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Bank of America Offering Free Trades

Posted By Jim On 10/12/2006 @ 1:50 pm In Banking,Investing | 6 Comments

If you have over $25,000 combined in any of your Bank of America accounts then you’re in luck, you now qualify for thirty free trades a month from Bank of America. The only downside is that depending on what the rate of interest is on those accounts (let’s say 0%), you could be surrendering as much as $1,250 per year if that money were deposited in an high yield savings account at 5%.

When David tipped me off to this via email (Thanks David!), I first thought this was a great idea on the part of BoA. First, you hop on the heels of Zecco (they just introduced advertising supported free trades). Second, you get people to give up earning $1,250 in interest (if they go with a 0% checking account) in return for 360 free trades a year (valued at $1,800 to $3,600 a year).

How many people commit thirty trades in one month? Ignoring the fact that it may be indicative of a poor investment strategy (buy-and-hold is hard when you transact thirty times a month), thirty well-informed intelligent trades is a lot for someone who has a full-time job.

Hopefully people who want to take advantage of this can count Certificates of Deposit account balances as part of the $25k because Bank of America has a 5.00% APY High Yield CD and then the trades are truly “free.”

Source: Bloomberg [3] (Thanks David!)

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[3] Bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=az13GnOJ8oOY&refer=home

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