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$50 TradeKing Inactivity Fee
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I’ve long touted TradeKing as a great discount broker because they have low commissions ($4.95 a trade) and no account minimums. Unfortunately, there’s been a change and they will now be assessing an annual $50 inactivity fee on accounts that have a “combined household account value of less than $2,500″ or have not made a single trade in an entire year. An account is part of a household if it has the same mailing address and/or tax ID and if you are assessed an inactivity charge, you will only be charged once.
At first you might think that this is unfair, to spring an inactivity charge, but the requirements to avoid this are fairly low. If you have more than $2,500 in your accounts, you won’t be assessed the fee. If you don’t have that much, just make one trade. If you make just one trade, you won’t be assessed the fee. Paying $4.95 (or $9.90 round trip) is better than $50.
In my mind, if you have less than $2,500 and aren’t making any trades, your money is better off somewhere else (like a high yield savings account) anyway until you’ve accumulated more savings.
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I think you mean “and have not made a single trade”, not “or …”
Hey Jim – if you make 1 trade, OR have a balance over $2,500, you don’t get assessed the fee. You don’t have to have both.
Thanks GE, I added a little clarification to make it clearer.
I wonder how many people will get caught up in this fee. The threshold seems low, but there are plenty of people who throw $500 in and then forget about it.
I got caught up in it. I initially set up my account with TradeKing because of their “no hassle” fee structure; I knew I wouldn’t be making many trades for a year or two, but wanted to give the broker a try before increasing the amount of my investments with them.
I will be closing my account with TradeKing. In an industry with so much competition, losing any segment of your market share seems like a bad long-term strategy. However, I don’t know what their business model looks like; maybe the potential for a customer like me investing more through TradeKing at a later date is outweighed by any inherent costs in maintaining my “inactive” account. Regardless, they lost my business.
I also got caught up in it. Anyone have any recommendations for other online brokers that have NO fees to leave a small sum of money parked in your account.
If you don’t make a trade for an entire year, I recommend keeping it in a savings account instead.
I got caught off guard too. I don’t recall ever getting any kind of notice to the policy change. When was sent, last November? I don’t recall ever getting it.
I’m looking to switch to maybe Scottrade or E-trade but Trade King wants another $50.00 to Transfer out. No fee to close so I might just do that and start over somewhere else.
Tradeking is wrong for the fee and it shows how hard up for cash they are. If they were fair they would charge an inactivity fee of 10.00 to cover the cost of a trade. Also this was posted in November so it should not have taken affect until the end of 2012 not one month later.
Yes incredibly dishonest and unethical of tradeking. It’s OK to drive us low margin customers away, just don’t steal our money in the process. Anyone willing to leave should have their $50 refunded.
They did not provide adequate notice and are trying to steal money from regular people.
I agree. I was going to execute a trade today, because I misread the email sent in November, thinking the policy would be implemented at the end of 1Q 2012, not January 3! Too bad, too late.
It’s unethical, and I’ll be closing my account in the remaining 300 or so days I have left!
Not sure what is wrong with TradeKing. I was not aware of this new ridiculous charge. I’ll have to shop around myself.
Got this notice on April 18th. They charged me yesterday on June 5th. It says on the notice: Your account will incur the Inactivity Charge in 60 days only if these two conditions apply.
60 days is in bold. It has been less than 60 days…. I would have made the trade had I known June 5th when it was 48 days after the notice.
I’d talk to their customer service online chat, they’re usually good about this sort of thing.
Got hit with the fee. Did not receive e-mail notice that they claimed was sent. Was unwilling to budge on unreasonable $50 fee. 0 stars out of 5.
Sometimes I keep accounts open with $0 or just a few dollars, if I switched to another place but might want to switch back in the future. It’s easier to just transfer money back into an existing account than to go through the whole account opening process again (though maybe if you close an account they can reopen it in an easier way than the regular process). Forcing me to close an account makes me less likely to switch back to them in the future.
Another reason for keeping accounts open with low balances is to use features like streaming quotes (not sure if TradeKing has any good features like that). Though, in that case it seems a little more fair that they’d charge a fee if you’re not making any trades.
But what happens if you have $0 in the account? I doubt they’d make your account go negative; maybe they wouldn’t charge the fee in that case. Or maybe they’d just automatically close your account after a few months.
ya tradeking has fallen to new low, maybe they are in trouble and all customers should take their money out of there before they lose it all.
These scumbags screwed my with this yesterday. No email was ever sent regarding this new fee. I went back and checked. They charged my the fee in October and sold off stock of my yesterday to cover it. I did get the notice of the pending stock sale. Screw these scumbags. I am in the process of closing my account now and will start over with a company that isn’t so slimely. 0 out of 5 stars.
They took my stock because I didn’t have any money sitting there for future purchases. Can they do that???
They sold your stock to cover the fee?! Springing the fee on us was bad enough, but seems like selling your stock without your permission should be illegal. I would check with attorney general’s office or FTC. Another point: was this fee disclosed when you joined tradeking? I don’t remember anything about it when I joined. Therefore, I didn’t agree to it. I personally would not have opened the account if I’d know of this fee. We should be grandfathered out of it if it wasn’t disclosed when we joined.
Tradeking sold my shares to pay the fees I never knew existed, just before my share price would have put me back in the green. I never received notice, nor did I agree to the fee policy. Thieves!