Charles Schwab IRA and Roth IRA Review (SCHW)

May 19, 2017 — 1:28 PM EDT

The Charles Schwab Corporation (NYSE: SCHW) is a well-known and respected firm, and after 40 years of financial industry evolution, Schwab, one of the nation’s first discount brokerages, is now considered to be a full-service broker with low-fee service options. Schwab places emphasis on personal service and financial planning to facilitate the ease of online trading and customer service. It offers a full line of individual retirement account (IRA) products.

Accounts Types

Schwab offers traditional IRA accounts that have tax-deductible contributions with withdrawals of principal and earnings subject to income taxes. Roth IRA account contributions are after-tax dollars with tax-free withdrawals of principal and earnings. It has IRA rollover accounts for transfers from 401(k) accounts, custodial IRAs for children with income and inherited IRAs for beneficiary survivors. There are no fees to open or maintain any IRA account at Schwab.


Customers with $25,000 in accounts at Schwab qualify for a free financial planning consultation. People with smaller accounts have phone service and email chat options. Schwab provides a significant amount of investing information in its online education center.

Schwab offers a full selection of mobile apps. All clients receive access to Schwab’s Trade Source online trading platform and the StreetSmart Edge desktop software, which has a full suite of investment tools and data.

Investors with accounts of at least $5,000 can take advantage of Schwab Intelligent Portfolios. Schwab Intelligent Portfolios is a robo-advisor. Investors just answer a few question regarding goals, assets and risk tolerance, and a computerized algorithm creates a diversified portfolio of exchange-traded funds (ETFs). Periodically, the robo-advisor will rebalance the ETF portfolio to maintain the desired risk and return ratio. There is no charge to use the service and no asset management fees or ETF trading commissions.


Investors may choose from a broad range of investments, including common stocks, preferred stocks, stock options, bonds, mutual funds, ETFs and cash accounts. Schwab Mutual Fund OneSource offers more than 16,000 mutual funds from hundreds of asset managers. More than 3,000 funds covering all asset classes are available commission-free, with no transaction fee or sales charge. Investors wishing to trade other funds pay a transaction fee of $76 to buy, but not to sell, and may face front-end loads or redemption fees. Schwab offers commission-free trading of 200 plus ETFs that cover all asset classes. Stock and bond transactions incur the standard commission fees charged to all accounts.


Competitors, such as E-Trade Financial Corporation (NASDAQ: ETFC), Scottrade, TD Ameritrade Holding Corporation (NASDAQ: AMTD) and Fidelity Investments, all offer close to the same services at the same price, with a few exceptions. The mutual fund transaction fee of $76 charged by Schwab is substantially higher than any of the other brokers. TD Ameritrade is second at $49.99, and Scottrade only costs $17. Schwab has more than 200 commission-free ETFs; ETRADE offers 120, and Scottrade has none. Schwab is the only broker to offer a free robo-advisor, though all firms are planning to introduce these services. Schwab is given a small edge in the quality of its research advice. All companies charge flat fee commissions that range between $7.00 and $9.99. Schwab’s commission rate is $6.95 and a $4.95 flat fee for stock trades.


The financial site, gives Schwab's services a rating of 4.5 stars. The only complaint is about the questionable quality of email support, with online chat and phone support considered the better options.

The best source of customer reviews of Charles Schwab IRA accounts is The company provides a review system that allows clients to rate the company's products and services.