Schwab ETFs - Commission Free for Schwab Clients

With ETFs becoming more popular, Charles Schwab has introduced Schwab branded ETFs that are commission free to Schwab account holders. In addition, a comparison to other ETFs show that Schwab branded ETFs have the lowest expense ratio for 7 out of 8 ETF categories.

While I prefer ETFs to mutual funds for tax efficiency, it has not been cost effective to make numerous small purchases of ETFs due to a commission charge for each transaction, since ETFs traded like stocks,. However, with Schwab's new ETF offerings, it's cost effective to purchase as little as one share, since there is no commission charge .

Although I had begun to move funds out of Schwab accounts in 2008, I haven't completed the transfer, since there are CDs and bonds that won't mature until 2012, and I wanted to avoid the fee for moving securities. Now, with the new Schwab commission free ETFs, I will likely maintain a couple accounts at Schwab to take advantage of this cost effective way to invest in market indices.

Disclosures: Other than having brokerage accounts at Charles Schwab, I have no financial relationship with the company. No compensation was received for writing this article. No compensation is received for readers clicking on links within this article nor is compensation received for readers who open an account with Schwab.

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