WellsTrade: Free Trades With Easy Qualification

This is old news but since it wasn’t included when I gave TFB Awards three years ago I thought I’d mention it now. WellsTrade is an online brokerage service offered by Wells Fargo Investments, LLC. Its most attractive feature is 100 free trades a year.

To qualify for 100 free trades, you only need $25,000 in any combination of banking, brokerage, and credit balances with Wells Fargo (mortgage balance counts at 10%). The brokerage piece is the key. Bank of America also offers free trades but the qualifying balance has to be 100% on the banking side. You can’t use the brokerage balance to qualify.

100 free trades per account include open-end mutual funds in addition to stocks and ETFs. No other brokerage accounts let you buy Vanguard mutual funds for free. Small online broker Zecco offers free trades with $25k balance but the free trades don’t cover open-end mutual funds.

The catch with WellsTrade is that you have to open a Wells Fargo checking account. It’s a feature-rich checking account called PMA. The checking account is also free if you have $25,000 in the brokerage account. You don’t really have to use the checking account much, just enough to keep it open; Wells Fargo closes dormant accounts. If you do use it, it has quite a few freebies, although it doesn’t pay much interest.

The cash account in the brokerage account does not pay much interest either. It’s less of an issue now because even good money market funds don’t pay much.

Inside the brokerage account, the tax lots are tracked well. It offers specific lot identification, which helps minimize taxes. End of year statements and supplementary tax information are detailed and clear. Customer service reps are competent and helpful.

WellsTrade does not offer online trading for bonds. It wins the TFB Award 2009 for Best Brokerage Account for Stocks, Mutual Funds and ETFs.

To open an account, apply online, or call 866-243-0931.

Wells Fargo does not pay me in any way if you open an account.

Elsewhere on the Internet: FatWallet thread.

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  1. says

    Thanks for the heads up about 100 free trade with WellsTrade. Not that I’m doing much trading. The only security I have outside of 401k is in the vanguard mutual fund account. But that’s something to consider in the future.

    I do have a some tips about the PMA checking account. I am a long time Wells Fargo banking customer who has recently upgraded to PMA. The biggest benefit so far is they waive the fee for withdrawl on non-Wells Fargo ATM (4 withdrawl per month I think). I have gone to an international trip recently and it was sweet to withdraw cash for free that used to cost me $5 per transaction. The checking account actually pay higher interest than my saving account, although in either case it is pathethically low anyway. Also they offers free Bill Pay, something I really wish a few years ago. But I have since set up automatic payment with everyone so I’m staying put for now.

  2. says

    Thank you for bringing up the perks that come with the PMA checking account. Free cashier’s check, free traveler’s check, free checks forever (not just the first box), pretty much free everything. Just want to point out that the 4 non-Wells Fargo ATM withdrawals are free of only Wells Fargo fees. Wells Fargo does not reimburse ATM surcharges by other banks until you have $250k qualifying balance. Of course ATMs in other countries usually don’t charge a surcharge. In such case the withdrawals are free.

  3. says

    This brings up another question. Is there any advantage to held mutual fund in a brokerage account? One big draw back is I can’t do monthly investment to mutual fund because the relatively steep comission the brokerage charges me. This happens to one Vanguard fund I held in my 401k account. I have no problem making small monthly investment directly to my vanguard account. I guess this wouldn’t be a problem with WellsTrade but I wonder how does it work in general.

  4. says

    If you only have funds from one company, holding them in a brokerage account doesn’t give you much advantage. If you have funds from two or more companies and maybe ETFs in addition to funds, it’s more convenient to have them all in one place when you have free trades. At Wells Fargo, the higher brokerage balance also earns you more privileges on the banking side (e.g. ATM surcharge reimbursement).

    Except at WellsTrade, buying Vanguard funds outside Vanguard always costs money. Some companies like Fidelity have automatic investment plans that lower the commission. You pay the full commission once, or just transfer in the asset. Subsequent buys with an automatic investment plan are only $5 each. It’s still not free but not bad if you buy quarterly.

  5. KD says

    fee-free PMA account qualification has now changed:

    The PMA Package is free of the $30 monthly service fee for each month that one of the requirements in statement-ending balances is met:

    $25,000 or more in qualifying deposit accounts (checking, savings, CD, FDIC-insured retirement)
    $50,000 or more in qualifying deposit accounts, certain credit accounts (10% of outstanding eligible mortgages) and certain brokerage accounts (available through Wells Fargo Advisors, LLC). Deposit and loan products offered by Wells Fargo Bank, N.A. Member FDIC.

    TFB, what do you make of this move? I guess if one qualifies then there are still 100 trades for the taking. But I was afraid of this & hence did not get into it. Opened a Vanguard brokerage account. So far has worked alright for me.

  6. says

    @KD – For those who want to qualify with only brokerage assets, the requirement basically doubled from $25k to $50k. It’s still not that hard to qualify. With the free ETF trades offer from Vanguard, Fidelity, Schwab, and TD Ameritrade, the appeal of WellsTrade’s 100 free trades is somewhat diminished, but it’s still the best, because the free trades extend to all ETFs, not just a finite list, and they include all open-end mutual funds.

    I don’t like Vanguard’s brokerage service at all. Their heart is not at it. It doesn’t get serious attention or necessary investment from the Vanguard organization. Compare to Fidelity, Schwab, and TDA, where brokerage is their bread and butter, you bet the business gets all the attention it needs. WellsTrade is latching on to a full service brokerage platform (inherited from AG Edwards). The platform makes enough money for Wells Fargo so it gets the necessary investment in IT and operations support.

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