Cash In on Incentives to Open New Online Brokerage Accounts
Several discount brokers are offering cash incentives up to $2,500.
Discount brokers are competing hard for your money -- and they're willing to pay you a bounty if you give it to them. Cash incentives offered by major brokers range from a couple hundred dollars to $2,500, depending on how much money you invest.
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At E*Trade, for example, open a new IRA with $250,000 or more -- with a rollover from an employer retirement account or a transfer from another firm's IRA -- and it will deposit $600 in your account. TD Ameritrade offers the same incentive for opening any kind of account. TD Ameritrade's deal ends June 30, and E*Trade's offer expires on December 31. Both brokers pay smaller incentives for smaller accounts.
Most firms also charge a transfer fee of up to $100 if you are transferring or rolling over an account, although it may be far less and tends to be lower for a partial transfer of securities.
Schwab is paying $200 for new IRA accounts worth $50,000, and $2,500 for a cool $1 million. Merrill Edge offers up to $500 for IRAs of $200,000 or more. Schwab's offer expires April 17 -- the deadline to fund a 2011 IRA. Merrill Edge's expires April 16.
If you have a small retirement stash, consider Scottrade, which has a $100 incentive on the table until April 16 for IRA accounts of $15,000 or more; Scottrade also reimburses up to $100 of the transfer fee. If you can't meet the tax-time deadline, keep your eye on the brokers' Web sites. Incentives come and go.
Some brokerages don't pay a bounty but have long-standing deals to cover transfer fees. Zecco reimburses $150 of transfer costs on any type of account of at least $15,000. Just2Trade reimburses $100 when you deposit $10,000 or more.
How to make a switch
The firms make it easy to switch. You send a recent statement from your current broker and specify whether you want to move all or just a portion of your securities and cash. The new broker does the rest.
Before you bite, investigate annual (and transfer) fees, investment choices and commissions. An errant switch might add unwanted charges or wall you off from your favorite mutual funds or ETFs. For example, Schwab charges $8.95 commission fees for stock trades and gives you access to 2,140 no-load mutual funds. E*Trade charges $9.99 stock commissions and scores points for its easy-to-use Web site. TD Ameritrade charges $9.99 for stock trades and hosts robust research tools on its site.