Some brokers offer 'honeymoon' rates as an incentive to get you to sign up to their platforms but the deals are not always as good as they look. Here is Your Money Magazine's assessment of some of the current discount offers.
The deal: get $600 worth of brokerage when you sign up
The terms: this entitles you to up to 12 free trades or up to $600 worth of brokerage. The trades must be used by 31st October (two months) and can’t be used for trades which exceed $50,000 or $55 in brokerage.
The reality: to get the full $600 you would need to run up a $50 brokerage fee each time you trade, that's over $40,000 per trade.
The deal: join and receive $750 worth of brokerage
The terms: this offer was actually out of date when we found it on the NAB website: “Offer applies to new NAB OnLine Trading accounts opened between 12 November 2010 and 31 July 2011 via the apply now button on this webpage.” This offer was still being advertised on 31 August. It gave six weeks from the time of account activation to use the $750 bonus. NAB would issue a rebate of up to $29.95 per trade – but the rebate could take up to seven weeks!
The reality: to get the full $750 you’d have to make 25 trades in six weeks. It doesn’t specify how ‘up to $29.95 per trade’ is determined.
The deal: join and receive $600 worth of brokerage
The terms: Westpac will rebate the first $50 of brokerage charged on each contract note for your first 12 online share trades. Must be used within 60 days of your account being opened, and can be up to a total value of $600
The reality: to get the full $600, you will need to make 12 trades in 60 days, each one worth over $45,000
Online brokerage 'honeymoon' offers are not different to those you come across from credit card or mortgage providers. They don't necessarily deliver good value, even before the honeymoon is over! When it comes to finding the best online broker, think about your needs first and then find the deal that will keep delivering
Collections: Mortgage News