Charles Schwab has announced that on October 7th they will remove commissions for stocks, ETFs and options listed on U.S. or Canadian exchanges. This coincides with the latest book release by Founder & Chairman Charles Scwahb titled ‘Invested’. The Charles Schwab pricing structure will be as follows:
Fideilty has gone commission free now as well.
Will fidelity follow?
I’m waiting on it. Fingers crossed.
Yup, they did.
Great news. I was starting to get really annoyed with webull platform. I’ll keep my robinhood but will slowly pull money from my webull to robinhood and schwab.
Does Schwab or TD Ameritrade have any relationship bonuses like BoA Rewards?
Schwab gives $100 off the AF of the Schwab Amex Platinum once you have $250k in assets with them, or $200 off once you have $1mm, which allows conversion of MR points into cash at a rate of 1 point:1.25 cents. Even if someone has the Blue Business Plus, the BofA Premium Rewards has a better earn rate for flat cash with a lower overall AF (2.625% vs 2.5% for Schwab Plat + BBP). The Schwab Platinum will be better for frequent travelers, though.
Otherwise, no real benefits to my knowledge.
IMO, the Amex setup (SP+BBP) is better once you get the $100 off. That leaves the difference between the two systems at $350 and you have $500 of credits and better benefits to close that gap. The optionality of 2.5% cash vs 3-4% travel on base spend is pretty compelling. You only give up $120 on 100k of spend on cash with huge upside on travel.
Technically you’d have $400 to close the gap because the Premium Rewards has a hundred of incidental airline reimbursement of its own. Undoubtedly the Plat has better travel protections, but if you’re a work-at-homer like myself and almost never travel or use Uber, the PR will still come out on top.
Both are good setups, though. Just depends on what you value more.
Interesting, wonder what will happen at other players, like Merrill or Fidelity. But yeah, the sign-up bonuses are probably going away.
One of Merrill’s VPs was interviewed by Kiplinger a couple months back, and something like three quarters of their stock/ETF trades are already free due to Preferred Rewards. I don’t see them changing anything. If they do, they might either go unlimited free trades for any member at any level of Preferred Rewards or offer free trades for everyone and increase the basis point discount for Guided Investing.
Schwab was already great, but this is even better
I feel like this was only a matter of time with Robin Hood around.
That one is rather niche.
Seriously consider moving out of Robinhood. Though, gotta wait and see how it plays out with day trading.
I feel like this makes their checking plus brokerage account combo even better 🙂
This is big. Schwab is great… how will they make any money?
Through funds and market makers.
Float interest on cash balances
selling order flow like robinhood
Schwab only misses out about $100 million each quarter on fees. It’s about 7% of their revenue only. Last time they reduced fees, they got over a billion worth of assets to manage in addition so this move is likely going to help them get to manage more assets under them and probably more people to keep their money/stock with them which they will use to make money similar to other financial institutions probably.
Easily. It was only 7% of their revenue according to this. https://www.cnbc.com/2019/10/01/charles-schwab-is-eliminating-online-commissions-for-trading-in-us-stocks-and-etfs.html
What they did was kick the chair out from under their rivals. That same article says trading commissions make up 25% of yearly revenue for TD Ameritrade and 16% for ETrade.
Other products. They still have their “Global” account that allows trading on European and Asian markets, where they haven’t removed fees yet (and converting between currencies in their Global account incurs a 1% conversion fee).
TD Ameritrade has followed up! https://www.amtd.com/news-and-stories/press-releases/press-release-details/2019/The-Best-Just-Got-Better-TD-Ameritrade-Introduces-0-Commissions-for-Online-Stock-ETF-and-Option-Trades/default.aspx
Thanks, just posted