Schwab $300 for $25k, Am I a Sucker?

BLUF: Dave has the right idea for $100 for $1k for a better return at 10% return. There is alot of anxiety to lock up $25k for a year, but 1.2% is still pretty good on $25,000 if you plan on putting it into Schwab’s new super discount funds.

So the deal with Schwab is still on, but after talking to the Customer Service Rep, turns out I need to maintain the balance for a whole year or they will claw back the bonus! The link for the offer is here. The fine print is here:

Offer valid for individuals who do not have a Charles Schwab & Co., Inc. (“Schwab”) account (other than a Stock Plan Services account) and who open and make a qualifying net deposit into an eligible retail brokerage account within 45 days of enrollment in the offer. Net deposits are assets deposited into the enrolled account minus assets withdrawn from the account and transferred out of Schwab. Only outside assets new to Schwab qualify; assets transferred from affiliates other than Schwab Retirement Plan Services are excluded. Net deposits will be calculated as of the 45th day after enrollment, and the cash bonus will be credited to the enrolled account within approximately one week. For taxable accounts, you must maintain the net deposit amount (less any market losses) at Schwab for at least one year or Schwab may charge back the cash bonus.

Schwab reserves the right to change the offer terms or terminate the offer at any time without notice. The offer is limited to one per account, with no more than one account enrolled per client. The offer does not apply to accounts managed by independent investment advisors, the Schwab Global Account™, ERISA-covered retirement plans, certain tax-qualified retirement plans and accounts, or education savings accounts. The cash bonus, when combined with the value received from all other offers in the last 12 months, may not exceed $5,000 per household, as defined in the Charles Schwab Pricing Guide for Individual Investors. The offer is not transferable, saleable, or valid in conjunction with certain other offers and is available to U.S. residents only. Employees, contractors, or persons similarly associated with Schwab or a Schwab affiliate; their spouses; and employees of any securities regulatory organization or exchange are not eligible. Schwab may decline requests to enroll in the offer at its discretion. Other restrictions may apply.

I used these codes: “SchwabWelcome11” for $100 to $500 bonus for $10,000 to $100,000 deposit or roll over made within 45 days and held for ONE YEAR, and then code “REFER” for another $100 for at least $1,000 held for a whole year. Sorry for any confusion!

Of course just in time to have $25K idling comes Schwab’s new line of low and lower cost mutual funds coming out later this year:

Symbol Name Current Operating
Expense Ratio
3/1/17
Operating Expense Ratio
SCHP Schwab U.S. TIPS ETF™ 0.07% 0.05%
FNDB Schwab Fundamental U.S. Broad Market Index ETF 0.32% 0.25%
FNDX Schwab Fundamental U.S. Large Company Index ETF 0.32% 0.25%
FNDA Schwab Fundamental U.S. Small Company Index ETF 0.32% 0.25%
FNDF Schwab Fundamental International Large Company Index ETF 0.32% 0.25%
FNDC Schwab Fundamental International Small Company Index ETF 0.46% 0.39%
FNDE Schwab Fundamental Emerging Markets Large
Company Index ETF
0.47% 0.40%

I will take the bait an try out their new super saver fund series that are getting pretty low in expenses:

Symbol Name Current Operating
Expense Ratio 
5/1/17
Operating Expense Ratio
SFLNX Schwab Fundamental US Large Company Index Fund 0.35% 0.25%
SFSNX Schwab Fundamental US Small Company Index Fund 0.35% 0.25%
SFNNX Schwab Fundamental International Large Company Index Fund 0.35% 0.25%
SFILX Schwab Fundamental International Small Company Index Fund 0.49% 0.39%
SFREX Schwab Fundamental Global Real Estate Index Fund 0.49% 0.39%
SFENX Schwab Fundamental Emerging Markets Large Company Index Fund 0.49% 0.39%

They even have a few bond ones that look interesting:

Symbol Name Operating Expense
Ratio
SWAGX Schwab® U.S. Aggregate Bond Index Fund 0.04%
SWSBX Schwab® Short-Term Bond Index Fund 0.06%

But here are the super cheap ones that are cheaper than Vanguard:

Schwab Fund Name Expense Ratio
SWTSX: Schwab Total Stock Market Index Fund® 0.03%
SWPPX: Schwab® S&P 500 Index Fund 0.03%
SNXFX: Schwab 1000 Index® Fund 0.05%
SWSCX: Schwab Small-Cap Index Fund® 0.06%
SWISX: Schwab International Index Fund® 0.07%
SWRSX: Schwab® Treasury Inflation 0.05%

Now I also don’t want to replicate my TSP and be biased to American equities as well as developed nations. I am seriously considering an ETFs like Meb Faber’s Cambria ETFs to fill the missing global assets that TSP does not cover.

ETF Name Expense Ratio
Cambria Shareholder Yield ETF (SYLD) 0.59%
Cambria Foreign Shareholder Yield ETF (FYLD) 0.59%
Cambria Global Value ETF (GVAL) 0.59%
Cambria Global Momentum ETF (GMOM) 0.59%
Cambria Global Asset Allocation ETF (GAA) 0.29%
Cambria Emerging Shareholder Yield ETF (EYLD) 0.69%
Cambria Value and Momentum ETF (VAMO) 0.59%
Cambria Sovereign Bond ETF (SOVB) 0.59%

Good luck out there!

-Derp

 

2 Responses to Schwab $300 for $25k, Am I a Sucker?

  1. Derp brought up an interesting point off-line: If you want to just churn this akin to a CD yielding 10% you could put it in SWRSX which is the Treasury’s Inflation Protected Securities or TIPS to hedge against inflation, it doesn’t yield very much right now but is designed to ramp up yield if the fed raises rates.

    If you’re considering annually transferring / churning these (which it’s very easy to transfer over an entire brokerage or IRA account) and have a longer investment horizon, Those Cambria ETFs are probably the best funds in their associated investment style as long as they match your investment horizon and risk tolerance. I personally prefer $GVAL, but I am a Global CAPE / Value-phile

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