Charles Schwab Review

By Jean Folger  | July 25, 2017

Iconic brand with extensive account protection, robust trading platform and abundant research.

Overall Rating
Charles Schwab 4.8
4.8/
5.0
Products & Fees
4.4
Platform
4.8
Transparency
5.0
Special Features
5.0
Research Tools
4.9
Customer Support
5.0
Fast Facts

Charles Schwab’s iconic brand is one with which nearly every investor is familiar. Schwab received a score of 4.8 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.

pros
  • 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
cons
  • 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
Client Assets
$2.9 Trillion
Active Accounts
10 Million
Founded
1973
Products & Fees
4.4

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. 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.

  • Stocks
    $4.95
  • ETFs
    $4.95
  • Schwab OneSource ETFs*
    Free
  • Options
    $4.95 + $0.65 per contract
  • Mutual Funds
    $76.00
  • Schwab OneSource Mutual Funds*
    Free
  • Treasuries
    Free
  • Bonds (secondary trades)
    $1 per bond
  • CDs
    $1 per $1,000
  • Annuities**
    0.65%
  • Futures***
    $3.50 per contract
  • IPOs
    $4.95
  • OTCBB/Pinksheets
    $4.95
  • DRIPs
    Free
  • Forex
    Not Available
Platform
4.8

Schwab offers a web and mobile platform with a robust set of tools and resources for self-directed investors looking for deeper insights into stocks, bonds, preferred shares, and other products. Users can also find third party resources like analyst reports and forecasts from experts in the industry. Active traders have access to Schwab’s StreetSmart edge, a fully customizable trading platform available to Schwab clients.

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.

Transparency
5.0

Schwab customers can feel reasonably confident that their assets and personal information are safe. The Customer Protection Rule, FDIC, and SIPC trifecta – combined with Schwab’s excess SIPC coverage from Lloyd’s – make it unlikely that you would sustain significant financial losses if Schwab went bankrupt. In addition, Schwab’s Security Guarantee protects you for 100% of losses in any of your Schwab accounts due to unauthorized activity.

Total Securities Guaranteed
($150M 3rd Party Insurance + $500K SIPC)
$150.5 Million
Total Insurance for Cash
($1.15M 3rd Party Insurance + $250K SIPC)
$1.4 Million
What you need to know

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. 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.

Special Features
5.0
Street Smart
StreetSmart Edge

Schwab's flagship StreetSmart® trading platform which features integrated tools to make the process of identifying (and acting) on potential opportunities more logical and efficient.

StreetSmart Edge
Free
NASDAQ Level II Quotes
$30 per quarter
What you need to know

StreetSmart Edge: 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. Automated Investing: Schwab also offers automated investing and the company is proactive about keeping up with emerging fintech services.

Research Tools
4.9

Schwab offers robust resources for the self-directed investor but you’ll have to dig deeper to find specific investment tools.

Analyst Ratings and Reports
Third-party research ratings, detailed stock reports, and focus lists
Economic Calendars
Track market-moving events with calendars from Econoday and Briefing.com
Financial Statements
Access key financial statements, such as 10-K and earnings reports
Market News
Breaking news from Reuters, Briefing.com, and more
Recommendations
Schwab Equity Ratings®, a proprietary method for rating performance
Technical Analysis Screeners
Filter and group based on specific investment criteria
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.

Customer Support
5.0

Schwab’s offers investors many ways to get in touch with its 24/7 customer support. The company’s live chat makes it easy to get answers to questions quickly.

What you need to know

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 that 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.