Dedicated to Deposits: Deals, Data, and Discussion

Wells Fargo's Free Online Trades

POSTED ON BY

Wells Fargo Bank
Wells Fargo has announced that through its brokerage unit, it'll offer 100 commission-free trades per year of stocks, no-load mutual funds and ETFs. The free trades require customers have a combined $25K in deposits or loans. Also, 10% of outstanding mortgage balances can be used to qualify. Eligible deposits can include CDs, IRAs and brokerage accounts. Wells Fargo use to have some decent short-term special CDs, but the rates have gone down over the last few months. The best one now is a 4.80% APY 5-month CD (see rate page).

Wells Fargo is hoping that sacrificing some brokerage revenue will attract more low-cost deposits and create more borrowing. This Forbes article reviews this move and how it might impact the online brokers. According to the article, Bank of America's free trade offer (see post) that started last fall hasn't had much impact. Estimates of new brokerage accounts at Bank of America in the fourth quarter is 9,000 compared to 69,000 at Ameritrade. Wells Fargo's offer may be more successful since BoA's program is only good for stocks and not mutual funds. Also, Wells Fargo's has more ways to qualify, for example, customers with mortgages of at least $250K will qualify.

According to the article, Wells Fargo is the nation's fifth largest bank, and it earned $8.5 billion last year.
  Tags: Wells Fargo Bank

Related Posts

Comments
6 comments.
Comment #1 by TFB (anonymous) posted on
TFB
$25k in brokerage assets also qualifies. So you don't have to keep money in a low interest account or have a mortgage with Wells Fargo.

1
Comment #2 by Anonymous posted on
Anonymous
The problem with this is they pay so little compared to fidelity (5%) for cash awating trades. I don't wont my 200M trading capital earning so little. I see this mainly as a gimmick.

1
Comment #3 by SVG (anonymous) posted on
SVG
Readers,

Those of you who are traders will know that such offers come-n-go. There are only a very few brokerages are *really* low-cost brokerages that are focussed on business of being a broker and have stayed that way.

If you are seriously interested in trading and saving on comissions while at it, then try Zecco or InteractiveBrokers.

I'm not sure how long Zecco will last, but InteractiveBrokers is around for years.

- SVG

1
Comment #4 by Anonymous posted on
Anonymous
I hope the banks and brokerage firms will start to compete on the MARGIN RATES too.

Does anyone here know where I can get a great "Margin Rate" at less than 6%?

-Tom

1
Comment #5 by Anonymous posted on
Anonymous
The 7 day yield for cash in brokerage account is 4.68%, not that much off from Fidelity.
FWIW, I've been with WF for 3 years in its PMA 50 free trades/yr which was recently upgraded to 100 trades as described in the OP so hopefully, this offer won't 'go' any time soon. Although I agree with svg in that if you're serious traders (100+ trades/yr), there are better options. I used WF for my intermediate/long term investment trades and it suits that purpose well. I'll throw in MB Trading in additions to IB and Zecco as recommendations for active traders.

1
Comment #6 by rate freak (anonymous) posted on
rate freak
100 free trades, $5.95 thereafter. Not bad if you're a small-time trader like me. The yield rate is comparable since the free trades makes up for it.

Just read and understand the footnotes before getting in.

1