Charles Schwab vs Interactive Brokers: Commissions, Fees and Investments 2012
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- Stocks and ETFs: $8.95
- Stocks and ETFs broker assisted: $33.95
- Stocks and ETFs phone trades: $13.95
- Options: $8.95 plus $0.75 per contract
- Mutual funds: $49.95. Mutual Fund OneSource® Funds - free
- 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: $8.95
- Commercial Paper and Foreign Bonds, Unit Investment Trusts: call for pricing
- Investment products: stocks, bonds, mutual funds, futures, treasury issues, options, CDs, insurance, ETFs,
annuities, non-U.S. securities and ADRs, WEBs and Canadian foreign orders
- Minimum to open Charles Schwab account: $1,000
- All Charles Schwab fees
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- Stocks and ETFs: $0.005 per share with $1 minimum per trade for SMART routed orders
- Options: $0.70 per contract plus exchange fees
- Mutual funds: $14.95 per transaction
- Investment products: stocks, options, ETFs, bonds, futures, currency transactions
- Minimum to open Interactive Brokers account: $10,000 for non-IRA account, $5,000 for IRA account
- All Interactive Brokers fees
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- Traditional banking features: credit cards and checking accounts
- Around 300 offices for personal visits, deposits and 24/7 support
- Great, varied research
- Rich selection of investment products
- Low minimum balance requirement: $1,000
- Excellent customer service
- Free dividend reinvestment
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Low stock commissions for orders with 800 shares or less
- Professional trading platform
- Great margin rates
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- High commissions on stocks, options, mutual funds and ETFs
- Average trading tools
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- $10,000 minimum to open most accounts
- $30/month minimum commission requirement to avoid $10/month fee ($20/month fee if account balance less than $2,000)
- $10/month for IB market data feed (waived if trade commissions are more than $30/month)
- $7.50 quarterly fee on IRA accounts ($30 per year)
- Fees on modified or canceled orders
- Trader Workstation is designed for professional traders, it is not intuitive; difficult to learn
- Expensive to make trades with over 1,500 shares
- A lot of complains about snobby customer service (experienced it ourselves)
- $1.20 fee to modify or cancel an option order
- Merciless margin tightening and margin calls - IB doesn't care if their customers get completely wiped out
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Charles Schwab vresus Interactive Brokers: Comparison Summary
Charles Schwab (Charles Schwab Review)
is more expensive discount brokerage firm than
Interactive Brokers or IB (Interactive Brokers Review)
for orders of up to 1,800 shares. Commissions are
$8.95 per stock and ETF trade at Schwab and $0.005 per share with $1 minimum per trade at IB.
Both online brokers don't have penny stock, extended hours and large order surcharges. Interactive Brokers charges $20 per month
($30 per month for accounts less than $2,000)
those customers making less than $30 in commissions in that month.
Unlike IB, Charles Schwab doesn't have monthly fees. There are also no IRA setup and annual fees. Despite of that, it was not included in our list of
Best IRA Brokers in 2012.
With Charles Schwab investors get decent banking services, wide selection of investment products and great customer service.
But its trading tools and website need redesign and capabilities upgrade.
IB provides its customers with great trading platform, access to many markets and great margin rates. The company, however,
is known to have a very rude customer service and merciless margin calls that wipe out many clients during market's wild swings.
Interactive Brokers professional trading platform is hard to learn for new investors. Both discount brokers lack an online community,
where users could ask questions and learn from more experienced investors. People new to investing are better off with one of our
Brokers for Beginners recommendations.
Because of high commissions at Charles Schwab, and terrible customer service, monthly fees and high account balance requirements at IB,
we can't recommend either one of these online brokers.
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