May 16, 2018

Charles Schwab Review: Is It a Good Brokerage?

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Charles Schwab is one of the oldest names in the world of investing. With something for investors of all levels, it's often the go-to brokerage for investors looking for a new broker.

Overall Score

4.2

Stock Trading

4.5

Options Trading

3.5

Mutual Fund Trading

4.0

Online Platform

5.0

Banking

5.0

Mobile App

3.5

Commissions and Fees

3.0

Ease of Use

4.0

Research

5.0
5-point scale (the higher, the better)

Pros and Cons

  • Vast selection of commission-free ETFs and mutual funds
  • 2 platforms (one for beginners and one for advanced traders)
  • 24/7 customer service including online chat
  • $1,000 minimum to open a brokerage account
  • Commission costs on mutual funds outside of the commission-free funds
  • Robo-advisor option requires a minimum investment of $5,000

Bottom Line

Good choice for beginning and advanced investors looking to invest in ETFs and mutual funds or investors that require extensive research

Charles Schwab began in 1973 and has since evolved into today's affordable brokerage with a robust menu of services. Keeping up with the competition, Schwab recently slashed their commissions while still providing around-the-clock customer service, staying within their mission to "put the client first."

Keep reading to see if this big-name broker is the right choice for you.

Who is Charles Schwab Good For

Investors all over the spectrum can benefit from a Charles Schwab brokerage account. Whether it's your first rodeo or you are an active trader, there are benefits to using Charles Schwab for many different investments.

Whether you open a taxable account or you are saving for retirement, Charles Schwab offers one of the largest amounts of commission-free investments along with low commission stock trades. They offer the resources to help you build a diversified and robust portfolio while helping you save money as you execute trades.

If having hundreds of choices at your disposal doesn't overwhelm you, this brokerage could provide you with everything you need. Thanks to the multiple platform options and robust research they offer, we think it's a great option for the first-time investor as well as the day trader.

What Type of Investments Do They Offer?

At Charles Schwab, you'll find the following types of investments:

Schwab offers transparent pricing and no account service fees. They offer individual/joint brokerage accounts as well as traditional/Roth IRA accounts.

Keep in mind, though, that the minimum investment required to open a Charles Schwab brokerage or retirement account is $1,000. This is on the high side when compared to its competitors. They do offer the option to waive the minimum deposit requirement with regular monthly automatic deposits, but they don't mention the required amount to waive this requirement.

Reasons We Like Charles Schwab

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  • They offer low cost commissions. Schwab offers some of the lowest commissions amongst online brokers today. Rivaled by Fidelity, which offers matching commissions, Schwab keeps their costs down while not forcing you to sacrifice other features, such as a robust trading platform and quality research.

  • The Schwab StreetSmart.com is a great platform for beginners. It's no secret that beginning investors can get easily overwhelmed handling investments on their own. The StreetSmart.com platform offers a simple, yet robust, interface that users can use to their advantage.

  • The StreetSmart Edge offers a more sophisticated platform for advanced traders. Experienced active traders will enjoy the customization and charting options in the more advanced desktop-based StreetSmart Edge platform.

  • There are many robust research options available. Investors are given a variety of research options, including equity ratings from Schwab as well as research from reputable third-parties such as Morningstar and Market Edge. You'll have access to real-time news as well as videos and articles from the industry experts.

  • Investors can have 24/7 customer support. Schwab offers the unique benefit of 24/7 phone or online chat support. The wait time is usually fairly short for live support as well. If you prefer email support, you'll have to log into your account and send a secure message; they do not offer individual email addresses.

  • You can visit more than 300 physical Charles Schwab branches. If you prefer in-person assistance, you can visit your local Charles Schwab branch.

  • You'll have access to more than 200 commission-free ETFs and 3,000+ commission-free mutual funds. Schwab claims to have the ETFs with the lowest expenses in the industry along with no upfront commission costs. Not only is their selection vast, but they make it easy to screen and locate the investments you desire.

  • Hands-off investors can use Schwab's robo-advisor for automatic investing. If you just don't have the time or patience to handle your own investments, the Schwab Intelligent Portfolios can invest and rebalance your accounts for no advisor fee, service fee or commissions.

  • You can sync your accounts via multiple platforms. You can access your accounts via the web, mobile app, or desktop app at any time and see the same information. You can see the changes in real-time, accessing your information anywhere you go.

  • You can bank with Schwab and link the accounts to your brokerage account. Schwab offers a variety of banking services, including checking and savings accounts. Once you link your banking and brokerage accounts, you can transfer funds for immediate use.

Reasons You May Want to Look Elsewhere

  • You do need at least $1,000 to open an account. Beginning investors often have little to get started with, but want to get the ball rolling. The need for $1,000 to start can be too high for some investors; this is an area where several competitors can gain the business as they don't require a minimum opening balance.

  • If you want to buy a transaction-fee fund, the commission is hefty. If you have your heart set on a specific mutual fund that is not a part of the no-load funds, the commission is hefty, at $76 per purchase.

  • You need at least $5,000 to use Schwab's robo-advisor. While we think it's great that Schwab offers a robo-advisor for those investors who prefer to let someone else make choices for them, the minimum opening deposit is much higher than its competitors.

How They Compare

Schwab vs Fidelity: These two brokers are neck-and-neck when it comes to commission fees, as they both charge $4.95 per trade. They both also offer robust research options. Where Schwab shines, though, is in their vast offering of commission-free ETFs and mutual funds.

 

Charles Schwab

Fidelity

 

Benefits and Features

Stock Trading
$4.95 per trade
$4.95 per trade
Options Trading
$4.95 + $0.65 per contract
$4.95 per online trade, plus $0.65 per contract
Minimum Deposit
$1,000
$0
Mutual Fund Trading$0 for no-transaction-fee funds $76 for all other funds$0 transaction fee for Fidelity funds
$0 on purchase for NTF (no transaction fee) non-Fidelity funds. ($49.95 on redemption if held less than 60 days)
$49.95 on purchase for non-Fidelity funds; $0 on redemption. (Certain funds may have a $75 transaction fee).
Commission Free ETFs
200+
265 including 25 Fidelity factor, sector, stock, and bond ETFs and 240 iShares® ETFs
Broker Assisted Tradesonline pricing + $25.00 service charge$32.95 per trade for representative-assisted trades.
Customer Service
24/7
(800) 343-3548
Inactivity Fee
None
$0
Maintenance Fee
$0
$0 account service fee
Banking
Yes
Fidelity Cash Management Account includes reimbursed ATM fees, no monthly fee, no minimum balance requirement, FDIC insurance, mobile check deposit, free billpay and free checkwriting.
Mobile App
Yes
Desktop App
Yes
Active Trader Pro (requires you trade 36 times or more in a rolling 12 month period)
Futures Trading
$1.50 per contract
 
Locations
300 locations
More than 180
Online Community
Yes
 
Seminars
Yes
 
Virtual Trading
No
Stock Trading
Options Trading
Mutual Fund Trading
Online Platform
Banking
Mobile App
Commissions and Fees
Ease of Use
Research

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

Charles Schwab: Pricing information from published websites as of 4/16/2018

Fidelity: Pricing information from published website as of 02/28/2017

Schwab vs TD Ameritrade: If the $1,000 account minimum is too high for you, TD Ameritrade may offer a better option with their $0 minimum. TD Ameritrade also gives Schwab a run for their money with their almost equal amount of commission-free ETFs.

 

Charles Schwab

TD Ameritrade

 

Benefits and Features

Stock Trading
$4.95 per trade
$6.95 per trade
Options Trading
$4.95 + $0.65 per contract
$6.95 + $0.75 per contract
Minimum Deposit
$1,000
$0
Mutual Fund Trading$0 for no-transaction-fee funds $76 for all other funds$0 for no-transaction-fee mutual funds
$49.99 for no-load mutual funds
$0 for load mutual funds
Commission Free ETFs
200+
300+ Commission-Free ETFs
Penny Stocks 
Broker Assisted Tradesonline pricing + $25.00 service charge
$44.99
Customer Service
24/7
(800) 669-3900
Inactivity Fee
None
$0
Maintenance Fee
$0
$0
Banking
Yes
Cash Management account offers free ATM withdrawals, no monthly maintenance fees, free online bill pay, and free check writing.
Mobile App
Yes
Desktop App
Yes
thinkorswim
Forex Trading 
Futures Trading
$1.50 per contract
$2.25 per contract (plus exchange & regulatory fees)
Locations
300 locations
More than 100 locations in 34 states
Online Community
Yes
 
Seminars
Yes
Online webcast
Virtual Trading
No
Paper Trading to practice/test strategies and ideas.
Stock Trading
Options Trading
Mutual Fund Trading
Online Platform
Banking
Mobile App
Commissions and Fees
Ease of Use
Research
Online Community
Trading Platform

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

Charles Schwab: Pricing information from published websites as of 4/16/2018

TD Ameritrade: Pricing information from published website as of 03/13/2017

Schwab vs Vanguard: If you need minimal handholding and don't need a robust trading platform, Vanguard offers a viable option that also doesn't require a minimum opening balance. Active or complex traders, however, will prefer Schwab's trading platforms over Vanguard's.

 

Charles Schwab

Vanguard

 

Benefits and Features

Stock Trading
$4.95 per trade
Less than $50,000: $7 per trade for the first 25 trades per year, then $20.
$50k - $500k: All trades $7.
$500k - $1M: All trades $2.
$1M - $5M: First 25 trades per year free, then $2.
$5M+: First 100 trades per year free, then $2
Options Trading
$4.95 + $0.65 per contract
Less than $500,000: $7 + $1 per contract.
$500,000+: $2 + $1 per contract
Minimum Deposit
$1,000
$0
Mutual Fund Trading$0 for no-transaction-fee funds $76 for all other funds$0 for no-transaction-fee funds. For transaction-fee funds: $20 for account balances less than $500,000; $8 for account balances $500,000+
Commission Free ETFs
200+
55+
Broker Assisted Tradesonline pricing + $25.00 service charge
$25.00
Customer Service
24/7
Monday-Friday 8am -10pm ET
Inactivity Fee
None
$0
Maintenance Fee
$0
$20/year. Waived if account owner signs up for e-delivery service OR have at least $10,000 in Vanguard ETFs and mutual funds
Banking
Yes
No
Mobile App
Yes
Yes
Desktop App
Yes
Yes
Forex Trading 
Yes
Futures Trading
$1.50 per contract
No
Locations
300 locations
No
Online Community
Yes
No
Seminars
Yes
Yes
Virtual Trading
No
No
Stock Trading
Options Trading
Mutual Fund Trading
Online Platform
Banking
Mobile App
Commissions and Fees
Ease of Use
Research

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

Charles Schwab: Pricing information from published websites as of 4/16/2018

Vanguard: Pricing information from published websites as of 4/16/2018

Bottom Line

Charles Schwab offers a household name that can be comforting when investing large amounts of money. With many options for commission-free trades, it may be easier to keep more of your earnings by using Charles Schwab for a taxable or retirement account. If you are looking for something more along the lines of a robo-advisor, or your investment needs are simple, another broker with lower investment requirements and less complex trading platforms may suit you better.

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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