Both Schwab and Fidelity have websites and downloadable platforms packed with features, news feeds, research, and educational tools to grow your knowledge base. They also offer multiple mobile platforms, full-featured websites, and downloadable platforms aimed at frequent traders. Both brokers ranked in our top five, with Fidelity at number one and Schwab in third place.
In our 2019 Best Online Brokers Awards, Charles Schwab received awards for Best Overall Online Brokers, Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Options Trading, Best for Penny Stocks, Best for Roth IRAs, Best for IRAs, Best for International Trading, and Best Web Trading Platforms.
On November 25, 2019, Charles Schwab announced a buyout of TD Ameritrade’s online brokerage. The transaction itself is expected to close in the second half of 2020, and in the meantime, the two firms will operate autonomously. Schwab expects the merger of its platforms and services to take place within three years of the close of the deal.
Fidelity Investments received awards for Best Overall Online Brokers, Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Penny Stocks, Best for Roth IRAs, Best for IRAs, Best for International Trading, and Best Web Trading Platforms.
- Account Minimum: $0
- Fees: Free stock, ETF and options trading commissions in the U.S., as of October 7th, 2019. $0.65 per options contract.
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Choosing between these two comes down to personal preference, and perhaps the geographic availability of one of their offices. Both have excellent fundamental research offerings. Schwab clients can trade futures and futures options, while Fidelity customers have greater access to international equities and currencies.
Fidelity lets you open an account for free, though an unfunded account will not have access to most of the research functions after 30 days. Schwab also lets you open a brokerage account without funding it, but clients must open a linked checking account too. Fortunately, the checking account is free and has no minimums.
Schwab offers several platforms after logging in at their flagship website. You can run the StreetSmart Edge platform from the cloud, or download it to your desktop. StreetSmart Edge is Schwab’s platform for advanced traders. It features real-time data and news along with customizable charting. Schwab also gives clients the All In One Trade Ticket on all platforms. It lets you build an order using the asset class you choose in a flexible and intuitive way. Quotes update in real-time. Schwab monitors its execution quality statistics, and the reports provided to clients after every trade include price improvement information.
Fidelity made considerable improvements to its entry interface in 2019. In particular, the brokerage eliminated the ability to make some of the most common mistakes. Fidelity's trade execution engine gave its clients a high rate of price improvement. As of 2018, they were able to achieve more than five times as much price improvement as the average brokerage. Active Trader Pro, Fidelity's advanced platform, offers streaming data and customizable charting. There is always an order ticket on display, and contextual help has been added to guide you through the process.
- Several platforms from which to choose
- All-in-One Trade Ticket lets you build an order using any asset class
- Trade execution reports include price improvement achieved on the order
- Excellent order executions generate price improvement
- Streamlined trade ticket with contextual help available
- Streaming real-time data on Active Trader Pro platform
Mobile and Emerging Tech
Schwab stores client trading customizations and watchlists in the cloud. This lets users maintain the same setup across platforms. Streaming video and almost all education resources can be accessed on mobile devices or the desktop. StreetSmart mobile apps also feature options analysis and trading tools.
Fidelity's mobile apps are much fresher and easier to use than the website. Fidelity is in the process of updating their website, but the mobile apps are already excellent. The startup screen is customizable, and the trade tickets now have contextual help. Watchlists persist between the website and mobile devices. Fidelity's impressive full range of offerings are available for trading on mobile apps.
- Customization choices stored in the cloud and persist across platforms
- Streaming video and education offerings available on mobile devices
- Complex options analysis and trading possible on StreetSmart app
- Streaming data and customizable news feed
- Full range of products are tradable on mobile apps
- Watchlists sync across platforms
News and Research
Schwab offers extensive equities research from a variety of sources. Research is available from Morningstar, CFRA, Credit Suisse, MarketEdge, and Reuters. Real-time news sources include Business Wire, Associated Press, GlobeNewswire, and MT Newswires. Schwab’s proprietary rating system also generates grades for over 3,000 companies. The StreetSmart Idea Hub gives you several paths for finding options trading ideas. The Idea Hub also links to more in-depth analysis, which can be used before launching a trade. StreetSmart uses charts with real-time data, and you can even make a trade directly from a chart.
Fidelity's screening tools can help you to focus your investments across a wide array of asset classes. They offer screeners for stocks, ETFs, options, mutual funds, and fixed income. Fidelity's charting package includes Recognia technical patterns and events. Active Trader Pro gives you access to streaming news feeds and video from Bloomberg TV. The stock snapshot pages include environmental, social, and governance (ESG) ratings from MSCI.
- A wide range of equities research and news available
- StreetSmart's Idea Hub helps you find options trading ideas
- Charts on StreetSmart stream real-time data
- Screeners for stocks, ETFs, options, mutual funds, and fixed income are available
- Stock snapshot pages include data for ESG investing
- Customizable charting package includes technical events from Recognia
Education and Security
Schwab Live Daily provides 4 to 7 hours of video content every trading day. It is open to clients and non-clients alike. Schwab also offers its Choiceology podcasts, which provide education on behavioral economics and decision making. The brokerage publishes the magazine “On Investing” four times per year. The Schwab Learning Center also covers a broad and deep range of educational content focusing on different skill levels. Schwab's security guarantee covers losses in any Schwab accounts due to unauthorized activity. Schwab also supports the Symantec VIP app and physical tokens for two-factor authentication.
Fidelity’s online Learning Center has many useful articles, infographics, videos, and webinars. They cover investing-related topics such as retirement planning, fixed income selection, fundamental analysis, options trading, and technical analysis. Fidelity frequently offers webinars, and they also have online coaching sessions for advanced topics. Beginning investors can benefit from learning programs on mobile apps. Fidelity has a security guarantee, which will reimburse you for unauthorized activity occurring through no fault of your own. Fidelity also offers two-factor authentication via the Symantec VIP app.
- The Schwab Learning Center covers a broad and deep range of educational content
- Schwab's security guarantee covers losses in any Schwab accounts due to unauthorized activity.
- Schwab also supports the Symantec VIP app and physical tokens for two-factor authentication.
- Online learning center contains articles, videos, and other media for a wide range of investing and trading topics
- Learning programs for those new to investing are accessible from mobile apps
- Fidelity also offers two-factor authentication via the Symantec VIP app.
Schwab eliminated its base commissions for stock and ETF transactions as well as its per-leg fee for options trades. Commissions are also eliminated for OTCBB (penny stock) transactions, which is a differentiator. Options trades are now $0.65 per contract, which is a large price cut for smaller multi-leg trades. Their margin rates are average, though lower than TD Ameritrade and E*TRADE.
All U.S. stocks and exchange-traded funds (ETFs) no longer incur a commission at Fidelity, and the base per-leg charge for options trades has also been eliminated. Options trades are $0.65 per contract under Fidelity's new pricing. Their margin rates are slightly higher than average. There is a higher than average $49.95 charge for the initial purchase of mutual funds that are not on the no-transaction fee list. Their bond transaction fees are just $1 per bond. Very frequent traders can also work out their own commission schedules.
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.
In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.