Charles Schwab Investing Review

Charles Schwab is a great fit for both beginners and advanced investors because of its low fees.

Minimum Deposit
$0.00
Fees
$0.00
Google App Store Rating
4.75/5
SimpleScore
4.4 / 5.0
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SimpleScore Charles Schwab 4.4
Min. Deposit 5
Fee 5
Customer Satisfaction 2
Resources 5
Support 5

Charles Schwab was founded in California in 1971 and has grown to become one of the largest financial service providers in the country. It has approximately $3.94 trillion in client assets and serves millions of customers nationwide. It’s one of the best and most trusted discount brokerage firms, but is it right for you?

In this article

    Charles Schwab at a glance

     Account Min.Stocks & ETFsBondsMutual FundsKey Benefit
    Charles Schwab$0$0 per online trades$0 new issue bonds; $1 secondary issues$0 for Schwab and OneSource Funds; up to $49.95 per purchase for other fundsRobust research offerings and tools

    What we like about Charles Schwab

    New investors with little savings will appreciate that there’s no account minimum, and active traders will love that they can trade stocks, ETFs, treasury bonds and no-load mutual funds for free.

    In addition to low fees, Schwab has some of the most comprehensive research offerings of any discount broker. It offers news from Reuters and market commentary from top providers such as Ned Davis, Credit Suisse and Morningstar. You’ll also have access to a suite of investing tools that will help you make the best trading decisions possible. Some of our favorite tools include the Idea Hub, which generates trade ideas based on your specific goals, and the portfolio evaluation feature, which tracks your portfolio’s performance and makes suggestions to improve it.

    It’s also worth noting that Schwab has an extensive list of fee-free mutual funds and physical locations that you can visit for investing advice.

    Things to consider

    Although Schwab has a competitive fee structure overall, the fee for buying certain mutual funds is pretty high. You’ll have to pay as much as $49.95 every time you purchase a transaction-fee fund, which adds up. If mutual funds are a big part of your investment strategy, you may want to consider other brokers that have lower transaction fees, such as E*TRADE.

    Another drawback of going with Schwab is that its automated investment accounts have a high minimum deposit. If you want your portfolio to be managed by a robo-advisor, you’ll need to have at least $5,000 on hand to invest.

    One last thing to consider is that Schwab stopped offering forex trading. If that’s important to you, it’s worth looking into other brokerages that offer it, such as TD Ameritrade.

    Stock and ETF trading

    Schwab doesn’t charge any commissions on stock trades, which makes it a great option for price-conscious traders. The broker also has a number of tools to guide your investing decisions. You’ll have access to advanced charting tools, equity ratings and stock screeners that will help you identify high-performing stocks. You’ll also be able to open up a Schwab Global Account and trade international stocks in 12 foreign markets to expand your portfolio.

    Additionally, Schwab lets you trade its ETFs free of charge. It offers more than 2,000 ETFs through its online platform, plus a range of trading tools. While it’s $0 for online trades, there is a $5.00 service charge for automated phone trade and $25.00 service charge for broker-assisted trades. You’ll have access to a list of low-cost ETFs that have been handpicked by experts and a Personalized Portfolio Builder that will help you create a diversified portfolio of ETFs.

    Bond trading

    Schwab has more than 80,000 bonds that you can trade for a low fee. New bond issues are free, and secondary trades cost just $1. Treasury bonds are free whether they’re new issues or secondary trades.

    To help you choose the best bonds for you, Schwab has an advanced bond screener tool and fixed income specialists who you can go to for one-on-one advice. You’ll also have access to detailed reports on the bond market from Schwab’s team of experts.

    Options and futures trading

    Schwab allows you to trade options for a competitive fee of just $0.65 per contract. In addition to low fees, the company offers advanced options tools that will help you generate trade ideas, analyze trades before you make them, and buy and sell multiple options simultaneously.

    Schwab also offers futures trading, which is a big plus considering some major brokers like Fidelity don’t. You’ll be able to trade a wide variety of indexes, currencies and commodities for $1.50 per contract. If you’re new to futures, Schwab has educational videos to get you up to speed and trading specialists who can give you personalized support 24 hours per day.

    Trading platform

    Schwab has two trading platforms: Trade Source and StreetSmart Edge. Trade Source is an easy-to-use online platform that’s perfect for beginners. It allows you to monitor your portfolio, access market and company research, sort through stocks and options with a variety of screeners and place orders on a simple, intuitive trade ticket.

    If you want access to more advanced charting tools, you can download StreetSmart Edge. It allows you to create custom charts and watch lists, set alerts and link complementary tools together to create better trading workflows. The platform gives you access to extensive research, real-time news updates and a commercial-free live stream of the CNBC broadcast that runs 24 hours a day.

    Mobile app

    In addition to its two desktop trading platforms, Schwab has an app that allows you to view market data and monitor orders on all your mobile devices, including your Apple Watch. You’ll have access to important news and updates, charts, studies and options trading tools wherever you are. You’ll also be able to make trades, view detailed account summaries and transfer funds from your phone or tablet.

    Research and resources

    Schwab’s research offerings don’t disappoint. The broker provides breaking market news from outlets like Reuters and Briefing.com. You’ll also get access to equity research from leading providers such as Argus, Ned Davis, Morningstar and Credit Suisse. And if that’s not enough, Schwab provides additional insights and analysis from its own experts, including lists of the best mutual funds and ETFs.

    If you’re new to trading, Schwab has extensive educational resources to help you get started. The broker has an online learning center where you can read about trading strategies and a community forum where you can talk to other traders. If you need more hands-on help, you can visit your local branch to attend a free workshop or speak to an experienced financial advisor one-on-one.

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    Methodology

    SimpleScore

    The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.

    For every review, our editorial team:

    • Identifies five measurable aspects to compare across each brand
    • Determines the rating criteria for each aspect score
    • Averages the five aspect scores to produce a single SimpleScore

    Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best IRAs and Roth IRAs of 2020.

     

    Why do some brands have different SimpleScores on different pages?

    To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

    However, it’s also possible for brands to have multiple SimpleScores. For example, when we apply our methodology to TD Ameritrade’s IRA products, it scores a 4.2 out of 5. However, in our stock trading SimpleScore review, it scores a 3.8 out of 5. While the two products are similar, we created separate rating criteria for the two products based on industry standards.

    Questions about our methodology?

    Email Hayley Armstrong at hayley@thesimpledollar.com.

    Minimum deposit

    How much do customers have to deposit when opening an account? We reviewed the minimum deposit requirements for each brand and assigned a score accordingly.

    Fee

    Many IRA accounts charge a fee, but we scored brands higher if they have low or no fees associated with the account.

    Customer satisfaction

    We leveraged J.D. Power’s 2020 U.S. Self-Directed Investor Satisfaction Study to rate each brand in customer satisfaction. If the brand was not scored, we simply averaged the other four scores.

    Resources

    We reviewed the resources available to customers for each brand. Resources such as market insights, instructional blogs, Morningstar reports and more were considered in this metric aspect.

    Customer support

    When customers need support from the IRA account provider, it’s important that they have options. We reviews brands based on the number of channels of support offered to customers.

    Jessica Walrack

    Contributing Writer

    Jessica Walrack is a personal finance writer at SuperMoney, Interest.com, The Simple Dollar, and PersonalLoans.org. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and somewhat fun.