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In-Depth Analysis

Charles Schwab Review

G. Dautovic Image
ByG. Dautovic
February 24, 2021

If you’ve never heard of Charles Schwab or have difficulty pronouncing the name, chances are you’re a proud Zoomer. Millennials, on the other hand, probably know Uncle Charles for enabling commission-free online stock trading in 2019. It was a game-changer.

This old-school broker adapted to the needs of the modern consumer, and its 0% model made investing accessible to all. One of the company’s greatest assets is its decades of experience in the brokerage business. To learn more about the financial services that it offers, let’s step right into our unbiased Charles Schwab review.

Deposit minimum:
$0

Support: 24/7 live chat, phone

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Fortunly Rating

Account minimum:
$0 to open an account
Deposit minimum:
$0
Account management fee:
$0
Futures trading:
$0.65 per contract
Broker-assisted trades:
$25 service charge
Support:
24/7 live chat, phone
BBB Rating:
A+
Withdrawal time:
Two business days
pros thumb up Strengths
  • No trading fees
  • $0 account and deposit minimum
  • Educational and research features
  • Numerous account options
  • Excellent customer support
pros thumb up Weaknesses
  • No automatic cash sweeps
  • High transfer out fees
  • No trading in cryptocurrencies
  • No negative balance protection
  • High mutual fund costs

Overview

Widely considered one of the best brokers for ETFs and ETF screeners, Charles Schwab lives up to the hype. Founded back in 1971, this old-school broker is successfully competing with modern fintech giants.

Charles Schwab online trading revolutionized the world of investment with its zero-commission policy. As the competitors followed its lead, the company removed all the barriers preventing up-and-coming investors from participating in the race. Everyone can try their luck.

So what exactly is Charles Schwab? Well, it’s a lot of things. It has a full line of banking services in 300 locations. Charles Schwab bank? We reckon it sounds a bit snooze. But worry not – they have an offer for millennials who are into online investing from the comfort of their own home.

Simple platforms, such as Robinhood, definitely have their place. But once you’re ready to take your investment to the next level, have a go with the Schwab trading platform. There is something to be said for a tried and true company with a fantastic track record and significantly more financial tools to help you sprint to your financial goals.

You’ll be able to dive into investing at a microlevel and also gain access to tools like futures, options trading, annuities, marginal trading, and tons of other features that most of these up-and-coming fintech banks won’t even touch.

Speaking of prices, the company is hailed for being the pioneer of a zero-dollar commission structure. Charles Schwab trading starts with a free account and without an investment minimum. What’s more, trading stocks and ETFs is not going to cost you a penny. And you know what they say – a penny saved is a penny earned.

How does Charles Schwab compare to other companies?

Charles Schwab Logo Charles Schwab
Broker-Assisted Trades Fee:

$25

Stock Trade Fee (per trade):

$0

Vanguard  Logo Vanguard
Broker-Assisted Trades Fee:

$20

Stock Trade Fee (per trade):

$0

Fidelity Logo Fidelity
Broker-Assisted Trades Fee:

$32.95

Stock Trade Fee (per trade):

$0

Why should you choose Charles Schwab?

Well, we don’t see why you shouldn’t. The company checks all the right boxes for every type of investor.

Are you an amateur investor trying to untangle the financial snarls? Opt for Charles Schwab and review its wide selection of inexpensive and low-minimum mutual and index funds. You’ll get educational research tools to help you navigate the investment world, not to mention the $0 account minimum.

If you hit www.schwab.com because you’re not sure how to trade on your own and want investment management, worry not. The company keeps up with the rapidly changing financial world and offers a robo-advisor to help build and manage your portfolio. With Schwab Intelligent Portfolios, you don’t have to do the work. The robo-advisor will take the reins, but make sure that you have a minimum of $5,000 to invest.

Lastly, those of you reading Charles Schwab reviews in search of more sophisticated and robust tools for active traders, look no further. You’ve come to the right place. With $0 commission fees for stock, options, and exchange-traded funds, you’ll be more than covered for the advanced and professional stock experience.

On top of all that, we would like to point out exactly how far Schwab goes when it comes to customer safety. With its long history and distinguished name, Schwab bank has always been synonymous with safety.

When it comes to the Charles Schwab stock trading tradition, rest assured that you’re playing on the safe side. The company allows two-factor authentication, uses encryption, and guarantees to cover 100% of any losses due to unauthorized activity on your accounts. Meanwhile, its BBB rating is A+.

If you do opt for Charles Schwab, not only will you benefit from the company’s safe and easy-going approach, but you’ll also get intuitive trading platforms and tools as well as numerous accounts to choose from:

  • You can start with a Charles Schwab brokerage account and review its Retirement accounts that come with Charles Schwab 401k individual and business plans (Roth IRA, Traditional IRA, Rollover IRA), Trust Account, and Schwab Charitable Account.
  • If you need a robo-advisor to help you with trading, you can opt for Schwab Intelligent Portfolios® or Schwab Intelligent Portfolios Premium™, where you get guidance from a Certified Financial Planner™.
  • There’s an array of platforms, with the StreetSmart Edge® platform being the most advanced one.
  • There are many trading options available: ETFs, index funds, fractional shares, OTC stocks, mutual funds, futures trading, options trading, and Schwab stock slices.
  • You get access to educational platforms and resources such as Idea Hub®, Schwab Equity Ratings, Trade & Probability Calculator, and All-In-One Trade Ticket®. Lots of educational content is also available in Mandarin and Spanish.
  • Two mobile trading apps are available for iOS and Android devices: Schwab Mobile and StreetSmart Mobile.
  • Banking services: Schwab Bank High Yield Investor Checking® account, home loans, high-end credit cards

Application process

As you can see for yourself, numerous options can leave you in awe or totally confused. We’ve conducted the leg work for you, and we can confirm the following.

While opening an account with the Charles Schwab app is a no-brainer, getting started is a tough job, especially if you’ve just migrated from easy-peasy platforms like Robinhood.

After logging onto Schwab.com, you can open and fund an account online or via a mobile app. But from there, you’ll dive into lengthy menus with dozens of choices.

We don’t mean to nit-pick, but navigating through all the options might be a heck of a job for amateur investors. In these situations, we recommend the robo-advisor portfolios, which are automated and let users take some well-deserved rest from the fintech hustle and bustle.

According to our Charles Schwab review, those who are into superior market research should go with everyone’s top choice: the StreetSmart Edge® platform.

Whatever your choices and preferences, we’ll walk you through Schwab’s commission fees. You’ll thank us later.

Products and Pricing

Before you set sail for choppy waters, keep in mind that tradable securities with Schwab are stock shares, bonds, fractional shares, CDs, mutual funds, ETFs, options, and futures.

The good news is that there’s no account minimum, and the company offers access to over 4,000 funds with minimum investment requirements of $100 or less.

Let’s take a look at the hailed Charles Schwab intelligent portfolio. Our review shows that users can get started with an automated investment of $5,000. They’ll get full 24/7 live support from US-based service professionals and a robo-advisor that is going to create and manage a diversified portfolio based on their goals.

The other feature on the same table is the more robust Schwab Intelligent Portfolios Premium™, where you get guidance from a Certified Financial Planner™ for a flat fee of $300 and a $30/month advisory fee after that. Set your income, retirement, vacation, or college goals and start reaching for them.

If you’re already over the Charles Schwab robo-advisor, review its premier offering, StreetSmart Edge®. Should you need an advanced and customizable trading platform with the ability to create and edit multiple layouts and monitor your market exposure, search no more. Keep a $1,000 minimum account balance in your regular brokerage account and let it work for you.

When it comes to options trading, you’ll get no base commission, and you’ll pay only $0.65 per contract. On top of that, all ETF’s exchanges are commission-free, with the Schwab ETF list extending to more than 2,000+.

Charles Schwab investments wouldn’t be complete without the Stock Slices feature for fractional shares. It offers investors the opportunity to buy a slice of stock rather than pay the full share price. You’ll be pleased to hear that single slices are available for as little as $5, and investors can buy up to ten at a time.

While examining the Charles Schwab mutual funds, our review also found out that the company offers over 4,300 no-transaction-fee mutual funds with easy-to-navigate and somewhat rudimentary screeners.

On the flip side, with Schwab, the commission fees for mutual funds outside that program are quite pricey: $49.95. Also, for broker-assisted trades, be ready to cough up $25 for every executed trade. And be prepared for very steep prices in case you decide to say farewell to Schwab; it’ll cost you $50 for a full account transfer and $25 for a partial transfer.

Banking with Schwab

When it opened back in 1971, the company was conceived as a brick-and-mortar bank. Good old banking services continue to be one of its most significant assets. You can add ours to the long list of Charles Schwab reviews that praise the Charles Schwab High Yield Checking account as their best product.

What you’ll get are easy transfers to and from your checking account to your linked brokerage account, without monthly service fees or minimum prices for opening it, and much more.

You’ll receive a Charles Schwab credit card that can be used for purchases anywhere Visa is accepted. You’ll also get unlimited refunds for ATM fees and zero transaction fees if you use this debit card abroad. What more could you wish for?

The Bottom Line

Our evaluation of the pros and cons of Charles Schwab led us to the inevitable conclusion – we highly recommend their products and services. It caters to investors of all stripes, both beginners and experienced ones. Schwab online services combine zero commission fees and detailed educational resources with relaxed qualification standards as their main selling points.

The company stands out thanks to an array of robust features and tools that help active investors reach their goals. The Schwab free trades option attracts those up-and-coming venturers.

Charles Schwab is a tried-and-true name in the fintech world, well-known for its safety and support. Whenever you encounter a problem on your way to growing your wealth, its live support will assist you 24/7. Along with the easy-to-use Schwab app, we believe the company lives up to the hype.

On the other hand, Charles Schwab falls short for its pricey transfer out and mutual funds fees. Also, there’s no automatic cash sweep, and your uninvested cash is swept into an account, paying a rate of only 0.01%. Not to be picky, but the website’s interface can be overwhelming and confusing due to numerous options that are difficult to navigate.

But if you need a full-service bank on top of a brokerage, it’s worth checking out what this old-school player has to offer.

Charles Schwab Q&A
Is Charles Schwab good for beginners? +

Our Charles Schwab brokerage review affirms that the company caters to amateur investors. With its zero commission fees and lots of educational resources, it ticks all the boxes. For those who need assistance, there’s a robo-advisor feature that can take the reins and put your mind at ease.

Is Vanguard or Charles Schwab better? +

While the two fintech giants have similar fee structures, they offer very different online investing approaches. The Vanguard platform heavily favors amateur investors with lower funds. Charles Schwab offers more sophisticated features for active traders. Aside from that, Vanguard charges only $20 to trade mutual funds that are not on the firm’s no-fee list.

Should I use Robinhood or Charles Schwab? +

Before you opt for Robinhood or Charles Schwab, review their pricing options. While both companies do not charge anything for regular stock trades, options contracts are pricier at Charles Schwab, costing $0.65. However, Charles Schwab offers more robust investment features and more tradable securities. Robinhood supports cryptocurrency trading as well.

Who is better, Charles Schwab or Fidelity? +

The world's two largest investment companies are quite similar. However, Fidelity’s simple layout and design attract more casual users. Active users prefer Schwab’s wide range of tools and analytical data. But you can’t go wrong with either.