BofA $0 Equity Trades Not Free!

Bank of America has been heavily marketing it's new $0 trades, but it's important to pay attention to the fine print.

In order to qualify for the free trades you need to have $25,000 in combined accounts with Bank of America. This $25,000 could be yielding ~5% in an internet savings bank like Emigrant Direct for you today. At Bank of America it will be yielding substantially less.

If we optimistically assume that your money will be earning 1% at Bank of America (based on some mix of checking/savings/cd deposits), you will be foregoing 4% of interest income every year, or $1,000 pretax. That is a lot more than free!

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