Low Cost Broker with no Regular/Custody Fees

Finance, Taxes, Banking, Insurance and Retirement
1
Hi, can anybody recommend a low cost broker with no regular annual fees, custody fees or similar? I only trade very occasionally so would prefer slightly higher trading fees but no regular fee

i.e. something like Interactive Brokers but without the $10 USD minimum per month

I'm looking for something based outside of Switzerland because I've found with Swissquote you have to pay a 0.15% Swiss stamp duty both when you buy and sell, even if you're not buying on the Swiss exchange. If I use a UK based broker I understand I won't have to pay that extra combined 0.3%

Thanks!

2
Schwab, TDameritrade google is your friend

3
Here are some German banks which offer mostly free account/portfolio keeping combined with low transaction fees on their brokerage services:

www.ing-diba.de www.dab-bank.de www.comdirect.de www.cortalconsors.de I ́m sure there are more, also in other countries.

Good luck in finding the one which suits you

4
Can one open an account as non-German resident from Switzerland? I also heard Interactive Broker is the cheapest for us in Switzerland....have to research more...

5
I managed to open www.comdirect.de from CH myself.

I know people from Switzerland who opened www.dkb.de (only a bank, not a broker as far as I know). (EDIT: Just saw they also offer brokerage)

So in general it ́s possible, yes.

6
I have switched to interactive brokers and am very, very happy. The $10 minimum, means i have to spend about $120 in fees per year. (although your first 3 months at IB have no minimum) I also am a buy and hold trader and still find that IB offers an amazing value for the money. My previous trading method was to use a currency exchange like xe.com to send money to my bank account in the USA, where i would send it to my broker.

1) I have found that the spread and fee savings at IB more than compensates the $10 fee per month. I have between $1000-2500 per month for savings/investments that i manage to save. Xe.com has been charging me about 1.5 % commision. This means they take about $15-$37 per month. Plus I would need to pay a commission to a broker when buying shares. (between $7-10 per trade) IB gives an exchange rate thats extremely close to the interbank rate and charges $2. For me that means the other $8 that I need to spend at IB to reach the minimum is "house money"

2) IMO you are way more safe if you take positions in 8 different companies per month at small lot sizes than taking a larger position once a month in one.

7
I am amazed you can find 8 companies a month worth investing in, to find 8 great company's a year worth buying is good going. I don't like diversification if it means investing in bad companies.

8
There are plenty of good, blue chip companies that constantly grow their earnings, increase dividends, etc. I keep a list of my favorite stocks and track their price movement. I usually spend about 150-200$ per company and dollar cost average into them. That way, if for example I bought some Coke at $43 and the fair price is $35, I wont be hurt too bad that I overpaid if I only bought 4 shares. I also don't lose sleep tracking the movements every day. Since I am a long term investor, the dividends and the long term growth of the company will get me more than even.

9
I think you can't really find cheaper/better than Interactive Brokers. Or do you know of any?

They are based in the USA but you can fund and have one free withdrawal per month via a euro account.

Their assets are diversifies between like 13 banks.

10
However your dealing costs are huge relative to your investment, you will even pay over the odds buying an 'odd lot' i.e not 100 shares.

What do you mean by 'their assets', I think you mean your assets that should be held in a segregated account, not the property of a bank.

11
I have not had problems buying odd lots. I set a limit price and IB has no problem executing at this price. Secondly, I have already said, I consider the $8 that I spend "free money" because I saved by buying dollars through IB. The higher dealing costs in this case are welcome because it increases my tax base for the transaction. (slightly fewer capital gains taxes) By spending more than $10 total in fees at IB each month, then the strategy is much less beneficial.

12
I suspect you would do better buying an EFT, but then pay more tax

Odd lots will always cost an extra few cents, that adds up over time.

13
I'm making my own ETF

14
Well, I guess a big brokerage firm is supposed to have some sizable assets on their own as well, besides customer's assets. I don't know.

Here is the link: https://www.interactivebrokers.com/en/?f=ibgstrength

Thanks for the correction.

15
The only risk comes if they trade on their own account, if they are just executing deals for customers who have deposited cash, then they are at no risk. It's cash deposits that get pooled between 13 banks.

16
Thanks for the info. I didn't know IB did currency conversions at the interbank rate which is an amazing deal

17
Is there an easy way to describe IB ́s fees especially for low-volume traders?

I know they can be looked up on their website, but I ́m looking for all the hidden crap which you only find out after already being a customer, i.e. from experience.

Also, do they happen to offer a US$ CreditCard, or is it purely trading?

Last but not least, how are funds moved in and out?

Thanks for any possible input

18
For what I am concerned you move funds in and out to and from their euro account (Or US account; not applicable for our purposes) - which you can cheaply exchange to USD on their platform - exchange fee: USD 2.50 or something like that. One free withdrawal a month. Consequential euro withdrawals are also just 1 euro; pretty decent.

Only trading, no card.

Disclaimer: I don't have the account so further verification would be fine here as well.

19
1) I have found that the spread and fee savings at IB more than compensates the $10 fee per month. I have between $1000-2500 per month for savings/investments that i manage to save. Xe.com has been charging me about 1.5 % commision. This means they take about $15-$37 per month. Plus I would need to pay a commission to a broker when buying shares. (between $7-10 per trade) IB gives an exchange rate thats extremely close to the interbank rate and charges $2. For me that means the other $8 that I need to spend at IB to reach the minimum is "house money"

How do you know that they use interbank rates, do you have some sort of proof from them and have you checked the out with an actual FX deal y

20
1) I have found that the spread and fee savings at IB more than compensates the $10 fee per month. I have between $1000-2500 per month for savings/investments that i manage to save. Xe.com has been charging me about 1.5 % commision. This means they take about $15-$37 per month. Plus I would need to pay a commission to a broker when buying shares. (between $7-10 per trade) IB gives an exchange rate thats extremely close to the interbank rate and charges $2. For me that means the other $8 that I need to spend at IB to reach the minimum is "house money"

How do you know that they use interbank rates, do you have some sort of proof from them and have you checked the out with an actual FX deal you transacted with them?

I ask this because I do FX deal with UBS every month (CHF/GBP) and I know their rates are not the best but at least it's more secure than a broker (correct me if I'm wrong) and easy to control the flows of cash as I have CHF and GBP account and send the cash to UK from the GBP account.