Charles Schwab, in a move to make itself more attractive to UK investors, is cutting online equity trade commissions later this month, the US firm said yesterday.

From 19 January, Schwab retail investors will pay just $8.95 per online trade in stocks. Formerly, investors who held less than $1 million in household assets at Schwab or who traded fewer than 120 times per year paid $12.95 per trade plus charges for trades larger than 1000 shares. 

The move comes as financial institutions of different types, ranging from brokerages to hedge funds, have been under pressure to trim fees in an increasingly harsh competitive landscape. Even a relatively modest fee can make a substantial dent in overall investment returns when compounded over time.

A minimum $10,000 deposit is required to open a Schwab One International Account.