Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It may not have not been reviewed, commissioned or otherwise endorsed by any of our network partners or the Investment company.
Updated on Thursday, April 4, 2019
USAA is known for their great workplace and customer service. One in four employees are veterans or military spouses. These are attractive traits to draw in customers who are military service members.
USAA offers a slew of different products, including car, health and homeowners insurance. They also have checking accounts, mortgages and personal loans available as well, though this review will focus on the company’s investing products. While most of USAA’s offerings target military service members and their families, anyone can open an investment account.
Who should consider USAA Investments?
Online brokers are a great way to let you manage your money, whether you’re new to investing or you’ve been handling them for years.
If you’re already a USAA member, enlisting them to be your online broker is enticing. Keeping your money all in one place can be a convenient option, and you can talk to real, live people when you have investment questions or concerns.
If you’re looking for a specific kind of account, such as a custodial or SIMPLE IRA, you can find it at USAA. Their long list of various account types can be a big draw if you need something in particular.
USAA Investments fees and features
|Stock trading fees|
|Amount minimum to open account|
|Account fees (annual, transfer, inactivity)|
|Mobile app||iOS, Android|
|Customer support||Phone, 4 branch locations|
Strengths of USAA Investments
Extensive choice for different accounts: You’ve got your choice of different accounts to choose from when signing up for a USAA brokerage account. If you’re a business owner and need an SEP or SIMPLE IRA (Savings Incentive Match Plan for Employees), you can take your pick. If you need a Custodial IRA or 529 Plan, they’re available. There’s also joint accounts, trusts and conservatorship accounts.
Great customer service: While a machine answers your phone call, it doesn’t take much time or effort to get to a human representative. Whether you have a question about certain stock performance or less-risky exchange-traded funds (ETFs), the easy customer experience spans across USAA’s product offerings.
A robo-advisor option is available: To complete with robo-advisor companies, USAA offers their Digital Investment Advisor. If you like the idea of a robo-advisor and a brokerage in one, USAA has the best of both worlds for you. Keep in mind that the annual fee for the robo-advisor is 0.50% a year — that’s double other leading robo-advisors like Wealthfront or Betterment.
Drawbacks of USAA Investments
High trading costs: $8.95 per trade is pricey. Other companies charge anywhere from $4.95 to $6.95 per trade. This could deter new investors from making any transactions and active investors might find this too costly for their taste.
Lots of fees: There’s a fee for almost everything. A transfer fee, whether partial or full, can range from $20 to $70. If you aren’t active in your account for a year, you’ll get charged $10 and then your account will close. Make sure you fully understand the rates and fees, or you might get stuck paying way more than you expected.
Restricted expansion to other products: While USAA Investments is open to the general public, it’s hard to get access to their other products — such as health insurance or loans — unless you’re in the military or related to a service member.
Limited info available online: If you have specific questions or concerns regarding your investment account, you may have trouble tracking down answers on USAA’s website. Though many competitors have detailed FAQs to help consumers, you may need to speak with a customer service rep to find answers at USAA.
Is USAA Investments safe?
Investing in any form carries risk. As you look into different investment accounts, it’s important to see if a company has security measures in place in case fraud or other theft takes place.
USAA doesn’t have a policy in place that ensures members get their money back in the event of fraud, identity theft or other malicious activity. The most you can do is call to report suspicious activity, but there’s no guarantee you’ll get a refund for the lost cash. However, USAA is a member of the SIPC — Securities Investor Protection Corporation — which means your money is insured if the company goes under.
For current USAA members, having your investments under the same umbrella as some other products you use could be a useful option. But for those who don’t serve in the military or those who aren’t related to servicemembers, you may find better options elsewhere.
A high account minimum with high trading costs means you can find less-expensive options elsewhere.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.