Brokers: Low-Cost and Free Trading
Stock-Net has researched brokers, and has identified a group of brokers that offer you low-cost, or in some case, completely free trades. If you are thinking that there must be some strings attached, you are right, but the trade-offs for these free trades may be something you are willing to accept.
Low-Cost brokers include a large group, but some of the group have distinguished themselves with some unique offerings. Two brokers of interest in this category include Sharebuilder and Foliofn. Sharebuilder offers greatly reduced commissions, specifically targeted to investors who wish to steadily make purchases of stock over time.
Foliofn is targeted for active investors who wish to deal in baskets of stocks, providing the ability to purchase dollar-amounts of baskets of stocks. Foliofn tracks your fractional share purchases for you, allowing you to specifically allocate your investment dollars regardless of the cost of individual shares. For a $199 yearly fee, you get up to 400 free window-trades per month free and can trade a basket of up to 50 securities.
Several brokers have recently announced free trades: Bank of America, Wells Fargo, and Zecco.com. To qualify for free trades, Bank of America requires a minimum of $25,000 in a non-brokerage account, coupled with $25,000 in a brokerage account, and offers up to 30 free trades a month. Trades above 30 per month cost from $5 to $10.
Wells Fargo offers free trades for accounts with $25,000 minimum, qualifying you for up to 100 free trades per year. If you make more trades, they will cost $5.95 each. Watch out, though, if your balance falls below the minimum, you will face a $25 fee each month.
Zecco.com, on the other hand, requires only $2,500 account size to qualify for free trades. Once you meet the minimum account size, you qualify for up to 40 free trades per month. Extra trades will cost only $3.50. Zecco’s business model relies on income from advertising and income from margin interest and cash accounts. Zecco offers the best ‘free trades’ deal so far, but they are an online-only broker, and are a fairly new company.
With these options, if you are looking for a broker, or looking for a new broker, one of these companies may be offering just what you are looking for.
