Online stock trading companies are going to have to reconsider their business models as JPMorgan Chase, the nation’s largest bank, will soon begin offering 100 free trades per year to Chase customers.
It’s a big move for the bank, which previously charged $24.95 per trade, that’s putting noticeable pressure on share prices of low-costs services like E*Trade and Charles Schwab in early trading Tuesday. Robinhood Financial, the leading free brokerage service, is privately held.
Stocks, traditionally, haven’t been a primary focus for JPMorgan Chase, despite its immense customer base. Some 60 million Americans—nearly half of U.S. households—bank with the company.
JPMorgan Chase says it will officially roll out the service, called You Invest, next week. It will be available to any customer who downloads the company’s mobile banking app or uses its website, with no minimum balance requirements. The bank plans two services, You Invest Trade, giving users “total control of their trading” and You Invest Portfolios, which is more geared toward people who need assistance.
This is the latest push from JPMorgan to retain customers with free incentives. Two years ago, it offered the Sapphire Reserve credit card, which gave customers a 100,000-point sign-on bonus, a move that sparked a rewards battle in the credit industry.
You Invest will result in a similar reaction among trading companies. All customers will get free trades the first year. After that, though, the offer will become permanent for those with $15,000 in combined savings.
Customers with $100,000 or more in combined savings at the bank will get unlimited free trades.