For many years, businesses have been enticing customers by offering complimentary items to sample their services.
Take for instance E*Trade, a broker that traditionally offered a slew of free trades for a certain period when you registered. Their current promotion is 60 days without commissions. But what if I have no interest in extensive trading? Maybe I’m just exploring and hoping for a couple of bonus shares?
Enter the latest generation of brokers. Similar to how online banks revolutionized conventional banking with attractive interest rates and zero charges, this new wave of brokers is challenging the established norms.
Their starting point? Complimentary stock. (or investment cash)
Consider these brokers providing bonus shares upon registration:
All the firms mentioned here are members of both the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). Think of SIPC as the FDIC’s counterpart, offering deposit protection up to $500,000 ($250,000 for cash). Always opt for a broker that’s insured.
Moomoo
Moomoo is an app offering free trades and is backed by the Nasdaq-featured FinTech FUTU. Parented by Moomoo Financial Inc. situated in Palo Alto, CA, it complies with both SEC and FINRA regulations. They’re listed on FINRA’s BrokerCheck.
Their enticing offer:
- Deposit $100 – $999.99: Receive 5 stocks + $100 cash (New users only)
- Deposit $1,000 – $4,999.99: 15 stocks + $100 cash (New users)
- Deposit $5,000+: 15 stocks + $100 cash + 1 share of either $TSLA or $GOOG (New users)
Keep the deposit for a minimum of 60 days; no trading necessary.
Webull
Webull, accessible only via app, charges no commissions. While their app is slightly advanced, the shares they award are authentic.
After account setup and funding, up to 12 bonus stocks await. These companies boast a market cap of at least $2.5 billion and are traded either on NASDAQ or NYSE.
Receive 12 fractional stocks by depositing $100. The majority of shares might be minor, but occasionally, you might snag a big fish. For instance, I’ve secured several ABEV shares and even an AAPL share.
Webull Financial LLC operates out of NYC.
Offer Recap: Set up and fund an account for a bonus stock worth up to $1,600. No other prerequisites; trading is complimentary. A worthy Robinhood alternative.
Robinhood
A renowned name, Robinhood, was founded in 2013 by two experienced traders.
With Robinhood, trade stocks and ETFs without any fees. Plus, they don’t levy maintenance charges.
Being pioneers in promotional free stock offers, they continue this tradition. Their base is in California.
Offer Breakdown: Secure a free stock (worth between $5 – $200), averaging roughly $10.
SoFi Invest
SoFi Invest operates under SoFi. They’re admirable due to free trades, cryptocurrency investments, and regular rewarding promotions.
On registering, a surprise stock amount (around $25) can be yours. Simply establish an account and engage in their interactive game for your reward.
The most straightforward promotion you’ll ever witness!
Public
Public stands out as one of the rare zero-commission platforms allowing any sum for stock purchase. The real-time settlement of fractional shares is a boon. With an integrated social feature, monitor other investors’ choices and strategies. Various strategic portfolios are also on offer.
SIPC protects your investment up to $500,000. Additionally, earn an interest on uninvested cash (2.53% APY on up to $10,000 as of 1/30/2020).
Registering via a desktop link gives you a $3-300 stock from major companies like Google, Apple, or Amazon. Instructions are sent via SMS.
Tornado
Tornado promises an attractive sign-up bonus, alongside a Learn & Earn feature that rewards users with up to $50 towards investment upon completing educational modules. Certain conditions apply.
Tornado, also identified as Nvstr Financial LLC, is NYC-based. It was established in 2015 by Bernard George and Patrick Aber.
Offer Summary: Acquire free cash ranging between $20 and $500. There’s no deposit minimum, but you need to keep the bonus for a year and make at least one trade to retain it. Each trade costs $4.50, and there are no hidden fees.
Taxation on Brokerage’s Free Stocks?
The stock value from these brokers will be reflected in Form 1099. This needs to be added to next year’s tax return, comparable to bank interest taxation. The valuation at the time of receiving determines the broker’s miscellaneous income recording. On selling, capital gain tax applies if sold at a profit and capital losses are deductible if sold at a loss.
Example: A Wallet Hacks LLC share worth $100 is awarded. A Form 1099 for $100 will be given by year-end. Selling for $110 means taxes on the $10 profit. The initial $100 is taxed as regular income while the $10 profit follows capital gain tax rules.
If sold at $90, incurring a $10 loss, the initial $100 is still taxable as regular income, but the $10 loss can be offset against any capital gains.
Remember to save some funds for your tax dues!
