Brokerage Fees in 2026: Where You're Still Paying

Schwab pays 0.05% APY on default uninvested cash through its Bank Sweep program. Fidelity's SPAXX money market fund yields roughly 3.29% as of early May 2026, tracking the 3.64% Fed funds rate net of the fund's expenses. Vanguard's VMFXX yields 3.64% — the highest sweep yield among major retail brokers. On a $50,000 cash balance, that's $25 (Schwab) versus $1,820 (Vanguard) per year — a $1,795 gap for doing absolutely nothing different. The gap widens with your balance and with every month short rates stay elevated.

This is not a rounding error. Schwab earns the spread between what it pays you and what it lends your cash for through its bank sweep program, and net interest income has been the primary driver of its post-TD Ameritrade profit recovery. When short rates cross 3%, every dollar of customer cash becomes a profit centre — for the broker, not the customer. Schwab's 2025 deposit-rate disclosures put the program at a stable 0.05% even as the 3-month T-bill (DGS3MO) sits at 3.68%; that 363-basis-point gap is policy, not coincidence.

Robinhood Gold members earn 3.35% APY, but the $5/month subscription means your first ~$1,800 in cash earns nothing net. Below that threshold, you're paying Robinhood for the privilege of earning market-rate interest on your own money. The Gold tier pays only when your cash balance clears a few thousand dollars — small-balance investors should skip it and buy a money-market ETF directly. Interactive Brokers pays 3.83% on USD balances above $10,000 — the most aggressive sweep rate among major brokers, with the catch that the first $10K earns 0%.

Rather than trust the marketing copy, run the cash drag math on your own situation. The formula is trivial: (Best sweep rate − Your sweep rate) × Idle cash balance = Annual drag. The spread between the best and worst sweep on the same dollar today is 359 basis points (VMFXX 3.64% vs Schwab Bank Sweep 0.05%). Multiply that by your average idle balance and the number is uncomfortable.

The table below shows the annual drag at four common idle-cash balances against the highest-yield default sweep currently available (Vanguard VMFXX at 3.64%). Use this as a benchmark — if your broker pays less than 3.64% by default, the gap below is your annual cost in foregone interest.

Idle Balance	Schwab Bank (0.05%)	Robinhood Free (0%)	SPAXX (3.29%)	IBKR >$10K (3.83%)	VMFXX (3.64%)	Drag vs VMFXX (Schwab)
$10,000	$5	$0	$329	$0 (under threshold)	$364	$359/yr
$25,000	$13	$0	$823	$575	$910	$898/yr
$50,000	$25	$0	$1,645	$1,532	$1,820	$1,795/yr
$100,000	$50	$0	$3,290	$3,447	$3,640	$3,590/yr

Three observations the table makes obvious. First, even small idle balances ($10K-$25K) produce hundreds of dollars in annual drag — this is not a high-net-worth problem. Second, IBKR's tiered structure (0% on the first $10K, 3.83% above) actually beats VMFXX once your idle balance exceeds roughly $80,000 — the breakeven is around $79,500 because IBKR's higher rate on the marginal dollar eventually swamps the dead-zone first $10K. Third, Robinhood's free tier matches Schwab on the uselessness of doing nothing — the difference is that Schwab is at least FDIC-insured via partner banks, while Robinhood's uninvested cash sits as SIPC-only.

The compounding case is more aggressive than it looks. A $100,000 idle balance earning 3.64% in VMFXX over five years compounds to roughly $19,560 in interest. The same balance in Schwab Bank Sweep at 0.05% earns roughly $250. Over a decade, the gap on a $100K balance is $42,950 versus $501 — enough to fund an entire IRA contribution every year on the foregone interest alone. The longer rates stay above 3%, the more the gap compounds — and futures markets currently price the Fed funds rate above 3% through at least Q4 2026.

Three workarounds if you don't want to switch brokers. (1) At Schwab, manually buy SWVXX (Schwab Value Advantage Money Fund, ~3.55% as of May 2026) instead of leaving cash in the default sweep. The yield matches Fidelity's SPAXX within 30 basis points. (2) At Robinhood, buy SGOV (iShares 0-3 Month Treasury Bond ETF, currently yielding ~3.6% net of expenses) — keeps your cash productive without paying the $5/month Gold fee. (3) At any broker, ladder 4-week T-bills directly through TreasuryDirect or via the broker's auction window — yields the full 3.68% with no expense drag and is state-tax-exempt for residents of high-tax states. None of these require leaving your broker; all of them close the cash drag gap by 95% or more.

The brokers that lose this line item — Schwab, E*TRADE, and Robinhood Free — make it up on net interest income from the spread. The brokers that win it (Fidelity, Vanguard, IBKR) are giving up that revenue to keep customers. Vote with the sweep.

Robinhood receives roughly $14.30 per 100 shares from Citadel Securities for routing your stock orders. Schwab gets about $9.50 per 100 shares from the same market maker. Fidelity and Vanguard accept zero payment for order flow on equities. That asymmetry shows up as execution quality.

Price improvement data tells the story. More than 75% of orders routed through legacy TD Ameritrade (now Schwab) execute at or better than mid-price. Only about 25% of Robinhood orders hit the same benchmark. The difference comes from how aggressively your broker negotiates execution quality versus how much revenue it extracts from the wholesaler on your behalf.

For a typical retail investor trading $200,000 in annual volume across 50-100 trades, the execution quality gap between Fidelity (no PFOF, strong price improvement) and Robinhood (high PFOF, weak price improvement) costs roughly $50-$150 per year. Not catastrophic for small accounts — but it compounds quietly, and it's money you never see leave your account.

Interactive Brokers splits the difference: its IBKR Lite tier accepts PFOF but charges no commissions, while IBKR Pro charges $0.005 per share and routes to exchanges directly for better fills. Active traders with larger order sizes should run the math on Pro. Passive investors placing a handful of market orders a year can safely ignore PFOF — the dollars just aren't meaningful at that frequency. The tell is your trading frequency: if you trade fewer than 25 times a year and only mega-cap names, PFOF is invisible to you in dollar terms even when it's measurable at the per-share level.

On a $20,000 margin loan held for one year, the cost ranges from roughly $1,366 at IBKR Pro to $2,665 at Schwab. That's a $1,299 annual difference — larger than most active traders spend on every other fee line combined. With the 10-year Treasury at 4.39% and the VIX at 18.29 — calm-but-not-complacent — leveraged equity exposure is expensive enough to need explicit justification on a marginal-cost basis. The rate you pay on margin is the hurdle rate your borrowed positions need to clear.

Robinhood Gold's 7.75% margin rate is genuinely competitive — the second-lowest among major retail brokers. Combined with the $5/month subscription, Gold pays for itself if you carry even a modest margin balance. Public.com's 8% rate is a close third. Interactive Brokers Pro still wins for active traders who prioritise execution routing alongside margin cost. Fidelity and Schwab remain uncompetitive here despite strong offerings elsewhere — and the gap doesn't narrow at the high end either: even at $1M+ balances, IBKR Pro's 4.83% beats Schwab's $1M-tier 9.825% by nearly five full points.

Stock commissions hit zero, but options contracts still carry per-contract fees at most brokers. The range: $0 at Robinhood, Firstrade, and Webull; $0.50 at Ally Invest; $0.65 at Fidelity and Schwab; capped at $10 per leg at tastytrade for heavy contract counts.

For an investor trading 20 options contracts per month, the annual difference between Robinhood ($0) and Schwab ($0.65 × 20 × 12 = $156) is modest. But heavy options traders executing 200+ contracts monthly face annual fees exceeding $1,500 at the $0.65 tier. That's where tastytrade's $10-per-leg cap and Public.com's options rebate program become the genuinely cheaper structures, not Robinhood.

The catch with zero-commission options at Robinhood: PFOF on options is where Robinhood makes most of its money. Options PFOF contributed $270.5 million to Robinhood's revenue versus roughly $72 million from equities. The wider bid-ask spreads on options magnify the execution quality issue. A trader saving $0.65 per contract in commissions may lose multiples of that in inferior fills — particularly on multi-leg spreads where each leg compounds the slippage. The math gets ugly fast: on a four-leg iron condor, even a 1-cent execution disadvantage per leg costs $4 per contract, dwarfing the commissions Robinhood is saving you on the same trade.

The low-frequency fees are the ones most investors forget about until they need to move money. They deserve a closer look because they're the easiest way for brokers to recover revenue lost to zero commissions.

Outgoing ACATS transfer fees are standard at $75 across Schwab, Fidelity, Robinhood, and E*TRADE. Merrill Edge charges $75 for full transfers, $0 for partials. Interactive Brokers charges $0 for full outgoing transfers — a quietly significant edge for anyone who might want to leave. If you transfer accounts even once a decade, IBKR's zero-fee policy is worth more than most of the fee differences elsewhere on this page.

Outgoing domestic wire fees range from $0 at Fidelity and Merrill Edge to $25 at Schwab and E*TRADE. International wires run $15 at Interactive Brokers up to $50 at Schwab. If you move cash via wire even occasionally, that's a $50-$100 annual gap nobody notices until the statement arrives.

Inactivity fees have mostly been phased out at the majors, but legacy accounts at smaller brokers can still be charged. Interactive Brokers eliminated its $10/month inactivity fee for individual investors in 2021 — a quiet win for small accounts that used to be penalised for exactly the buy-and-hold behaviour most investors are advised to practise.

Paper statement fees are a small but persistent annoyance: $2-$5/month at Schwab, Fidelity, and others unless you switch to electronic delivery. Take the email — it's the single easiest line item to eliminate.

Two more places brokers quietly extract revenue: transaction fees on non-NTF mutual funds, and spreads on fractional shares.

Transaction-fee mutual funds are the forgotten cost. Schwab charges $49.95 to buy a mutual fund outside its No-Transaction-Fee (NTF) list. Fidelity charges $49.95 on the buy side for non-NTF funds but $0 to sell. Vanguard charges $20 for non-Vanguard funds (waived for Flagship clients). If you build positions through periodic buys in a specialty fund not on your broker's NTF list, $49.95 per purchase compounds faster than most investors realise. The workaround: use the broker's NTF list (Fidelity's has 3,000+ funds, Schwab's has 4,500+) or substitute an ETF with the same exposure.

Fractional shares are marketed as the great equaliser — buy $25 of Berkshire Hathaway A-class, no problem. But the execution model varies wildly. Fidelity and Schwab fill fractional orders at the real-time market price with no meaningful spread. Robinhood fills fractionals at the NBBO but routes through market makers with wider spreads on less liquid stocks. Public.com and M1 Finance batch fractional trades at fixed daily windows — convenient for automation, but the batched price may deviate from the intraday mid by 10-20 basis points on volatile names. For $25 monthly contributions, the dollars are trivial; for $2,500 monthly rebalances, that's $50-$100 a year in invisible slippage.

The rule of thumb: if you're buying fractionals of mega-cap stocks (AAPL, MSFT, GOOGL), any broker works. If you're buying fractionals of less liquid names — small-caps, ADRs, thinly traded ETFs — stick to brokers that route fractionals at the NBBO in real time. Fidelity and Schwab win this line item; Public and M1 lose it in exchange for their automation conveniences.

Brokers are competing aggressively for asset transfers. The current standout offers as of May 2026:

Public.com pays a 1% cash match on transferred assets with no cap — move $100,000 and receive $1,000. They also reimburse up to $100 in transfer-out fees on balances above $5,000. Given Public's competitive margin rates and options rebate program, this is the most generous transfer offer in the market right now.

E*TRADE offers $50 to $150 for transfers of $5,000 to $99,999 (promo code OFFER26, expires June 30, 2026). Straightforward but modest compared to Public.

M1 Finance pays up to $4,000 on eligible transfers, though the 90-day holding requirement and tiered structure mean most investors qualify for significantly less than the headline number.

Merrill Edge offers up to $1,000 for Bank of America Preferred Rewards tier members — useful if you already bank there.

The economics of switching are increasingly favourable. Most brokers support in-kind transfers — your positions move without selling, so no tax events. The outgoing transfer fee (typically $75 at Schwab, Fidelity, Robinhood, and E*TRADE) is routinely reimbursed by the receiving broker on qualifying balances. If your current broker's cash sweep costs you $1,500 per year in foregone interest, a transfer bonus is just the cherry on top of a move that already pays for itself in the first quarter.

There is no broker that wins every line item. The cheapest broker for your account depends on two variables: how much idle cash you carry and how you trade. The decision tree below maps both axes to the lowest-total-cost broker for the most common account profiles. Use it as a starting point; adjust for any line item that matters disproportionately to you.

Profile 1: Buy-and-hold investor, $10K-$50K, mostly index funds. Winner: Fidelity. SPAXX auto-sweep at 3.29% means cash works without intervention. Zero-fee mutual funds on FXAIX, FZROX, FZILX. No PFOF on equities. $0 wire fees. The annual all-in cost on a $25K account is roughly $0 in explicit fees and well under $50 in implicit execution costs.

Profile 2: Buy-and-hold investor, $100K+, mostly Vanguard funds. Winner: Vanguard. VMFXX at 3.64% is the highest default sweep among majors, $0 trades on Vanguard mutual funds and ETFs, the cost-cutting cycle continues to compress expense ratios on the index lineup. The platform feels dated, but on the math it's hard to argue with a $3,640/year sweep yield on $100K idle.

Profile 3: Active equity trader, $25K-$250K, 50-500 trades/year. Winner: Interactive Brokers Pro. $0.005/share commissions with direct exchange routing, 4.83-5.83% margin (lowest in the industry), 3.83% on idle USD above $10K, and zero outgoing transfer fees mean you can leave anytime without penalty. The tradeoff is the platform — Trader Workstation has a learning curve that Lite/IBKR mobile partially mitigate.

Profile 4: Heavy options trader, 200+ contracts/month. Winner: tastytrade. $10-per-leg cap on commissions becomes the cheapest structure once you cross roughly 16 contracts per leg per trade. Strong analytics for spreads. The cash drag is the price you pay — sweep yields are weak, so don't park material cash there. Public.com is a reasonable second choice if you want the options rebate program and more flexibility on cash.

Profile 5: Set-and-forget automation, monthly contributions, $5K-$50K. Winner: M1 Finance. Pie-based portfolio rebalancing, automatic dividend reinvestment, scheduled contributions. The $3/month fee on accounts under $10K is the gotcha — if your balance is below that threshold and the cash drag from the platform's batched trading windows is meaningful, Fidelity is a cleaner choice. M1's 8% margin (M1 Plus) is competitive but doesn't beat IBKR or Robinhood Gold.

Profile 6: Margin-heavy trader, leveraged equity exposure $50K+. Winner: Interactive Brokers Pro. The margin-rate gap to anyone else is structural. On a $100K margin balance, IBKR Pro's 4.83% versus Schwab's 13.325% is an $8,500 annual difference. There is no scenario where Schwab's brand premium is worth $8,500 a year. Robinhood Gold at 7.75% is a distant second for sub-$50K margin balances where IBKR's tiered structure penalises small accounts.

Profile 7: Mobile-first young investor, $0-$10K, learning to trade. Winner: Robinhood Free or Webull. At small balances, the cash drag math doesn't matter much in absolute dollars (under $400/yr even at the worst sweep), and the UX gap to a full-feature broker is genuinely useful for learning. Migrate to Fidelity once balances cross ~$15K and the cash drag becomes meaningful, or directly to IBKR if active trading habits develop.

Profile 8: Bank-of-America customer, $50K+ across deposits and brokerage. Winner: Merrill Edge. Preferred Rewards tier credit-card multipliers and $0 partial transfers offset Merrill's middling sweep yield, especially if you're consolidating relationship balances for rate discounts on mortgage or HELOC. Standalone, Merrill is unspecial; as a relationship-banking play it makes sense.

The cross-cutting rule: the broker that costs you most is rarely the one with the highest sticker fee — it's the one whose default settings (cash sweep, fund execution model, margin tier) silently extract the most basis points from idle or leveraged dollars. Run the cash drag math from the prior section, look up your actual margin tier if you borrow, and the right answer is usually obvious within 60 seconds.