Charles Schwab is eliminating online commissions for trading in US stocks

cnbc.com

22 pointsgshakir4 comments

Interest-ing - apparently it's enough to simply have all of that cash, like a savings and loan?

That's nice, but I wonder why they are doing that. Surely it has to benefit them in some way.

Good source for analysis on this sort of thing: https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...

tl;dr - 57% of Schwab's revenue comes from paying below-market-rate interest on customer cash and investing it in low-risk bonds and other instruments. Encouraging customers to trade means that accounts have more cash on hand to collect net interest payments on.

Very interesting, I was thinking something like that might be the case. Thank you.

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