Charles Schwab Review

Brokerage Summary
Investopedia's Rating
charles-schwab 5
Open Account
Transparency
Fees
Platform
Special Features
Products
Research Tools
Customer Service
Summary

Charles Schwab was founded in 1973, and today is one of the world’s largest brokerage firms, with more than 10 million active client brokerage accounts and $2.90 trillion in client assets. Schwab provides extensive tools and resources to help you research your own investments, plus professional portfolio management and advisory services if you prefer guidance.

WelcomeInterested in you

You’ll find Schwab’s commission rates are as good or better than most of its competitors: Online stock trades are a flat-rate $4.95 (it’s more for large block transactions requiring special handling), and options are $4.95 + $0.65 per contract. In addition, Schwab has the largest selection of commission-free ETFs and no-transaction-fee (NTF) mutual funds in the industry. (200+ from 16 ETF providers), plus nearly 4,000 Novice and casual investors can research and place trades directly from Schwab’s website; active traders who require advanced charting and order entry capabilities will enjoy StreetSmart Edge – Schwab’s flagship trading platform.

$2.9 Trillion
Client Assets
10 Million
Active Accounts
1973
Founded

Schwab received a score of 4.78 out of 5 from Investopedia due to its extensive asset and account protection measures, robust trading platforms, abundant research tools and resources, and solid customer support.

SCHWAB FAST FACTS

  • Commission Free Products
    Build a portfolio with commission-free ETFs and mutual funds.
  • Independent Trading
    Research and place your own trades.
  • 3rd Party Analysis
    Read commentary and analysis from trusted third-party providers.
  • Schwab Intelligent Portfolios
    Fully automated portfolio with no advisory fees.
  • Diverse Products Offerings
    Invest in bonds, ETFs, futures, mutual funds, options and stocks.
  • Desktop & Mobile
    Trade from a website, desktop or mobile device.
  • Simulated Trading
    Does not offer practice trades before risking real money.
  • Forex
    Does not offer investing in forex markets.
  • Margin Rates
    Does not offer access to low margin rates.
  • Minimum Deposit
    Cannot open an account with less than $1,000.
Transparency

Schwab has been in business for more than four decades and has a solid reputation backed by numerous awards and accolades. It’s regulated by FINRA, and customer accounts are protected under FDIC, SIPC and the SEC Customer Protection Rule; excess-SIPC coverage is provided by Lloyd’s of London and other London insurers. Schwab’s Security Guarantee covers 100% of any losses in any of your Schwab accounts due to unauthorized activity.

Total Securities Guaranteed
Graph
In the event of Schwab’s bankruptcy, the SIPC insures up to $500,000 in securities that they are not able to return to clients, excluding futures, precious metals and investment contracts (i.e LLPs). Additionally, each client is insured up to $150M in securities via Schwab’s third party insurance.
Total Cash Guaranteed
Monetary Sign
In the event of Schwab’s bankruptcy, the SIPC insures up to $250,000 in cash for each account held in a separate capacity (ie. individual account vs IRA). Additionally, clients are insured up to $1.15M in cash via Schwab’s third party insurance.
*Schwab, SIPC, and 3rd party Insurance do not cover losses from market value changes.

The company has a long history of corporate social responsibility and its initiatives include Money Matters: Make it Count, Schwab MoneyWise, the Charles Schwab Foundation and environmentally friendly practices.

Fees

Pros - Schwab’s flat-rate commissions are lower than the industry average and equity trades cost $4.95 – whether you’re trading 100 or 1,000 shares. Customers can trade 200+ commission-free ETFs and nearly 4,000 no-transaction-fee (NTF) mutual funds for free. You’ll need at least $1,000 to open an account, but that requirement is waived if you set up automatic monthly deposits of at least $100 or open a Schwab Bank High Yield Investor Checking account linked to your Schwab One brokerage account.

Cons - You’ll pay $76 to buy a mutual fund that’s not on the NTF list (but there’s no fee to sell it). Margin rates are higher than the industry average: You’ll pay 8.5% if your debit balance is below $25,000. Higher balances may be eligible for lower interest rates.

FEE OVERVIEW

  • Stocks
    $4.95
  • ETFs
    $4.95
  • Schwab OneSource ETFs*
    Free
  • Mutual Funds
    $76.00
  • Schwab OneSource Mutual Funds*
    Free
  • Options
    $4.95 + $0.65 per contract
Platform

Pros - Schwab supports website, desktop and mobile trading: The website and mobile platforms are suitable for novice and casual investors, and StreetSmart Edge – Schwab’s fully customizable trading platform – is ideal for active traders and anyone requiring advanced charting and order-entry capabilities. Navigating the customer dashboard on Schwab.com is fairly standard, and you can easily check account balances, view order status, screen for stocks and place buy and sell orders. Transferring money in and out of your Schwab accounts is simple and straightforward.

Cons - Advanced order types (conditional orders) are available only on the StreetSmart Edge platform. The platforms offer no simulated trading, so you won’t be able to practice placing trades before risking real money.

See Platform Features
Special Features

Active traders and anyone who wants advanced charting and order-entry capabilities can use StreetSmart Edge, Schwab’s flagship trading platform. The platform is available at no cost if you enroll in Schwab Trading Services, a complimentary service that provides access to the advanced trading platform, support from trading specialists and access to Schwab’s trading community. This is a great deal considering many brokerages charge a monthly fee or enforce frequency requirements to use their “pro” level software. You can add NASDAQ Level II quotes for just $30 per quarter. Schwab also offers automated investing and the company is proactive about keeping up with emerging fintech services.

Street SmartAutomated Investing
Products

Pros - Schwab offers a variety of investment products. You may also be able to participate in initial public offerings (IPOs), but you’ll need to complete an eligibility questionnaire to do so. Short selling is allowed on certain stocks and ETFs, and if your account is margin eligible, you can get access to cash by borrowing against the securities in your portfolio.

Cons - Foreign currency markets are not supported, so you’ll need a different brokerage if you want to trade forex.

SCHWAB'S PRODUCTS

  • Annuities
  • Bonds
  • CDs
  • ETFs
  • Futures
  • Mutual funds
  • Options
  • Stocks
  • OTCBB/Pinksheets
  • DRIPs
  • IPOs
  • FOREX
Research Tools

Pros - Schwab offers a good selection of tools and resources, including analyst ratings and reports, economic calendars, financial ratios, financial statements, market news, recommendations, technical analysis tools and screeners for every product it offers. You’ll find a wealth of research from independent third-party providers along with Schwab’s own in-house research and equity ratings. The standard charting tools offer enough functionality to keep casual investors and traders happy, and you can select different charting intervals, add technical indicators and view historical charts.

Cons - The Education Center offers basic information on a variety of investing-related topics, but you’ll have to dig to find content related to certain investment products, including preferred shares and futures.

  • Analyst Ratings and Reports
  • Economic Calendars
  • Financial Ratios
  • Financial Statements
  • Market News
  • Recommedations
  • Technical Analysis Screeners
Customer Service

With award-winning customer support, Schwab makes it easy to connect. Phone and live chat support are available 24/7, every day of the year, and you can submit questions and comments by email. More than 300 branches across 46 states (plus Puerto Rico and London) offer free investing workshops and seminars covering a variety of topics, as well as one-on-one consultations. Service is consistently prompt and courteous.

Bottom Line

Schwab’s research offerings and customer service are top notch, and their trading platforms are suitable for most casual investors and active traders. At $4.95, their commissions are at the lower end of the spectrum for many online brokerages, but margin rates are higher than the industry average. Overall, Schwab offers a great product with several free features that would cost extra on many other brokerages – including their advanced trading platform (StreetSmart Edge) and Schwab Intelligent Portfolios, a no-fee robo-advisor service.