Many moons ago I opened my first brokerage account with ShareBuilder because they offered a $50 bonus for opening a new brokerage account. I’m a fan of free money, so I took them up on their offer. You were required to make a trade to receive the $50 bonus and since I was more or less playing with house money, I decided to roll the dice and I bought a few shares of Sirius Satellite Radio. I figured there was room for growth and the potential upside far outweighed the risk. After all, it was only $50 of free money!
Unfortunately, Sirius stock has languished in the depths of despair, and is only worth a small fraction of what I paid for it (roughly 25% at the time of writing). And that brings up one of the problems with ShareBuilder… their real time trade fees.
Why I am Moving Away from ShareBuilder
I believe ShareBuilder is a great company for growing wealth or building shares (hence the name). But it is not a great company for making real time trades. For example, ShareBuilder offers $4 scheduled trades (or even as low as $2 if you join one of their monthly premium plans). To take advantage of the low cost stock purchases, you just set up automatic trades to execute on a regular basis – weekly, monthly, semi-annually, whatever. This makes ShareBuilder an affordable company to use for dollar cost averaging. But real time trades are more expensive, ringing in at $14.95 each.
The difference in pricing is two fold: Setting regular trades reduces Sharebuilder’s costs, and the higher real time transaction fees encourage people to “build” their number of shares by holding them long term and reducing their turnover.
But in some cases, I think their business model is outdated, particularly their fee schedule for real time trades. For example, the cost of a real time trade was more than the value of the shares I wanted to liquidate. I would have had to pay money just to sell my Sirius shares. So I kept them and never really thought about them. After all, why would anyone want spend money to lose money! The good news is ShareBuilder doesn’t charge any inactivity fees or other associated account fees so leaving those shares alone didn’t hurt me. Or help me. Really, the $13 I would get for selling them is basically a nice lunch!
Why close my ShareBuilder account if there are no inactivity fees?
I still believe ShareBuilder is a good option for some investors, but I decided I wanted to be able to better control my costs for real time trades. Leaving my account open wouldn’t hurt anything, but again, it wouldn’t help me either. Fortunately, ShareBuilder recently ran a promotion code for free real time trades (See below). That made it easy to liquidate my shares. Then I decided to close my account in the interest of simplicity. Fewer open accounts makes managing money easier.
ShareBuilder coupon code free stock trades
ShareBuilder recently sent out a coupon code for five free real time stock trades. This is a great find because it’s fairly easy to find coupon codes to get a bonus when you open an account, but not quite as easy to find coupon codes for free trades once you have your account up and running. 5 free real time trades at ShareBuilder is worth just under $75, so if you are a ShareBuilder customer, this is the code for you!
Note: If you plan on opening a ShareBuilder account, first use this ShareBuilder Coupon Code to get a sign up bonus when you open your account, then use this code once your account is set up to take advantage of both the referral bonus and the free trades. You can also get a $100 ShareBuilder Bonus for Account Transfers if you are planning on transferring assets to ShareBuilder.
ShareBuilder free real time trades coupon code:
Sharebuilder Promotion Code for Five Free Real Time Trades: HVC09NY
It is good for about a month after you enter it, and your account will automatically track and record the free trades, which can be used for both buying and selling, by the way.
Other brokerage options
I still think ShareBuilder has its place, but there are many other online discount brokerages out there right now offering better alternatives. For example, I currently have active brokerage accounts with Zecco, TradeKing, and Scottrade. Of these, my favorites are TradeKing and Scottrade (I opened the Zecco account before they ended their free trades; I still have holdings there, but I no longer make new trades). I also have mutual funds and other investments with Vanguard and USAA.
$50 Cash Bonus at TradeKing. TradeKing is currently offering a $50 cash bonus for new customers. This is a limited time offer and a great opportunity to get paid to open a great brokerage account!
There are dozens of great brokerage firms out there, so be sure to examine your needs and evaluate online brokers before signing up for one. You will do better in the long run to keep most of your investments in one or two locations instead of having them spread out like I do!
Do you have a favorite brokerage firm?
Related Articles:
{ 12 comments… read them below or add one }
I actually have a Sharebuilder account and I have been reasonably pleased with it. It is useful because I have an ING savings account and you can link them so it makes transfering easy. If course I know you can link accounts on all of them too.
In the last 6 months I have traded options thru that account and it is a bit pricey. There is a charge for not only trade but for each contract. Because of this I will probably consider TradeKind down the road.
BMT, I also like that you can link the ShareBuilder and ING accounts, which is a great feature. You can make instant money transfers, which is great if you want to take advantage of same day trades (most brokerages take 2-3 business days to complete an ACH transfer).
But the pricing schedule pushed me away from ShareBuilder. The scheduled purchase plan comes in at $4 for a trade, and it has to be set up for an automatic purchase. I can go to TradeKing and make the same trade any day of the week for $4.95. Options transfers are only $0.65 per options contract. That kind of flexibility and lower cost for real time trades (and the host of other features) makes TradeKing a winner in my book! Here is a full TradeKing review for more information.
By the way, TradeKing is also offering a $50 cash bonus for new customers if you are interested in opening an account.
I think you got a little bit burned by ShareBuilder. I mean most stock trading companies have a ton of fees for trading. Like everything else in life fees add up and you loss money instead of gaining it. The market itself is still shaky and its just not a good time to be investing in the stock market.
I didn’t get burned, Tracy. I opened this account over 3 years ago and I got $50 in free stock. It was my fault for choosing poorly! I could have left the stocks in the account forever, but I decided to liquidate the account to simplify my accounts.
ShareBuilder racks up fees if you make a lot of real time trades, but if you plan on buying and holding, then it can be an affordable option. I currently prefer other options, however, because they are more affordable for real time trades.
Just an FYI – the code for the real time trades has expired and does not work.
Thanks for the info, Lynn. I did this about two weeks ago, but was slow publishing the article. I’ll see if I can find another code out there. I’ll be quicker to publish next time!
Oh, I just wanted to add that I use sharebuilder to buy stock for my children. I signed up myself using a promotion from Costco ($70) and then signed up my 2 children with acocunts and also got the bonus. Now I just buy “fun” stocks for the kids – McDonald’s, Hershey, Disney etc. At the beginning of the year they sent me a code for 12 free trades for each of my accounts (not real time but I don’t care about that) and now I just add a little bit of money and can make small trades as I want. I don’t plan on liquidating the shares anytime soon so maybe the trades will be free by the time the kids decide to cash their accounts out.
Sounds like a great plan, Lynn. ShareBuilder is a great place to buy stocks, especially if you plan on holding onto them for a long time. Hopefully they will change their fee structure in the near future to make them a better option for folks who trade more frequently. I think they are missing out on some business by charging more for real time trades than their competitors!
Not to mention, in ShareBuilder’s latest contest (ended August 6th) they encouraged fraud and cheating. Read about it in this article: http://ireport.cnn.com/docs/DOC-478946 Never ever do business this company.
Jordan, I read the article, and I bet there is more to the story than meets the eye. I don’t doubt there were people involved with buying votes, but the odds it was sanctioned by ShareBuilder are very low. It was probably a situation that wasn’t covered under the rules and ShareBuilder’s lawyers probably advised them not to pursue disqualifying those votes out of fear of a lawsuit (The iReport didn’t have a link to the rules and I wasn’t able to find them on ShareBuilder’s FB page). This is a situation where it is cheaper to pay the people off, then rewrite the rules for next time. Keep in mind many large corporations still don’t understand social media and the lengths people will go to to bend rules and leverage any available opportunity.
Based on the article I read, and ShareBuilder’s responses, it doesn’t seem to me like they encouraged fraud and cheating, rather than they allowed it because it wasn’t against the rules… and therefore by the rules may not have even been fraud or cheating, even if it was an undesired method of gaining votes.
Why would anyone schedule trades ahead of time on a regular basis. Don’t you need to watch how your shares are doing in order to know when to sell?
As of 11/10/10, the “HVC09NY” promo code doesn’t seem to be working on either my taxable or non-taxable (roth) brokerage accounts. Just a heads up.