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Since most of all my finances are with Schwab, I'm very glad to see this. Now they just need to eliminate all transaction fees (though they did decrease their fee from $76 to $49.95 without much fanfare about a year ago) on mutual funds as well.
Not surprisingly, I have not seen this announced on the Schwab website yet.
Thankyou. what about Merrill edge, free trading IF have substantial amounts in holdings of boa/brokerage and 401k... only costs are to buy private bonds, which can range from 10 to 20 bucks/trade for small investments buy 5k-20k.
Vanguard is also trying to get rid of these practice also only for Flagship members
Every firms are trying to do same thing - free tradings, and cut down on their ETFs annual fees also to almost 0.
"Merrill edge ... only costs are to buy private bonds, which can range from 10 to 20 bucks/trade for small investments buy 5k-20k."
Except for: - Treasury auction bonds: free at most brokerages, $29.95/trade at ME (since they're not avail online) - Secondary muni government bonds: $1/bond, $10 min - Government agency bonds: $1/bond, $10 min
Of course "free" bond trades just mean that the commission is built into the price. Merrill Edge even discloses this in black and white.
Which brings us to markup. How good are the prices you get on bonds at Merrill Edge? For example (I just spot checked Calif. 10 year munis that were not zeros):
ME has 10,000+ bonds (it sells no new issues online), including corporate, treasuries, agencies, and munis. 3,000- munis, fewer than 600 in California.
Fidelity offers 65,000+ bonds (including160 new issues). 50,000+ munis, including 7,000- in California.
The last time I compared Schwab with Fidelity on bond prices was around a decade ago, and my impression was that Schwab was slightly more expensive, but that may have changed.
Vanguard stopped charging commissions on ETFs for all customers, not just Flagship customers a year ago. Unlike Merrill, and most of the other brokerages, for Flagship customers it offers a limited number of free TF fund trades annually. It's been doing that for many years. What changed fairly recently (a couple of years ago?) is that Vanguard increased the annual number of free trades. What Schwab is doing is IMHO unique (so far) - no min balance, ETFs and stocks, and backed by a large institution that should be able to continue this indefinitely (especially since it makes money on all the free cash in its lower paying MMFs). In that sense I differentiate it from Firstrade. The latter strikes me as more like Scottrade, which for some time sold all mutual funds without a fee, but couldn't sustain that.
It will be interesting to see when Fidelity matches Schwab. Those two seem to move in parallel, e.g. both dropping their TF rates from $75-$76 down to $50 within a year(?) of each other.
The past year has already been rough for SCHW- down about 13 % plus another nearly 10% just today. Yes, it will be interesting to see how Fidelity responds.
Comments
Thankyou. what about Merrill edge, free trading IF have substantial amounts in holdings of boa/brokerage and 401k... only costs are to buy private bonds, which can range from 10 to 20 bucks/trade for small investments buy 5k-20k.
Vanguard is also trying to get rid of these practice also only for Flagship members
Every firms are trying to do same thing - free tradings, and cut down on their ETFs annual fees also to almost 0.
Except for:
- Treasury auction bonds: free at most brokerages, $29.95/trade at ME (since they're not avail online)
- Secondary muni government bonds: $1/bond, $10 min
- Government agency bonds: $1/bond, $10 min
Of course "free" bond trades just mean that the commission is built into the price. Merrill Edge even discloses this in black and white.
Which brings us to markup. How good are the prices you get on bonds at Merrill Edge? For example (I just spot checked Calif. 10 year munis that were not zeros):
CUSIP 13077CU28 (AA, 7 yr maturity) Price/YTW:: ME: $109.668/2.175%; Fidelity: $109.284/2.231%
CUSIP 219764PA9 (AA, 10 yr maturity) Price/YTW:: ME: $109.924/1.467%; Fidelity: $109.799/1.488%
Bond inventory online?
ME has 10,000+ bonds (it sells no new issues online), including corporate, treasuries, agencies, and munis. 3,000- munis, fewer than 600 in California.
Fidelity offers 65,000+ bonds (including160 new issues). 50,000+ munis, including 7,000- in California.
The last time I compared Schwab with Fidelity on bond prices was around a decade ago, and my impression was that Schwab was slightly more expensive, but that may have changed.
Even with stock/ETF trades, all brokerages are not created equal. A zero commission rate does not guarantee you'll come out better.
https://www.stockbrokers.com/guides/order-execution
Vanguard stopped charging commissions on ETFs for all customers, not just Flagship customers a year ago. Unlike Merrill, and most of the other brokerages, for Flagship customers it offers a limited number of free TF fund trades annually. It's been doing that for many years. What changed fairly recently (a couple of years ago?) is that Vanguard increased the annual number of free trades.
What Schwab is doing is IMHO unique (so far) - no min balance, ETFs and stocks, and backed by a large institution that should be able to continue this indefinitely (especially since it makes money on all the free cash in its lower paying MMFs). In that sense I differentiate it from Firstrade. The latter strikes me as more like Scottrade, which for some time sold all mutual funds without a fee, but couldn't sustain that.
It will be interesting to see when Fidelity matches Schwab. Those two seem to move in parallel, e.g. both dropping their TF rates from $75-$76 down to $50 within a year(?) of each other.
TDA just dropped their fees to match Schwab this evening, which was a nice surprise.
Here's a wikipedia link about them too:
https://en.wikipedia.org/wiki/Payment_for_order_flow
Pioneered by Bernie Madoff!