Brokerage discounts through Costco?

November 13th, 2008 · 2 Comments

— This is a guest post by Dave

Did you know executive members can get a free $90.00 return on a $20.00 investment in as little as 4 weeks thanks to Costco?  ($70 for non-executive members.)  Not to mention a quarterly 25% rebate on investment transaction charges.  It’s all possible thanks to Costco’s relationship to the ShareBuilder brokerage.   Haven’t heard of ShareBuilder yet?   According to a ShareBuilder representative the company was formed in 1996 and they are now the third-largest US-based public brokerage (by number of transactions).  They’ve had a marketing relationship with Costco since the late 90’s.  In fact, Costco now recommends ShareBuilder for both a retail brokerage, plus a 401(k) plan for small companies.  (The 401(k) plan is outstanding IMO — ask me for a follow-up post if you want more details.)

ShareBuilder appears to have a lot of great features for people who are just starting to invest, or those who are implementing a periodic investment plan (also known as Dollar Cost Averaging.)   The first feature worthy of mention is that they allow purchases of fractional shares of any available stock or ETF.  Want to invest in Berkshire Hathaway but can’t afford the $100,000+ it takes to buy a share?  ShareBuilder will let you buy just a portion of a share!  And it is not only useful for buying BRK, it is extermely handy for those who are making investments in $50 or $100 chunks — you can put your money fully into the market right away.   Not to mention that this allows you to immediately re-invest your dividends from stocks and ETFs as if you were holding a mutual fund.

Another great feature is that their basic trading plan only costs $4 ($3 for Costco members) per transaction for purchases through their automated investment plan — with no minimum account balance.   While this is still a bit steep for someone investing $50.00 a pop, its much better than the fees at most other brokerages.   Plus if you know you’ll be doing more purchases in a month, there are monthly plans where your purchase cost can be as low as $1.00 each ($0.75 for Costco members!)  Note that selling your shares in all plans counts as a ‘Real-Time Transaction’ and thus incurs a $9.95/sale cost ($7.49 for Costco members), but that is still lower than almost all other brokerages unless you have a large account balance (like $50,000).  I should also point out that my Costco member pricing reported here is after the quarterly rebate has been applied.

Anyway, this post over at my recently started financial blog, gives more details about the offer plus the info you need to know to get started.

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Tags: Costco in Blogs · Coupons Share

2 Responses so far ↓

  1. 1 ShareBuilder Login // 2017.01.07 at 8:20 am

    Hey great post! I hope it’s alright that I shared this on my Facebook, if
    not, no problem just tell me and I’ll remove it.

    Either way keep up the great work.

  2. 2 pure acai berry supplements // 2010.01.27 at 2:53 pm

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