Brokerages with Free Stock Trading

Don’t you want to trade stocks for free?  As recent as a decade ago, free stock trading was pretty much a oxymoron.  I mean, why would someone offer something for free when others were paying up to $100 per trade with full service brokers?  Fast forward a couple short years and these days, everyone is asking “How Do I Get Free Stock Trading?”

A Little History of How We Got to Free Stock Trading

As the Internet became more and more popular during the dot com boom, companies such as E-Trade and Charles Schwab started offering low commission stock trades by giving traders a “do it yourself” user interface.  This was the era of the discount brokerage.  The change was revolutionary because we no longer needed to call some broker up to not only place a trade but listen to his/her sales pitch on financial products that needs to be sold.

Slowly, the competition amongst discount brokerages heated up and commissions started coming down even more but no one ever came close to the $0 trades for obvious reasons.

Eventually, it happened.  Zecco Trading was born with $0 free trades.  This again took the industry into another plateau of pricing standards.  Nowadays, there are a few options for free stock trading so let’s explore these in more depth.

E-Trade IRA with Free Trades for 60 Days

etradeE-Trade as mentioned is one of the more established discount brokerage in the industry, but they too have jumped on the free trades bandwagon (if only temporarily).  E-Trade is offering new accounts free trades for 60 days, plus up to $600..

E-Trade Free Trading Details

  • Individual, Joint, and Retirement Accounts are Eligible
  • Commissions will be deducted like normal, but the account will be reimbursed for the full amount
  • This is actually 500 free trades within 60 days, and you need to fund the account with at least $10,000

It’s hard for me not to recommend E-Trade because I’m a happy user of its services.  If you are looking for free trades, then this is a decent option but join because you are looking for a good discount brokerage with reasonable fees and good overall user interface and service.

WellsTrade from Wells Fargo

wells fargoI’ve been a Wells Fargo customer since I got my first checking account so it was easy for me to consider them when I had to rollover my IRA.  WellsTrade is Wells Fargo’s DIY investment option and the neat thing about it is that they give you 100 trades per account as long as your combined assets with them are over $25,000.  This means that if I have a Roth IRA, Rollover IRA, and a taxable account with them, I get 300 trades a year for free!

WellsTrade Free Trading Eligibility

  • Combined assets with Wells Fargo of $25,000 or more
  • 100 free trades per year, $5.95 thereafter

Thoughts of Wells Trade

While the user interface is not as robust and intuitive as E-Trade’s offering, it gets the job done. Sure, it took a while to get used to and some screens show real time data while others show delayed quotes and others that show yesterday’s closing cost but it works.  Another thing I noticed is that enrolling in DRIP through Wells Trade requires calling a representative, while I can do it all online through E-Trade’s interface.  This is not a major hiccup for people who just need to call once to enroll everything they have (and everything they will ever buy) into DRIP but if you cherry pick every stock into DRIP and you trade frequently, it may become a hassle.

Of course, it’s hard to argue with 100 commission free trades a year per account so weigh the pros and cons. Click Here for a Full Review of WellsTrade by Wells Fargo.

Merrill Edge (aka Merrill Lynch aka Bank of America Investment Services)

bofaBofA also has its own free trading service.  While it doesn’t have a slick name like “WellsTrade”, it trumps everyone with 30 commission free trades per quarter if you have $25,000 combined balance with them.  However, make you sure read all the fine print if you are going to enroll because I found something called an semi-annual maintenance fee of $50 if you don’t at least have one of the following:

  • a BofA personal checking account
  • $50,000 combined household balance with them (I assume this means everyone in your family and not just you)
  • A Columbia Funds or Funds Solutions mutual fund position
    (variable-priced funds only; excludes money market mutual funds).
  • Six trades or $150 in commissions in the last 12 months (free trades doesn’t count)

As I don’t have an account, I cannot comment on the usability of it but I’m pretty sure it’s very similar to WellsTrade’s offering in that you get what you pay for.

Conclusion of Free Stock Trading

Maybe it’s due to marketing, but it seems like Zecco is a popular choice when I was doing the comparison.  I would recommend Zecco only for those that don’t really need the comfort of having great customer support.  For those that do, consider WellsTrade.

Last thing to note is that when you are looking for a good brokerage account, you should not only consider trading cost but also the user interface, customer support and whether there are any extras.  For example, a company like may cost you money every time you trade, but at a low commission of $4.95, you may find that it’s worth it to pay.

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{ 4 comments… read them below or add one }

Jmund May 15, 2009 at 1:02 am

If you are a buy-hold-rebalance etf-index-investor you will find “tax loss selling” important for your selection of a brokerage.
For this reason, I will suggest looking at WellsTrade for that group of readers. WT platform has the option to choose the lot that you want to trade.

Zecco defaults to FIFO just like other borkerages.
Trade King provides that as a service but I read somewhere that the end-of-the-year tax papers will FIFO.

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etrade August 30, 2009 at 11:48 pm

I chose Etrade because when I first started, I get $550 free brokerage and full support. The company has a wide range of investment choices from shares, options, warrants, CFD’s and managed funds. Plus their superior trading tools helped me kick start my investment. Also, I was able to join a trading network of pros which I can get market analysis and insights that help me trade successfully in the market.

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joe lee September 5, 2009 at 12:32 am

FYI, Banc of America Investment Services is offering 30 free stock trades per month, not per quarter with $25,000 bank deposit as stated in the above article. Joe

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Bill Rutledge December 3, 2009 at 10:06 am

I have been happy with B of A’s 30 free trades per month, which requires a min bal of $25,000 checkings and/or reg savings account and of course separate funding for the Brokerage acc. The online
trading platform is not for a speed trader but is good for an over night trader. Have been using them for approx one year .

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