Charles Schwab rating

Charles Schwab Review

Charles Schwab Pricing and Minimum Deposit

Stocks and ETFs $4.95
Stocks and ETFs broker assisted $29.95
Stocks and ETFs phone trades $9.95
Options $4.95 + $0.65 per contract
Mutual funds $76 to buy, $0 to sell
Futures $1.50 per contract
CDs, Corporate Bonds, Municipal Bonds, Government Agencies, Zero-Coupon Treasuries, including STRIPS and Mortgage-Backed Securities $1 per bond, $10 minimum, $250 maximum
Preferred Stocks and REITs $4.95
Commercial Paper and Foreign Bonds, Unit Investment Trusts call for pricing

Investments stocks, bonds, mutual funds, futures, Treasury issues, options, CDs, insurance, ETFs, futures, annuities, non-U.S. securities and ADRs, WEBs and Canadian foreign orders
Charles Schwab minimum deposit to open account $0 for cash account, $2,000 for margin account
FeesCharles Schwab fees
Promotion linkCharles Schwab promotions

Overview of Charles Schwab

Schwab (member of SIPC) is a leading brokerage firm, offering not just self-directed accounts but also managed portfolios, bank products, and a host of other financial services. Not surprisingly, it has trillions of dollars in client assets. In this review of Charles Schwab we're going to rate it in important categories, and you can compare these ratings to what other brokers have received and see where the firm excels and where it fails.


Charles Schwab ETFs Rating

Schwab's website has a section entitled 鈥楨xchange Traded Products.' It has an enormous amount of information about ETF's, ETN's, and closed-end funds. There is a convenient keyword search tool that can look for funds based on an entered word or words. For example, we typed in the word 'gold' and the website returned two ETF's; surprisingly GLD was not one of them, though.

Articles on ETF issues written by Schwab financial advisors are linked in the ETF section. Funds are sorted by investment philosophy, such as large growth or Japan stock. A search tool is available for socially-conscious funds. Furthermore, a comparison tool looks at funds side-by-side, showing such data as net expense ratio and volatility.

Schwab ETF Review

Schwab offers 251 ETF's that can be traded without paying any commissions. This is one of the largest lists in the discount brokerage industry but it is smaller than at Firstrade that offers 700 (!) and TD Ameritrade that provides 550+ commission-free ETFs.

Mutual Funds

Charles Schwab Mutual Funds Rating

As with ETF's, Schwab hits a home run in the mutual fund category. There are many helpful resources for self-directed investors on the broker's mutual fund page. If you know a fund symbol, you can enter it in a search box and view Schwab's report card on it. This handy document shows the fund's Morningstar rating along with many other important highlights, such as growth of a $10,000 investment.

Schwab Mutual Funds

Schwab's mutual fund screener can search by lots of criteria. It displays a total of 5,808 mutual funds that can be purchased by new investors. This is a somewhat small list, compared to some other firms. (Read Best mutual fund brokers.) However, Schwab makes up for it by offering 3,485 without loads or transaction fees. This selection is larger than what many other brokers offer.

One really nice feature that we liked was the company's OneSource Select List. This is an assortment of no-load, no-transaction-fee funds that are chosen by Schwab's in-house investment professionals and are expected to outperform rival funds. Some of them are Schwab funds, but many of them are not. All of the funds we looked at had expense ratios below 1.0%.

Customer Support

Charles Schwab Customer Rating

Schwab continues its above-average performance by offering customer service day and night, weekday and weekend. On top of its phone service, the website also provides round-the-clock chat service. Unfortunately, an agent wasn't able to answer a question about options trading in a recent test chat we initiated; and this will subtract half a star.

Besides English, Schwab offers service in several other languages. These include Spanish, Mandarin, Cantonese, and Vietnamese. TeleBroker is an automated system that is able to accept orders over the phone.

If you're an old school investor, don't worry, because Schwab hasn't forgotten about you. The brokerage firm has almost 400 brick-and-mortar locations that provide traditional in-person service during the weekday. With the recent loss of Scottrade, this is now the second largest network among online discount brokers (only TD Ameritrade has more). Besides its U.S. locations, Schwab has an office in San Juan, Puerto Rico and the United Kingdom.

Schwab's website has a very useful self-service section where you can perform all sorts of account management functions. These include adjusting alert settings, signing up for paperless statements, opening an account, downloading forms, or submitting a travel notice.


Charles Schwab IRA Rating

Besides its taxable accounts, Schwab also offers retirement accounts. The brokerage house has a large selection of IRA's, including Traditional, Roth, Rollover, Inherited, and Custodial versions. SEP and SIMPLE accounts are available as well.

There is no annual or maintenance fee for an IRA at Schwab, and the broker also doesn't require any minimum balance to open one. There is no minimum balance fee, either. A Schwab IRA is a no-fee account, which is very generous.

Besides the IRA itself, Schwab also has a good retirement section on its website that would be especially helpful for do-it-yourself investors who need a little extra guidance. While browsing through the section, we found a retirement income planning quiz, which tested our knowledge of how to correctly plan and save for life after work. There are other helpful resources as well.

Charles Schwab IRA Calculator

If you're self-employed, you'll be well-served by a Schwab solo 401(k) plan. This too comes with zero fees and all of Schwab's trading tools.

Both 401(k)'s and Individual Retirement Accounts come with the same commission schedule that taxable accounts have. We'll now take a look at what exactly Schwab charges for trading securities.

Charles Schwab Commissions, Fees and Account Requirements

Charles Schwab Fees Rating

If you're looking for a low-cost broker, Schwab should be at the top of your list. Stock and ETF transactions cost a very low $4.95 per trade. This commission is still higher than Firstrade, who charges $0. At Schwab there are no discounts for large accounts or active traders (like one at Ally Invest). Placing a trade over the broker's automated phone service costs an extra $5. Using a live representative is an extra $25. Option contracts cost an extra 65垄 each.

Mutual funds that aren't classified as NTF cost $76 to buy, but there is no charge to sell. This rate is higher than at many other brokers, such as Firstrade and Ally Invest which are both at $9.95.

Treasuries and new issues of fixed-income products are priced on a markup/markdown basis. This means that there is no commission, although the price includes a concession to Schwab. Bonds on the secondary market, including government agency bonds and zero-coupon Treasuries cost $1 each. Schwab here imposes a $10 minimum and $250 maximum.

As with retirement accounts, a regular brokerage account comes with no on-going fees. The brokerage house does require a $1,000 deposit to open a securities account; although this policy is waived if you open a Schwab Bank account at the same time. Also, see Charles Schwab hidden fees article.

Investment Advice

Charles Schwab Investment Rating

The rise of artificial intelligence has not gone unnoticed in the financial world. Schwab has a software program that is able to buy and sell inexpensive exchange-traded funds, and this service is cheaper than traditional human investment advisors. There are two plans available. The first requires a $5,000 minimum and amazingly costs nothing. Schwab is able to waive the management fee by holding a large cash position in the account, which it invests and makes money from; and by receiving compensation from the fund families that provide the ETF's.

The second plan costs 0.28% per year and requires $25,000 to begin. This second plan comes with a portfolio review by a Certified Financial Planner, so it's a sort of hybrid robo-human service. Hence the fee.

Besides the broker's computerized trading service, traditional managed accounts are still available. There are several varieties to choose from, and they cost between 20 and 90 basis points, depending on account balance and strategies chosen. Some packages include stocks, bonds, and mutual funds. Minimum deposit ranges from $25,000 up to $100,000.


New and existing customers of Schwab can earn 500 free trades with a qualifying deposit of $100,000 or more. The funds must come from outside of Schwab within 45 days of account opening. The commission credit can be used not only for stocks, options, and ETF's, but also per-contract option fees. The free trades expire after 12 months.

Trading Tools

Charles Schwab Trading Rating


Schwab has a lot of useful trading tools, and all of them are free of charge. First on the list is the broker's website, which itself is capable of placing trades for many security types, including stocks, options, ETF's, and fixed-income products.

Charles Schwab Review: Website

There is a trade bar that sits at the bottom of the screen. It displays market indices and trading data for an entered ticker symbol. Unfortunately, trades cannot be placed on it. If you click on the trade link, you will be taken to a web page where the order can be submitted. What we really liked about Schwab's trade bar was the ability to show a small pop-up chart with a selection of time frames.

Full charting on the website comes with technical indicators, drawing tools, comparisons to other securities, and company events. What really disappointed us was the inability to display a graph the width of the monitor.

StreetSmart Edge

If your trading needs demand something more, you can download and install StreetSmart Edge free of charge. This powerful program has much better charting than the website offers. A chart can be displayed full screen, and colors are customizable. Price history can be set to tick-by-tick.

Charles Schwab StreetSmart Edge Review

One feature that we really liked on Schwab's platform during my test drive was the Trade & Probability calculator that is integrated with the order ticket. It shows you the risk-reward payoff at certain dates, which can be adjusted.

Other great apps on the platform include Recognia for technical analysis, a security screener, and CNBC business news. One feature that's missing on StreetSmart Edge is direct-access routing.

Mobile App

Charles Schwab App Rating

If you're constantly on the go, like many other busy investors nowadays, you can manage your account and even trade securities with Schwab's user-friendly mobile app. It has a lot of handy features, including bill pay, check deposit, and funds transfer.

Charles Schwab Review: Mobile App

Every account you have with Schwab, including bank, futures, and securities accounts, are all listed after just one login on the app. Tapping on one of the accounts produces a new page that displays holdings and a bubble chart of the day's gain or loss.

The trading ticket on the app can submit orders for mutual funds, which is great because not all mobile apps incorporate this feature. Options, stocks, and ETF's can also be traded.

Research and Education

Schwab Investment Research Rating

Schwab traders have access to a large selection of learning materials on the company's website. There are many news articles from outlets such as Reuters. Schwab offers articles written by its own financial experts on countless topics, such as option strategies and how to trade ETF's.

A stock's profile page has a wealth of information on it. This includes not only immediate trade data, such as volume and bid-ask spread, but also dividend information and any outstanding preferred shares.

We thought the best feature was the stock reports Schwab offers. Many analysts are available, and their insights can be downloaded in pdf format free of charge. Ford Motor Company had seven reports available from researchers such as Morningstar and Argus. Schwab has its own grading system as well.

Charles Schwab Research

Schwab doesn't limit itself to just American financial instruments. It has a large selection of information on its site devoted to global stocks. For example, Schwab Equity Ratings International covers more than 4,000 stocks. There is also an account that can be opened that has the ability to trade on foreign markets.

Banking Features

Charles Schwab Banking Rating

Hands down, Schwab has one of the best bank accounts available in the United States, brokerage or otherwise. Schwab Bank is FDIC insured, and although Schwab obviously had its investment customers in mind when it built this financial institution, you don't need a securities account to open one of the company's bank accounts.

Schwab's checking account comes with free checks and a Visa debit card. ATM fees incurred anywhere on the globe are reimbursed, and there is no monthly limit on this policy. We don't know of any other bank that has this rule.

Currently, Schwab's checking account pays just 0.20% per annum in interest. This isn't very much, but it is higher than several traditional banks.

Other Financial Services

Schwab Financial Services Rating

Besides its securities investing and banking services, Charles Schwab works in many other financial areas. Schwab has advisors who specialize in estate planning, for example. Besides the guidance the company offers in this area, trust and estate accounts can be opened.

Futures trading at Schwab is available in a separate account. It can be linked to a Schwab bank or brokerage account. Contracts are $3.50 per side. A discrete browser platform, taken from optionsXpress, is used to trade futures.

Schwab offers some helpful resources to save for education. These include a 529 plan, a custodial account, and an Education Savings Account.

Charles Schwab Review: Pros

  • Personal guidance is available at no additional cost
  • 400 offices for personal visits
  • Rich selection of investment products
  • No surcharges on stocks under $1, large orders, or after-hours trading
  • No account maintenance or inactivity fees
  • Great customer service
  • Free DRIPs (dividend reinvestment plans)
  • Investment research available from several companies
  • 200+ ETFs with no commissions

Charles Schwab Review: Cons


Charles Schwab Review Summary

As you see from the above brokerage review, Charles Schwab underperforms some of its peers in a few areas, which is why a half star was deducted in a small number of categories. But it manages to deliver an overall impressive performance.

Open Charles Schwab Account

Open Schwab Account

Charles Schwab Questions and Answers

What investments can clients make through Charles Schwab?

Charles Schwab customers can trade the following asset types: stocks, bonds, mutual funds, futures, Treasury issues, options, CDs, insurance, ETFs, annuities, non-U.S. securities and ADRs, WEBs and Canadian foreign orders.

How much are Charles Schwab's fees?

List of all the fees Charles Schwab brokerage is charging is under this link.

What are Charles Schwab IRA fees?

List of all the IRA fees Charles Schwab is charging is under this link.

What interest does Charles Schwab pay on cash?

Charles Schwab interest rates on uninvested cash are discussed in Charles Schwab cash sweep options article.

What are Charles Schwab margin interest rates?

Current Charles Schwab margin interest rates could be found here.

What is Charles Schwab account minimum requirement?

Charles Schwab does not have minimum requirements for brokerage accounts.

What minimum deposit is required to open Charles Schwab account?

Charles Schwab minimum deposit requirement to open taxable or IRA account is $1,000 for cash account and $2,000 for margin account.

What is Charles Schwab clearing company?

Charles Schwab is self clearing.

How to close Charles Schwab account?

You could learn how to close or transfer your Charles Schwab account under this link.

Charles Schwab Margin Rates

Debit Balance Margin Rate
$0 - $24,999.99 9.825%
$25,000 - $49,999.99 9.325%
$50,000 - $99,999.99 8.375%
$100,000 - $249,999.99 8.325%
$250,000 - $499,999.99 8.075%
$1,000,000+ call 877-752-9749

Charles Schwab IRA Fees

Fee Amount
Charles Schwab IRA setup fee $0
Charles Schwab annual IRA fee $0
Charles Schwab IRA termination fee $0
Charles Schwab account maintenance fee $0
Charles Schwab account inactivity fee $0
Charles Schwab outbound full account transfer (ACAT) fee $50
Charles Schwab outbound partial account transfer fee $25

Charles Schwab reviewed by Rating: 4.5