For many years, businesses have offered freebies to attract users to their services.
Take E*Trade, for instance. They would give you several free trades within a certain period after joining. Now, they’re pushing a 60-day commission-free trade offer. That’s great, but what if I’m not looking to actively trade? What if I’d prefer a few complimentary stocks?
Enter the latest wave of brokers. These new players are challenging the status quo much like online banks did with traditional banks by offering high interest and zero fees.
So, what’s their game-changer? Complimentary stocks. (or investable cash)
Here’s a rundown of brokers who provide free stocks upon registration:
Every firm here is affiliated with the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). The SIPC is like the FDIC for deposit insurance, capping at $500,000 ($250,000 for cash). Always opt for a broker with this coverage.
Moomoo
Run by Nasdaq-listed FinTech FUTU, Moomoo is a zero-charge trading application. Moomoo Financial Inc., the parent company, is overseen by both SEC and FINRA and is based in Palo Alto, CA. Their regulatory records can be accessed via FINRA’s BrokerCheck.
Moomoo’s enticing stock offer includes:
- Deposit $100 – $999.99: Receive 5 stocks + $100 (New customers only)
- Deposit $1,000 – $4,999.99: 15 stocks + $100 (New customers only)
- Deposit $5,000 or more: 15 stocks + $100 + one share of either $TSLA or $GOOG (New customers only)
There’s no need to trade, but you should retain the deposit for two months.
Webull
Webull operates solely through its app, providing commission-free trading. Their gifted stocks are legitimate. Upon account opening and funding, you’ll be awarded up to 12 stocks. These are from companies listed on NASDAQ or NYSE with at least a $2.5 billion market cap.
A small stake is usually given, but occasionally, you might score big, like a share of AAPL. Webull Financial LLC hails from New York City.
Deal Summary: Open and deposit to get a stock worth up to $1,600. No other stipulations, no deposit minimums, and zero-fee trades. It’s a worthy Robinhood alternative.
Robinhood
Robinhood, a familiar startup, was initiated in 2013 by two experts from the high-frequency stock trading arena. They offer commission-free trading of stocks and ETFs without maintenance fees.
They pioneered the free stock giveaway approach and still have the offer running. Robinhood Financial LLC is Californian.
Deal Summary: Obtain a free stock (worth $5 – $200), averaging around $10 in value.
SoFi Invest
SoFi Invest, SoFi’s trading segment, frequently runs promotions. Sign up for a new account, and you could receive a stock valued roughly at $25.
Public
Public offers zero-commission trading, allowing you to buy fractional stocks. They have an integrated social feature to view and follow others’ investments. They’re SIPC-insured up to $500,000 and offer interest on idle cash.
Using a specific link, signing up can earn you stock from nine significant companies.
Tornado
Tornado, or Nvstr Financial LLC, is based in NYC and was established in 2015. They present a hefty signup bonus and a unique learning feature for users.
Deal Summary: Free cash between $20 and $500. Trades cost $4.50 each with no other fees.
Taxing of Brokerage Free Stocks
The stock value you obtain from these brokers will be sent to you via Form 1099. This must be included in your tax return and is likely to be taxed as bank interest. When selling the stocks, you might owe capital gains tax.
For instance, if you acquire a $100-valued Wallet Hacks LLC stock, the broker will give you a Form 1099 worth $100 at year-end. Selling the stock at $110 means you’ll owe taxes on a $10 capital gain. You’ll face standard income tax on the $100 and capital gains tax on the additional $10.
Selling at a loss? You’ll still owe standard income tax on the $100, but can deduct the loss from any capital gains. If there are none, it can offset regular income.
Remember to allocate funds for tax purposes!
