Free Stock Trading Taking Off
At the beginning of this week Zecco announced they would offer limited free trading accounts on their web site (40trades/mo, min $2500). There has been alot press and interest in it, but I have been skeptical - after all, when I purchase a stock investment I hope to hold it for 30yrs and I want to make sure the institution thats holding the stock is going to be around as well. Given Zecco has been in existence for only a few months, I have been taking a wait and see approach.
However, today Bank of America announced it to would begin offering free trading in its brokerage accounts (30trades/mo, min$25,000). Why is this significant? Bank of America is a very large, well established financial institution. When a company like Bank Of America starts offering free trading in its brokerage account its probably time for all established brokerage firms to look at offering lower (or even no) transaction costs. I think this can only be good news for stock investors.
Comments (2)
Somehow, I'm sure the larger banks/brokerage houses will find some way to make up the lost revenue from fees in some other way the customer won't realize at first.
Posted by Flexo | October 11, 2006 8:31 PM
Flexo, I wouldn't be suprised if your right - my only hope would be that the overall holding cost ends up being reduced (e.g. the hidden fees end up being less that the current higher transaction fees).
Posted by 2 million | October 11, 2006 8:49 PM