, active traders will find a lot of better alternatives.
Wrapping It Up 📝
USAA is a company made for the members of the military and it provides them with services for all their financial needs, including investing. Civilians can also trade with USAA, but the only noteworthy offer on the platform is the huge selection of no transaction fee mutual funds.
This makes USAA a great place for the members of the Armed Forces and some casual investors, but active traders and even mutual funds investors will likely find a platform that better suits them.
USAA: FAQs
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Who Can Have USAA Account?
USAA is meant to be used by military or ex-military personnel and their family members. Regular traders can also be a part of the USAA but they can only make use of the platform's vast amount of no-transaction-fee mutual funds and a low account minimum.
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Does USAA Charge Fees?
Yes, they do and the commissions are very high.
- ETF's and stocks have an $8.95 commission (if the stock is priced at less than $1, only a $0.1 will be charged)
- Options trades are $8.75 plus $0.75 per contract
- International stocks have a $70 fee
- Representative assisted options trades are $ 25 plus $0.75
- Mutual funds have $45 transaction fees
A good thing about USAA is that the account minimum has been lowered from $3,000 to the current $500 but if your account is inactive for one year and its balance drops under $100 you will be charged with a $10 fee per month and your account will eventually be closed.
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Does USAA Offer a Good Insurance Value?
USAA is considered to be a good insurance company based on customer reviews, insurance quotes, and ratings from third-party organizations. The company has a lot of loyal customers who praise their low prices and excellent customer service. But some customers complain about the slow claims process and slow response time.
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Can You Become a USAA Member Without a Military Background?
Yes, you can. If you’re not a full-time member of the military, you may be able to qualify for membership in the USAA if you have an active military member or veteran in your family.
USAA and the Competition
See how USAA compares to the top investing platforms by reading one of the reviews below.
All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.
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