Free stock from a broker is real money, but a sign-up share is often worth a few dollars. The broker you pick may hold your investments for decades. Shortlist online brokers by their costs, the funds they sell, and the account you need, then take a free-stock offer only from a broker on your shortlist.
A sign-up share pays you once. The broker’s fees and choice of funds affect you every year you stay, and any charge for moving your account out comes due the day you leave.
You can get free stock four ways. Brokers give shares to new customers who open or fund an account, as Webull’s free-share offer does, and to current customers who refer friends. Stash’s Stock-Back debit card pays rewards in stock, and Acorns invests the rewards you earn shopping with its partner brands.
The shares tend to be small, and they come with conditions. Robinhood’s sign-up stock is worth $5 to $200, and about 99% of new customers get the minimum. You can sell the share after 3 trading days, but you can’t withdraw its cash value for 60 days. It also comes only with an individual taxable account, not an individual retirement account (IRA). Any tax on it is yours, and its value may show up on a 1099 tax form.
So make the choices in this order:
- Pick the account you need, an IRA for retirement savings or a taxable account for other goals.
- Shortlist online brokers that offer that account with no commissions on stock and fund trades, no account fee, the funds you plan to buy, and a low fee to move your account out.
- Compare the current brokerage account bonuses among the brokers left on that shortlist.
Skipping that order can turn a free share into a loss. Say you take an $8 share from a broker that doesn’t carry the funds you want and charges $75 to transfer an account out. Paying the fee to move the account leaves you $67 behind. A fractional free share, a slice of one share, can’t transfer to another broker, the brokerage regulator FINRA notes, so you’d have to sell it first.
Take a free share only from a broker you’d have opened without it.
Find that broker among the best online brokers for beginners.
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