Charles Schwab Review [2024]: One of the Best Online Brokers?

Charles Schwab is a discount broker that appeals to both beginner and experienced investors. It's known for its low fees, good customer support, and variety of account options that make it easy to customize your investment strategy. Overall, Schwab is one of the best online brokers out there, regardless of whether you're a hands-on day trader or a passive investor.

Check out our Charles Schwab review to see important details about fees and what types of accounts Schwab offers. This will help you decide whether Schwab is the right investment tool for you.

What is Charles Schwab?

Charles Schwab is a U.S. financial institution that was initially incorporated as First Commander Corporation in 1971. The name was changed to Charles Schwab & Co., Inc. in 1973, and the first Schwab branch was opened in California in 1975.

Today, many people know Charles Schwab as a discount brokerage. This means that Schwab provides brokerage services that tend to have low or no fees, especially commission fees.

As a discount online broker, Schwab appeals to beginner investors who might not want to spend loads of cash on fees while they’re still learning how to invest money. But Schwab also appeals to experienced, self-directed investors who want to avoid fees for frequent or occasional trades.

Charles Schwab is a large, global company. It has more than $7.13 trillion in total client assets with over 34 million brokerage accounts. Schwab competitors include Fidelity and E*TRADE from Morgan Stanley. TD Ameritrade was also a competitor until it was acquired by Schwab in 2020.

Apart from its brokerage accounts, Schwab also offers bank accounts, credit cards, retirement accounts, and more.

What types of accounts does Charles Schwab offer?

Charles Schwab provides a variety of account types, products, and services, including:

• Brokerage and stock-trading accounts
• Retirement and IRA accounts
• Education and custodial accounts
• Small business accounts
• Checking and savings accounts
• Bonds and CDs
• Credit cards

Brokerage and trading accounts

Schwab brokerage accounts are made for investing and have no maintenance or opening fees. You also don’t have to pay fees for withdrawals and there aren’t any restrictions on how much money you can invest. This makes Schwab an easier and cheaper choice if you’re used to paying extra money toward brokerage fees.

You have the option to open an individual or joint brokerage account. Joint accounts are meant to be shared with at least one other person, which is typically a spouse, but might also include another family member or a business partner.

Here are the different types of Schwab joint brokerage accounts:

• Joint tenant with rights of survivorship: Your share of the brokerage account passes to surviving owners upon your death.
• Tenants in common: Your share of the brokerage account passes to your estate upon your death.
• Community property: A brokerage account for a married couple where each spouse has half an interest in the account’s assets. Your share of the account passes to your estate upon your death. This type of account is only available in certain states.

Retirement and IRA accounts

Schwab IRAs and retirement accounts are designed for long-term investments, have no opening or maintenance fees, and could provide certain tax benefits depending on the type of account.

IRAs typically have contribution limits and eligibility requirements, and some might have penalties for withdrawals made before retirement. But their tax benefits make them some of the best options for retirement savings, especially if you don’t have an employee-sponsored retirement plan.

Schwab offers these types of IRAs:

• Traditional IRA: Good for immediate tax benefits, but you’ll be taxed on funds you withdraw later during retirement
• Roth IRA: Good for making tax-free withdrawals during retirement
• Rollover IRA: Good for rolling over a retirement plan from a former employer
• Inherited IRA: Designed for situations where you’ve inherited an IRA or an employer-sponsored retirement account
• Custodial IRA: Good for helping a child with earned income start putting money toward future savings

Education and custodial accounts

Schwab provides multiple accounts designed for building an education fund or simply building savings a minor can use when they’re older.

These accounts include:

• 529 Education Savings Plan: Good for putting away tax-advantaged savings that you or someone else will later use on education
• Education Savings Account: Good for setting up a tax-deferred savings account to pay for lifetime educational expenses (kindergarten through college)
• Custodial account: Good for giving a financial gift to a minor that they can later use for education or other things

Small business accounts

Schwab offers solutions that could be beneficial to small business owners, including:

• Small business retirement plans: Good for setting up business-related retirement plans. This includes individual 401(k) plans, SEP-IRA, SIMPLE IRA, personal defined benefit plan, business 401(k) plan, and company retirement account (CRA).
• Schwab One Organization Account: A brokerage account for organizations with at least $250,000 in total Schwab assets. These accounts have low trade commissions, no monthly service fees, and quick access to funds.
• CDs and money market funds: These are potentially more profitable ways to manage cash investments compared to traditional bank accounts.

Checking and savings accounts

Schwab offers checking and savings accounts, including:

• Schwab Bank High Yield Investor Checking account: This must be linked to a Schwab One brokerage account, but it’s still easy to set up. This account has no maintenance or activity fees and no account minimums, and you don’t have to use the linked brokerage account if you don’t want to. Your checking account balance also earns 0.45% (as of May 23, 2023) APY. The debit card associated with the High Yield Investor Checking has no foreign transaction fees and provides unlimited ATM fee rebates worldwide, which makes it an excellent choice for no international ATM fees.
• Schwab Bank High Yield Investor Savings account: This account has no monthly service fees or account minimums and offers unlimited ATM fee rebates worldwide. It also offers 0.48% (as of May 23, 2023) APY.

Credit cards

In partnership with American Express, Charles Schwab offers these credit cards:

• American Express Platinum Card^® for Schwab
• Schwab Investor Card^® from American Express

The Amex Platinum for Schwab receives the same benefits as The Platinum Card^® from American Express, including up to $200 in Uber Cash each year (terms apply) and complimentary access to Centurion Lounge, Priority Pass, and Plaza Premium airport lounges. Enrollment is required for select benefits and terms apply.

But on top of these benefits, you have the option to redeem your points for deposits into a Schwab brokerage account. This is a unique way to cash out Membership Rewards points that you won’t find on other Amex Platinum credit card variations. These deposits are typically beneficial if you don’t plan to redeem your rewards for travel.

The Amex Schwab Investor Card provides decent earning potential at 1.5% cash back on all eligible purchases. But the real benefit is that your cash back is automatically deposited into your linked Schwab account. This provides an opportunity to make a direct impact on your investments or savings by making eligible purchases. Terms apply.

What kinds of trades can you do with Charles Schwab?

Charles Schwab has a variety of trades and investment options available, including:

• Stocks
• Exchange-traded funds (ETFs)
• Mutual funds
• Index funds
• Options
• Cryptocurrency
• Bonds
• CDs
• Fixed income
• Money market funds

It’s interesting that Charles Schwab provides crypto trading because you might not find this as an available investment product on certain platforms, including Vanguard. Schwab also lets you own fractional shares in leading U.S. companies for as little as $5 through its Stock Slices service.

Schwab provides these trading platforms for its investors to trade stocks and other securities:

StreetSmart Edge

StreetSmart Edge is trading software that offers specialized tools, features, and customization options that are designed to help you invest quickly and easily. This includes being able to use research tools, calculators, and watchlists if you need them. You can also set up custom alerts for increased monitoring of orders and positions.

Schwab.com

You can easily view and manage your trade positions using the Schwab.com web trading platform. The Schwab website also allows you to research new investment opportunities, compare up to five products at a time against expert ratings, and filter through trading candidates using custom criteria.

You can also select different screeners or screens, which are different ways to view stock market information. This includes predefined screens such as “dividend growth” or “small cap growth.” There’s also an option to create your own screens, which could be useful for researching and choosing stocks that meet your investment needs.

Schwab mobile app

The Schwab mobile app is a helpful investment tool if you’re on the go. You can access your brokerage accounts from your phone and use them to place trades and monitor positions. Real-time market data and the latest news are also available through the Schwab app.

Keep in mind that mobile apps don’t often have the same functionality as desktop or web apps. But you can still participate in mobile trading with the Schwab app using an iOS or Android device.

What kinds of fees does Charles Schwab charge?

Charles Schwab generally has low or no trading fees. The full Schwab pricing schedule is available online, but here’s the breakdown of some of the primary fees:

Type of pricing	Pricing
Trading and commission fees	Online trades (stocks and ETFs): $0 Online options: $0.65 per contract Online futures and futures options: $2.25 per contract Schwab Mutual Fund OneSource: $0 Other mutual funds: Up to $74.95 per purchase Broker-assisted trades, options, Schwab Mutual Fund OneSource, and other mutual funds: Base pricing + $25 service charge
Account opening and maintenance fees	Brokerage account: $0 Schwab Trading Services account: $0
Account minimum fees	Brokerage account: $0 Schwab Trading Services account: $0
Investment management fees + account minimums	Schwab Intelligent Portfolios: No advisory fee + no commissions; $5,000 minimum Schwab Intelligent Portfolios Premium: $300 one-time planning fee + $30 monthly advisory fee; $25,000 minimum Schwab Wealth Advisory: Fees start at 0.80%; $1 million minimum Schwab Advisor Network: No charge for referrals, fees vary by advisor; $500,000 minimum Schwab Managed Portfolios: Fees start at 0.90%; $25,000 minimum

Although Schwab doesn’t offer completely free trading, its brokerage accounts are generally commission-free. This includes no commission fees or transaction fees for online trades involving stocks and ETFs.

Note that this zero-commission structure doesn’t include online futures and futures options. You can also expect a $25 service charge for many broker-assisted online trades, options, and mutual fund transactions.

You don’t have to worry about account minimums for self-directed brokerage accounts, which makes it easy to get started without putting down a large investment. But expect some account minimums and potentially more fees if you venture into different Schwab managed portfolios.

Schwab Intelligent Portfolios pricing

Schwab Intelligent Portfolios has a $5,000 account minimum, but no financial advisor or commission fees. This is where you can use a Schwab robo-advisor to get started with automated investing.

Moving to Schwab Intelligent Portfolios Premium offers unlimited guidance from a certified financial planner in addition to your robo-advisor. But it has a $25,000 account minimum, a $300 one-time planning fee, and a $30 monthly advisory fee.

These types of fees and account minimums continue to increase all the way to the level of Schwab Wealth Advisory. Here, you have a $1 million account minimum and fees start at 0.80%.

How to open an account with Charles Schwab

Follow these simple steps to open an account with Charles Schwab:

1. Navigate to the Charles Schwab website and select “Open an Account.”

2. Choose the type of account you want to open. Brokerage accounts include individual and joint brokerage accounts. Automated and managed portfolios include Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium.

3. Select “Get started” after choosing your account type (we chose an individual brokerage account for these steps).

4. Enter the required information, including your first and last name, date of birth, Social Security number, email address, and phone number.

5. Continue the process to finish creating your account, including entering a username and password, going over account features, and reviewing agreements.

You can also get help with opening a Charles Schwab account by calling 866-232-9890 or visiting an in-person branch. However, the online application is typically the easiest process and takes about 10 minutes to complete according to Schwab.

Here are a few ways you can fund your new Schwab brokerage account:

• Electronic funds transfer from an external account or another Schwab account
• Wire transfer from another financial institution
• Check deposit at an in-person Schwab branch or by mail

FAQs about Charles Schwab

Other investment platforms to consider

If Charles Schwab doesn’t have the right investment accounts for you, consider these other options.

Stash

Stash¹ is an investment app that doesn’t have the long pedigree Schwab does, and it doesn’t offer as many services and products as Charles Schwab. But Stash simplifies investing as much as possible to provide easy ways for beginners to get started.

You can start investing with Stash with as little as $5, including in fractional shares, of thousands of stocks, bonds, and ETFs, as well as cryptocurrencies. You can also earn stock as you shop by using the Stock-Back Card.²

Read our Stash review.

Robinhood

Robinhood is an investment app that’s similar to Stash and appeals to active traders. You might choose Robinhood over Schwab if you want to test how investing works with small amounts of cash.

It’s free to get started with Robinhood and you can invest in stocks, options, and ETFs with as little as $1. You can also buy and sell cryptocurrency such as bitcoin, ethereum, litecoin, and dogecoin without any commission fees. Compare that with crypto exchanges that charge up to 4% in fees.

Read our Robinhood review.

Bottom line

Charles Schwab is an established and trusted discount brokerage that makes sense for beginner and experienced investors. It has low fees, including no commission fees for online trading of stocks and ETFs. It’s also helpful that clients can contact Schwab customer support 24/7 with any questions or concerns.

But it makes sense to compare Schwab with other financial institutions to see which company offers the best investing products for you. Check out our list of the best brokerage accounts for our top recommendations.

FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.