Free Stock Trading Is Upon Us

Filed in archive Investing on October 17, 2006

A couple of weeks ago I wrote about the new investing service Zecco, which will be offering free stock trades. I mentioned an article I had read that said Zecco's difficulty would come when its competition started to cut or eliminate their trading fees, thus leaving Zecco without a competitive advantage and without any other business to fall back on.

This may be starting to happen. Last week Banc of America Investment Services eliminated transaction fees on equity trades for any customer with over $25,000 in Bank of America deposit accounts. For most self-service investors, having $25,000 in an account isn't tough to do, and this isn't just having $25,000 in a trading account, but within any and all Bank of America accounts. Qualified customers get up to 30 free trades per month, which is plenty unless you're a day trader.

According to Bank of America's Brian Moynihan, who has some sort of long-winded banking title that I don't feel like copying down, "Our unique size, scale and strength enable us to do this on behalf of our customers, in order to help them more efficiently and cost-effectively manage their families' finances."

Zecco is probably not happy to hear this.