Posted by Chuck on October 9, 2019
Brokerage Bonuses

Published on October 9th, 2019 | by Chuck

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Schwab Brokerage Bonus up to $2,500; New or Existing Customers (Public Offer)

Update 10/9/19: Reader icemule1 was told that this $2,500 bonus offer was intended to run through November 18, 2019, but due to high demand it will likely be terminated next week.

The Offer

Direct Link to offer

  • Schwab brokerage has a bonus offer of up to $2,500 for new or existing customers who transfer over funds to the brokerage within 45 days of enrollment/opening.

New customers can signup on the landing page. Existing customers should call 877-673-7494 or visit the nearest branch to enroll.

Here are the bonus tiers:

  • $200 bonus for $50,000–$99,999 deposit
  • $300 bonus for $100,000–$249,999 deposit
  • $600 bonus for $250,000–$499,999 deposit
  • $1,200 bonus for $500,000–$999,999 deposit
  • $2,500 bonus for $1,000,000+ deposit

The Fine Print

  • Reader icemule1 was told that this $2,500 bonus offer is intended to run through November 18, 2019, though it may end sooner.
  • If you are not completely satisfied for any reason, at your request Charles Schwab & Co., Inc. (“Schwab”), Charles Schwab Bank (“Schwab Bank”), or another Schwab affiliate, as applicable, will refund any eligible fee related to your concern within the timeframes described below. Two kinds of “Fees” are eligible for this guarantee: (1) Program Fees” for the Schwab Private Client (“SPC”), Schwab Managed Portfolios (“SMP”), Schwab Intelligent Portfolios Premium (“SIP Premium”), and Managed Account Connection (“Connection”) investment advisory services sponsored by Schwab (together, the “Participating Services”); and (2) commissions and fees listed in the Charles Schwab Pricing Guide for Individual Investors (“Account Fees”) or the Charles Schwab Bank Pricing Guide. Program Fee refund requests must be received no later than the next calendar quarter after the Fee was charged. Account Fee refund requests must be received within one year of the date that the Fee was charged. The guarantee does not cover Program Fees for accounts managed by investment advisors who are not affiliated with Schwab or managed by Schwab‐affiliated advisors outside of the SPC, SMP, SIP Premium and Connection services. The guarantee is only available to current clients. Refunds will only be applied to the account charged and will be credited within approximately four weeks of a valid request. No other charges or expenses, and no market losses will be refunded. Other restrictions may apply. Schwab reserves the right to change or terminate the guarantee at any time.
  • Offer valid for Charles Schwab & Co. (“Schwab”) clients who make a qualifying net deposit into an eligible retail brokerage account within 45 days of enrollment. Net deposits are assets deposited into the enrolled account minus assets withdrawn from the account and transferred out of Schwab. Only outside assets new to Schwab qualify; assets transferred from affiliates other than Schwab Retirement Plan Services are excluded. Net deposits will be calculated as of the 45th day after enrollment and the Cash Bonus Award will be credited to the enrolled account within approximately one week.
  • For taxable accounts, excluding accounts pledged to Charles Schwab Bank, you must maintain the net deposit amount (less any market losses) at Schwab for at least one year or Schwab may charge back the Cash Bonus Award.
  • Schwab reserves the right to change the offer terms or terminate the offer at any time without notice and may decline requests to enroll in the offer at its discretion.
  • The offer does not apply to accounts managed by independent investment advisors, the Schwab Global Account™, ERISA-covered retirement plans, certain tax-qualified retirement plans and accounts, or education savings accounts.
  • The cash bonus, when combined with the value received from all other offers in the last 12 months, may not exceed $5,000 per household, as defined in the Charles Schwab Pricing Guide for Individual Investors.
  • The offer is not transferable, saleable, or valid in conjunction with other offers and is available to U.S. residents only.
  • Employees, contractors, or persons similarly associated with Schwab or a Schwab affiliate; their spouses; and employees of any securities regulatory organization or exchange are not eligible. Other restrictions may apply.
  • Consult with your tax advisor about the appropriate tax treatment for this offer and any tax implications associated with receipt before enrolling. Any related taxes are your responsibility. For taxable accounts, the Cash Bonus Award will be reported on your Form 1099-INT. IRS guidance may impact your ability to make more than one IRA to IRA rollover in a one-year period.

Our Verdict

A lot of people may be thinking of using Schwab now that they stopped charging commissions on trades (though, honestly, most brokerages don’t charge at this point). A lot of us already have a Schwab account; this offer works even for us, just be sure to call in and have the promo added to your account. If you are new to Schwab, you can just sign up at the direct link and it’ll be added automatically. Remember that you need to leave the funds there for a full year, else the bonus could be clawed back. And be careful to have everything transfer in kind so that it’s not a taxable event.

There’s a separate referral bonus for new Schwab members of up to $500. (I’m sure that offer won’t stack with this one.) That offer is better for the lower tiers while this offer is better for someone who wants to transfer $250k+. More notably, this offer works even for existing Schwab brokerage customers. We’ll add this to our list of Best Brokerage Bonuses. 

As an added bonus, reader icemule1 tells us that Schwab reimburses the fees charged by other brokerages to transfer the investments over, although they don’t advertise this benefit. I assume you need to call in to get that reimbursement; probably worth calling in beforehand to verify with a broker.

Hat tip to reader icemule1

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Dave @ MilesTalk

Do they 1099 all tiers? Only the $600+ Only $1,200?

qmc
qmc

You should expect a 1099 for all of it. div and int.

lilurbanachiever
lilurbanachiever

You do realize that all income should be reported to irs, regardless of 1099 ? CC bonuses are specifically excluded for now that is…

David A Darby
David A Darby

What are CC bonuses?

Electroman

CC bonuses are something in return for *spending* in a credit card. The IRS views these as savings, not earnings, so they’re tax-free.

qmc
qmc

Yes, I do. But Dave’s question was whether they 1099, not whether he should report.

AD
AD

In my experience I’ve rarely received a 1099 for brokerage bonuses. The bonus amount hasn’t seemed to matter. I pretty much always receive a 1099 for bank bonuses. I have no idea why banks almost always issue 1099’s while brokerages rarely do.

Shawn Austin
Shawn Austin

TD Ameritrade issue 1099-MISC for their bonus (or at least they did in 2017)

Steve

I got a 1099-MISC from Merrill Edge a few years ago for $1000 (probably because it was above $600).

lilurbanachiever
lilurbanachiever

Both ME and TD include sign-up bonuses in their consolidated 1099 forms. Oh, CC stands for Credit card, to answer the question above.

Steve

In the past, people reported not getting a 1099 from Merrill Edge for bonuses under $600. Do you know that they send 1099 for all bonus amounts now?

ken
ken

no deal. I’m sure it takes a few days for the transfer. do you know how much profits you missed unable to trade stocks during that transfer period ?

JT
JT

You are delusional.

On an unrelated note, a one year deposit requirement effectively kills this deal right ?

ken
ken

sure, you takes that pennies. let the big boys take care of the big money.

curtis leasure
curtis leasure

I think this is more geared to buy-and-hold investors and not day-traders. Most people are happy to transfer in-kind for a year if they get $2500 to boot.

lilurbanachiever
lilurbanachiever

That just made my day – big boys don’t chase sign-up bonuses. I can just see Carl Icahn excitedly texting WB about this new offer. And day-trading is basically glorified gambling. I know good gamblers who win on a regular basis, but the the vast majority loses. Good offer though, I might switch some funds from TD and ME.

Avi
Avi

I’d normally agree with JT, but the last time I transferred an IRA I had to convert to cash because the receiving brokerage couldn’t accept that particular mutual fund, and while it was sitting as cash during the transfer period the fund jumped a couple percent, way more than wiping out the bonus. Of course, it could have dropped during that time, but still a frustrating experience.

SamL
SamL

Why did you risk being out of the market? It’s obvious that could happen. You could have tried to maintain allocation by selling in one account and buying an equivalent holding in another account, to stay consistently invested. These bonuses are too small of a percentage to risk being out of market.

Avi
Avi

Yeah, in hindsight I should have sold and bought an equivalent fund that was transferable before initiating the transfer. Lesson learned!

TomTX
TomTX

Which is why I moved to ETFs. Portable.

qmc
qmc

Are you day trading? If you’re transferring assets, it’s not like they’re earning interest.

Jags
Jags

You just transfer assets in kind. You don’t lose a second in the market.

Jeff
Jeff

I wish I have $1million lay around.

Casey
Casey

Ditto. Could any of you high-rollers lend me a million bucks? 😀

BW
BW

Too much hassle to bounce around, I don’t want to leave Vanguard either.

keilu
keilu

make it like you have millions and dont want to hassle with a mill. why would you be on this site if you were wealthy? also,if after you transfer it dips below a million, lets say you lose money would you still get the bonus

Casey
Casey
Casey
Casey

Regarding your second question, if I’m not mistaken, you merely have to deposit into the brokerage account – not necessarily trade your cash for stocks or other instruments.

TomTX
TomTX

It’s NBD to have Vanguard swap your mutual funds to the equivalent ETF, which can get an in kind transfer. This minimizes the hassle factor. No more effort than getting a new CC for the signup bonus once you consider needing to set up payment, make min spend, etc.

SamL
SamL

The bonus amounts are just average. But Schwab has often not really had these bonuses at all, so the real news is that they are chasing assets and going after other brokerages’ clients more aggressively. So maybe brokerage bonuses aren’t going away just yet.

Rubic
Rubic

The offer end date of 11/18/2019 (if correct), with a 45-day funding deadline, appears to coincide with year-end accounting.

I’m hoping the offer extends later so I can fund an account in 2020.

not very smart
not very smart

My user brokerage account is moving to Schwab in 2020 anyway. wonder if it will count for the bonus if I move the assets from USAA now or if there is some exception for USAA since Schwab is absorbing it.

Mike
Mike

Had a similar situation a few years ago when Scottrade was being acquired by TD. Proactively transferred my Scottrade accounts to TD and did get the transfer bonus.

not very smart
not very smart

thanks, guess I might as well get paid a few $$ for the inevitable transfer then.

frugalman
frugalman

I am attempting to leave Merrill Edge since I mostly trade options and they still charge $6.95 per trade plus others. My question is which brokerage platform is better in term of option trading? Schwab, TD Ameritrade, E*Trade or others. Thanks to those who tested all of them and share the insights.

calwatch
calwatch

Honestly, Interactive Brokers (who led off this free trading train). You should be doing limit orders on options anyway so them selling your order flow doesn’t matter.

anthonyjh21
anthonyjh21

As much as I like Schwab it’s one of those deals I’ll pass on because I’m already with Vanguard and sometimes the possible issues outweigh the return. Not a bad incentive to get people over though. They do have amazing service.

David A Darby
David A Darby

I call BS on this “so-called” scam “offer”. In January 2019, I transferred about $600K to Schwab and never even got a courtesy “reach around”.

Steve

I wouldn’t call it a scam, they just don’t have good offers very often. Did they tell you they were going to give you a bonus when you did your transfer?

Schwab did pay me a $500 bonus in 2010. Recently (until this new offer & the recent referral offer) I haven’t seen them advertising any offers except free trades.

Jeff
Jeff

Does Schwab pay interest for the unspent money in the account, like Robinhood does?

nick
nick

yes, but it is pennies….. not sure how much, but my guess is .1-.2%

lilurbanachiever
lilurbanachiever

This is not pennies, not yet at least – e.g. Fidelity pays 1.5-2% for your “unused” cash. Now, you can just buy some liquid short-term bond ETF and get something similar but it is nice to have this by default. Fidelity did eliminated trading fees, but still they have no bonuses (yet). I remember the good old days with the mileage bonuses by Fidelity, back when miles were worth ~2-3 cents/mile.

jan
jan

Does this offer apply to regular IRA? They said “The offer does not apply to accounts managed by independent investment advisors, the Schwab Global Account™, ERISA-covered retirement plans, certain tax-qualified retirement plans and accounts, or education savings accounts.”

Evan
Evan

I called and asked and they told me yes, it does. The language was confusing to me too! Just make sure to use the promo code when opening your account.

lilurbanachiever
lilurbanachiever

Thanks for the heads up. Does not hurt to get enrolled, just called them. I would advise to call during the East Coast business hours. If you call at night, you get a bunch of newbie kids as phone support who cannot really help you anyway.

lilurbanachiever
lilurbanachiever

And I got a confirmation email with the offer enrollment. Classy) Now I have 45 days to do the deposits. The only problem is that they will probably not reimburse the account transfer fees b/c of this promo.

Tim
Tim

I asked my broker on the phone if they will reimburse the transfer fees when I was calling in to register this promo, and he said “yeah no problem, just send in the fee statements after the transfer”.

Obviously I haven’t got cash in hand yet, but at least that’s a good sign.

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