Charles Schwab & TD Ameritrade Eliminate Fees for Online Trades
On Tuesday, Charles Schwab announced that it was eliminating fees for online trades, including U.S. stocks, ETFs, and options. That would start on October 7. The news came a few years after apps like Robinhood, WeBull and others were already offering fee free trading.
In a statement, Schwab CFO Peter Crawford called the move “inevitable” and the right thing to do for clients. Schwab is the largest publicly traded online broker, with around 12.1 million customers using its services. It had prided itself on offering low-cost services.
Soon after, TD Ameritrade also announced that its U.S. brokers will no longer require fees for online trades, U.S. and Canadian ETFs, option trades as of October 3. However, those trading options may have to pay a $0.65 fee per contract.
Lower fees are almost always better for customers. But that doesn’t mean there are no other costs. One way they make money for example is by investing the cash that is sitting in your brokerage account. You might earn some interest, but it is usually much lower than what you would get with conventional banks.
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