Charles Schwab is a consistent advocate of the individual investor, whether it's seasoned vets or beginners making their first trade. It has aggressively slashed fees on its mutual funds, removed common account fees, and eliminated its per-trade commissions, making it one of the most affordable places to open an account and trade stocks, ETFs, and funds. In the Charles Schwab review below, we’ll show you how the brokerage compares on commissions, fees, margin rates, trading platforms, and more.
Charles Schwab has aggressively slashed fees on its mutual funds and ETFs, eliminated common account fees, and eliminated its commissions, making it one of the least expensive brokers.
$0 per trade
Charles Schwab topped the podium in the following categories for The Ascent's 2020 stock broker and robo-advisor awards:
No commissions: Offering $0 stock and ETF trades, Charles Schwab is one of the least expensive online discount brokers for basic stock and ETF trades. That said, most of the major discount brokers now offer commission-free trading.
No account minimums: Schwab recently eliminated account minimums on its retail brokerage accounts, making it one of the best stock brokers for beginners.
Fractional share investing: Beginner investors will find Schwab's Stock Slices valuable. All you need is $5 to begin investing in S&P 500 companies with share prices that are much higher.
International access: If you’d like to trade stocks on foreign markets, Schwab can help. It offers trading in more than 30 global markets. Sign up for a Schwab Global Account to be able to trade stocks online in 12 of the top-traded foreign markets, each with real-time quotes during market hours.
Customer service: One advantage of working with Charles Schwab is that it has a branch network of more than 340 locations across the country. It’s one of a handful of discount brokers that offer in-person help when you need it, which is a compelling advantage.
ETF investing: Schwab offers one of the largest marketplaces for low-cost ETF and index investing, including it's own line of branded ETFs that rival the lowest cost options in the market.
Mutual fund investing: Similar to ETFs, Schwab has a diverse marketplace for mutual fund investors who are wanting to put their money into the mutual fund of their choosing. In addition to it's OneSource list of no load, no commission mutual funds, Schwab also offers its own low-cost mutual funds.
Banking and cash management: Schwab is truly a one-stop shop for you money needs and it offers banking products such as the Charles Schwab High Yield Investor Checking account, CDs, and credit cards.
Managed portfolios: Schwab Intelligent Portfolio is among the best robo-advisors for passive investors. Further, Schwab offers managed portfolios and access to a network of financial advisors that rivals the biggest names in the market.
Branch access: Customers valuing in-person investing and banking relationships will want to add Schwab to their shortlist.
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Charles Schwab was the first big brokerage to eliminate commissions on online stock and ETF trades, and it sparked the commission-free revolution of late 2019. Nearly all of Charles Schwab's competitors followed suit, slashing commissions to zero.
Here are Charles Schwab’s trading fees based on the type of investment:
|Stocks and ETFs||Options||Mutual funds|
|$0||$0 + $0.65 per contract||$0 (OneSource mutual funds)|
Notably, Schwab offers thousands of OneSource no-load, no-transaction-fee mutual funds (as well as commission-free ETFs), which allow investors to buy diversified funds without paying a fee to do so. Besides, the fee only applies to purchases, whereas other brokers with lower fees charge a fee to buy or sell a mutual fund.
Fund investors will find that Charles Schwab boasts a massive selection of mutual funds, including mutual funds that can be purchased without paying a load, transaction fee, or commission.
|Total mutual funds||More than 10,100|
|No-load, no-transaction-fee mutual funds||More than 4,300|
This discount broker has several platforms aimed at different types of investors. In addition to a basic browser-based solution, Charles Schwab offers a streamlined web trading tool (Trade Source) plus a desktop platform (StreetSmart Edge) for advanced traders and sophisticated investors.
As long-term buy-and-hold investors, we don’t actively trade our accounts and therefore don’t need many of the bells and whistles. If a robust platform is especially important to you, we’d recommend using a demo account to try a broker’s platform out for yourself. Ultimately, whether a platform is "good" or "bad" comes down to personal preference more than anything else.
|Margin balance||Interest rate|
|Less than $25,000||8.325%|
|$25,000 to $49,999||7.825%|
|$50,000 to $99,999||6.875%|
|$100,000 to $249,999||6.825%|
|$250,000 to $499,999||6.575%|
|More than $500,000||Call for more information|
Investors who use margin as a key part of their trading or investing strategy will find that Charles Schwab margin rates are toward the middle of the brokerage pack, although it’s one of only a handful of brokers whose rates start at less than 10% for smaller balances.
Discount brokers can offer cutthroat commission prices because they eliminate many of the expenses associated with traditional brokerages. But big brokers still provide all the customer service you might need, whether over the phone, online, or through a branch office.
Schwab offers 24/7 support over the phone, as many discount brokers do. But thanks to its vast brick-and-mortar branch network, customers can also get help in person at offices scattered across the U.S. It has more than 340 branches in 46 states, so the vast majority of Americans live within a short drive of one of its offices. (Note: Schwab has temporarily closed all of its branches to walk-in traffic due to the COVID-19 pandemic, and they remain closed as of October 30, 2020.)
Whereas large wirehouse brokers have large research arms to supply their research internally, most discount brokers instead offer research from third-party services like Morningstar and S&P, for example. Below, we’ll run through a few notable research and screening tools available to Schwab brokerage customers.
To be sure, most large discount brokers offer more research and screening tools than ever before. It’s fair to say that if you wanted to spend hours each day reading stock market research or tinkering with screeners, you wouldn’t run out of research to read or screeners to toy with, a statement that applies to virtually any of the household-name discount brokers.
We think Schwab has a product offering that will suit the needs of most investors. If the following statements apply to you, then Schwab may be a good fit for your portfolio:
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