Updated with new $6,000 tier, referral offer comparison. 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 $6,000 cash bonus depending the value of assets that you move over (qualifying net deposit of cash or securities) within 45 days of enrollment. The minimum hold period is one year for taxable brokerage accounts. 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 new assets
- $300 with $100,000–$249,999 in new assets
- $600 with $250,000–$499,999 in new assets
- $1,200 with $500,000–$999,999 in new assets
- $2,500 with $1,000,000-$4,999,999 in new assets
- $6,000 with $5,000,000+ in new assets
Note: New-to-Schwab clients should compare this with the Schwab Referral Offer, which may offer a slightly higher bonus at specific asset levels (ex. $100 bonus on $25k in new assets, $300 bonus on $50k in new assets, $500 bonus on $100k in new assets). At the higher tiers, the offer above is better. That’s my referral link, thanks if you use it (although please let me know if you have issues with it; I’ve never actually gotten a bonus from Schwab so I’m not sure if it really works).
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.
Both taxable and IRA accounts are eligible. 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 0.48{3da602ca2e5ba97d747a870ebcce8c95d74f6ad8c291505a4dfd45401c18df38} APY as of 7/16/24! 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, brokered CDs, or Treasury Bill ETFs like GBIL (still possible to lose value). See my separate post on the best alternative Schwab cash sweep options.
