Updated with new transfer offer. Brokerage firms constantly compete for “assets under management”, and many are willing to give you cash to move over your existing portfolio from your existing broker over to them. Unfortunately, many of these offers are for new app startups with questionable customer service. How about a traditional firm with telephones connected to knowledgable humans working inside physical branches in major metro areas?
Charles Schwab is currently offering up to a $2,500 cash bonus depending the value of assets that you move over (qualifying net deposit of cash or securities) within 45 days of enrollment. The percentages aren’t the best, and the tiers are relatively high, but this is actually a brokerage I wouldn’t mind leaving my assets at for the long run. It’s also available to existing Schwab customers.
- $200 with $50,000–$99,999 in qualifying new assets
- $300 with $100,000–$249,999 in qualifying new assets
- $600 with $250,000–$499,999 in qualifying new assets
- $1,200 with $500,000–$999,999 in qualifying new assets
- $2,500 with $1,000,000+ in qualifying new assets
The easiest option is often to perform an in-kind ACAT transfer of existing securities, which takes less than a week and all of your tax basis information should also move over after another few days. Your old broker may charge you an outgoing ACAT fee about about $75, although you should ask Schwab if they will reimburse you for this fee.
From the fine print and FAQ:
Accounts that are eligible for the Schwab Investor Reward include: Schwab retail brokerage accounts and individual retirement accounts (IRAs), including accounts enrolled in Schwab-sponsored investment advisory programs such as Schwab Intelligent Portfolios®, Schwab Managed Portfolios™, Schwab Managed Account Select®, Schwab Managed Account Connection®, and Schwab Wealth Advisory™.
Schwab Bank Investor Checking™ accounts do not qualify for this promotion whether they are linked to a brokerage or are stand-alone. If you make a deposit in a Schwab Bank Investor Checking™ account, you will not receive the award. The offer also does not apply to the Schwab Global Account™, ERISA-covered retirement plans, certain tax-qualified retirement plans and accounts, education savings accounts, Schwab Bank accounts, or accounts managed by independent investment advisors.
Can two clients in the same home get the award?
Yes. As long as both clients have individual accounts and separately qualify for the Reward, provided that each makes a qualifying net deposit.
Schwab appears to still be offering their $101 Starter Kit promo. But the FAQ says “Can this offer be combined with other offers? No. This offer can’t be combined with other offers.” I’m not sure if it counts as combining if you first open the new account for the Starter Kit bonus, wait, and then participate in this transfer offer.
One major drawback with Schwab is that the default cash sweep is not good. Still just 0.45% APY as of 2/29/24! Boo. You need to take proactive steps to avoid lost interest if you plan to keep significant amounts of cash in their default sweep account. Consider buying Treasury bills, ultra-short bond ETFs like MINT, or Treasury Bill ETFs like GBIL (still possible to lose value). See my separate post on the best alternative Schwab cash sweep options.
