Looks like you can make more money by taking less. Charles Schwab (NASDAQ:SCHW) posted a healthy second-quarter report, despite implementing some radical client-friendly moves like lowering account opening minimums, waiving low balance charges, and dramatically boosting the yield on its investor checking accounts.

In concert, Schwab's mainstream moves fueled a 23% surge in client assets since June of last year to $1.4 trillion. It's nice to see moves that favor small investors pay off nicely.

Schwab didn't have to sacrifice margins along the way, either. Revenue from continuing operations rose 10% to $1.2 billion. Net income climbed 16% higher, but aggressive share repurchases over the past year led to a 21% boost in earnings per share to $0.23.

Sure, that's just what analysts were expecting, but I had my doubts -- lowering minimums can be tricky. If the incremental traffic is just small investors who simply belly up to the trading bar with the minimums in passive accounts, servicing the accounts profitably can be a challenge.

Take Schwab Funds, for instance. The company recently lowered the minimum initial investment in its proprietary mutual funds to $100. If an accountholder puts up the $100 and nothing more, annual expenses amount to roughly a buck. That isn't enough to cover the postage cost of mailing out quarterly statements.

The key to making low minimums work is to establish -- and grow -- relationships with entry-level investors. Schwab is apparently doing exactly that.

With Schwab announcing a $3.5 billion recapitalization plan after completing its sale of its U.S. Trust wealth management business to Bank of America (NYSE:BAC), it is clear that Schwab is willing to be as generous with its shareholders as it is with its clients.

With rivals TD AMERITRADE (NASDAQ:AMTD) and E*Trade (NYSE:ETFC) reporting this week, we'll have a great snapshot of the sector as a whole. In the meantime, Schwab is looking pretty good in its close-up.

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Longtime Fool contributor Rick Munarriz has been trading exclusively through discount brokers since 1990, but he does not own shares in any of the companies in this story. Bank of America is an Income Investor pick. The Fool has a disclosure policy.