Bonuses for Opening a Brokerage Account
With so many brokerage firms competing for business, there are many reward types currently available for opening a new investment account. Here are the five basic reward categories:
Cash Bonuses at Brokers: Several brokerage firms are simply paying out cash to new customers to entice them to open investment accounts. Sometimes, there will be a minimum deposit or transfer amount for the initial funding to qualify for the special. Nevertheless, meeting the requirement can be quite rewarding in some cases, as the bonus can be as high as $4,000—just for opening and funding a new account. Brokerage firms often permit a transfer of securities to qualify for the initial funding, so no new cash actually has to be deposited.
Free Stocks: This one is becoming more common. Broker-dealers are handing out free stock shares for opening an account. The prices of the shares can range tremendously, anywhere from a few dollars to thousands of dollars. Often, a stock will be chosen randomly, and the broker will give away a large number of low-priced stocks and a small number of high-priced stocks.
The biggest difference between the first two categories is in how the rewards are taxed. A cash reward will show up on Form 1099-INT during tax season, while free shares of stock may appear on Form 1099-B, 1099-MISC, or some other form. Selling such shares can result in capital gains or losses during tax season, which of course is not the case with a cash bonus.
Referral Promos at Brokers: Existing customers at several brokerage firms can refer friends, family members, and pretty much anyone else and receive a bonus of some type for doing so. In many cases, the referred friend can also receive a bonus if they deposit a minimum amount of cash and/or securities into the new account.
Account Transfer Fee Rebates: Many investment firms still charge fees for outgoing account transfers, and this policy intentionally discourages investors from opening accounts with rival firms. But there’s no stopping a rival broker from refunding the ACAT transfer fee of another broker, and many securities firms today offer such specials, at least under some conditions. For example, the transfer may need to have a minimum value. In some cases, a brokerage house may have no standing policy on the issue, but it never hurts to ask, especially after a sizeable transfer.
Miscellaneous Broker Specials: A few broker-dealers may offer other types of prizes occasionally. These can range from gift cards (Amazon, for example) to merchandise (such as computers) and heavily-discounted subscriptions to popular financial magazines or newspapers.
As with any type of promotion, there will be fine print in brokerage specials. Sometimes, certain account types, such as IRAs, may be ineligible. Other times, a minimum amount of funding must be received within a certain timeframe. As always, be sure to understand the rules before playing the game.
Also of importance is the expiration date an offer may have. Some promotions are ongoing, which means they have no specific expiration, although an offer can be rescinded at any time. Here is a list (in alphabetical order) of promos that are valid as of last check:
All Broker Promotions
Firstrade
Although Firstrade is not a well-known brokerage firm, it is trying hard to change that with a very
enticing brokerage special. New customers can earn up to $4,000 by opening either a taxable account or
IRA. The minimum deposit to earn the smallest reward ($50) is $5,000.
M1 Finance
M1 Finance is offering its high-end membership M1 Plus free for three months (a roughly $31 value).
The best thing about this special is that no new deposit is required. Existing customers can get in on
the broker deal, too.
Merrill Edge
A much more rewarding brokerage incentive is available from Merrill Edge. This one is valued up to $600, depending
on the amount of the transfer or deposit the new account receives. It does have to be a self-directed account. A Guided Investing account with the brokerage house is not eligible for this special.
The minimum deposit or transfer (which starts at $20,000) must be received within 45 days of account opening and must remain in the account for at least 90 days.
moomoo
If you prefer shares of stock instead of cash, moomoo is worth considering. The brokerage firm is
giving away whole shares of stocks for opening and funding a new account. Opening an account gets one
free share. Depositing $100 earns an additional 4 stocks. Depositing $2,000 instead bumps that figure
up to 14 stocks. The value of the 15 stocks ranges from $3 to $2,000 each.
Participants need to open the moomoo app and tap on the DRAW button to claim the free stocks. Only U.S.
residents are eligible for this deal.
Public
Public.com is giving away a free slice of a security or cryptocurrency for every new brokerage account
opened under its current special. The fractional share or coin can be worth as much as $300 or as little as $3. The drawing is digital and random. A minimum deposit of $20 is required. Once the deposit is received, the bonus can be claimed in the mobile app. The vast majority of rewards will be $3.
Robinhood
Robinhood does a little better by keeping most broker rewards within the $5–$10 range. A small percent of
new accounts will get up to $200 in fractional shares of stocks. New customers must select their stocks within 60 days of account opening. Cash proceeds from the sale of any fractional shares cannot be withdrawn for 30 days from the reward claim date.
Robinhood also has a refer-a-friend program. This one is much more enticing with a maximum annual value
of $1,500.
SoFi Invest
SoFi Invest is trying to squeeze into the brokerage world. It does this with regular new investment account bonuses. The broker’s current special is worth between $50 and $1,000, payable in stock. In this special, the customer can choose the stock (usually, the brokerage firm does). Most prizes will be worth around $5.
tastyworks
tastyworks has a cash bonus offer for new brokerage accounts funded with at least $5,000. This one is pure cash and starts at $100. The largest prize is $2,000 for a deposit of at least $100,000. This offer is valid for taxable accounts only.
Betterment
Free portfolio management is available with the famous robo advisor Betterment. This is the company that popularized automated management, and it is currently giving the service away to free to new customers. A deposit of at least $15,000 is required. The length of free service depends on the total deposit amount, which must be received within 45 days. Up to a full year of free management is on tap.
Existing customers have a second broker promotion. Referring friends and family members to Betterment will result in bonuses for both the referrer and referee. The prize will likely be the same: free account management for a length of time that varies by the amount of funding.
Charles Schwab
New customers at Schwab can receive up to $1,000 for opening and funding a new account. This investment account special is a referral program, so the account must be opened by clicking on a referral link, which presumably will be provided by a friend or family member with a Schwab account. Many account types are available for this special, including IRAs and robo accounts. The new account must be funded within 45 days to receive the bonus, which should be plenty of time.
Coinbase
If cryptocurrencies are what you’re after, Coinbase has two promotions. The first is a simple $5 Bitcoin promo: open a new account, make a purchase, and Coinbase will add $5 worth of Bitcoin to the portfolio.
The second special is a spin-the-wheel promo. This one could be a little more lucrative. It is worth between $3 and $200 and is payable either in Bitcoin or USD. Here’s how it works: Open a new account, make a crypto purchase, and then spin the digital wheel on the website. The software will randomly decide the outcome and payout method (USD or Bitcoin). The great majority of contestants will get $5 or less.
In both specials, residents of Hawaii don’t qualify for the special. Existing Coinbase account holders aren’t eligible, either.
E*Trade
Opening and funding a new E*Trade account could be a very worthwhile undertaking as the broker-dealer
is offering up to $3,500 in cash bonus for doing just that. Taxable and retirement accounts are both
eligible. The new account must be funded within 60 days of account opening. Perhaps the best part of
this broker promo is that existing customers can get in on it. Although the special is set to expire at the end of 2023, E*Trade has frequently continued this one.
Fidelity
Fidelity will reimburse another broker’s ACAT transfer fee if the incoming account transfer is valued
at $25,000 or more. Fidelity may require proof of the ACAT fee via a copy of a recent account statement
from the outgoing brokerage firm.
TD Ameritrade
TD Ameritrade doesn’t quite offer the same payout as tastyworks, but its current new brokerage account bonus is valid for
IRAs. New customers must not have an existing brokerage account with TD Ameritrade. The cash prize ranges from $100 for a $25,000 deposit up to $1,000 for a $500,000 deposit.
Webull
Rounding out our list is ultra-discount firm Webull. Although it’s one of the least expensive brokerage
firms out there, it does nevertheless manage to have regular stock giveaways.
Currently, it is giving away up to 2 free stocks (fractional shares of them, anyway) to new accounts
that simply get opened. No deposit is required. A second part of the promo is good for fractional shares
of 10 stocks if the new account receives funding of any amount within 10 days of account opening. Each fractional share in the second half could be valued as high as $3,000, although the odds for this are 1 in 10,000.
Broker Promotions Disclaimer
INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
The brokerage promotions for new accounts could change without notice. Each brokerage account bonus offer has fine print, therefore investors
should thoroughly read and understand it before opening an account. Also, remember that these new brokerage account bonuses expire on
different dates, so investors need to be aware of that fact as well.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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