Mutual fund trades at Schwab free under $99?

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aednichols
Posts: 35
Joined: Mon Nov 21, 2016 4:44 pm

Mutual fund trades at Schwab free under $99?

Post by aednichols » Tue Aug 13, 2019 8:17 pm

I was playing with the order entry form and found the following pricing for Vanguard funds:

$99 or less -> $0.00 commission
$100 to $599 -> sliding scale of $8.50 per $100, e.g. $21.25 for $250
$600 or more -> $49.99

On their pricing page the only information is a rather non-specific "Up to $49.95 per purchase".

Why on earth are they seemingly encouraging multiple tiny trades by making them free?

123
Posts: 4895
Joined: Fri Oct 12, 2012 3:55 pm

Re: Mutual fund trades at Schwab free under $99?

Post by 123 » Tue Aug 13, 2019 8:47 pm

I have come across this also at Schwab and used it a few times. The occasions I've used it have been for investing small amounts of cash that weren't there when a large trade was done. For example I converted an entire account to a Vanguard fund but there was MMF interest that was posted at the end of that month to that account. The beginning of the next month I invested that cash in the same fund the following month. I appreciated Schwab's thoughtfulness in how it worked (without an additional transaction fee). My statements look clean without any "dangling" cash balance.
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