TD Ameritrade Review 4-star brokerage firm rating

Charles Schwab Review

Great service but high commissions on all products

Charles Schwab Review: Commissions, Fees, and Minimum Deposit

Stocks and ETFs $8.95
Stocks and ETFs broker assisted $33.95
Stocks and ETFs phone trades $13.95
Options $8.95 + $0.75 per contract
Mutual funds $76 to buy, $0 to sell. OneSource® Mutual 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

Investments stocks, bonds, mutual funds, futures, Treasury issues, options, CDs, insurance, ETFs, annuities, non-U.S. securities and ADRs, WEBs and Canadian foreign orders
Charles Schwab minimum deposit to open account $1,000
FeesCharles Schwab fees

Charles Schwab New Account Setup

The new account application for Charles Schwab is very frustrating. There are many unnecessary questions, such as drivers license information. Then there was a bug on the screen where a new user creates a password: it had two conflicting password requirements. It took five minutes of constant trying to get past that screen, and the result was one ridiculous, forced-on-us password to remember.

Charles Schwab managed to hide the place for entering bank information to make ACH transfers very well: it's located on Account Features screen. It's called Schwab MoneyLink, and you must click on it to expand it. After entering your bank information you'll see the message: "Complete your MoneyLink enrollment. In about three days, you’ll receive an email with instructions to verify your deposit. Once enrolled, you can transfer money into your account." Three days later we received an email indicating that deposits Schwab made into our bank account were ready to be verified. After we verified the deposits, we still had to call Schwab to "activate" the account. When you transfer actual money from bank to the brokerage - let's say you start on Monday - the cash will become available for trading only on Friday. This is much too long and the process is entirely too complicated.

Uninvested cash in your account will earn interest in accordance with the Schwab One® interest feature. What is this feature and exactly how much interest will you earn? Charles Schwab graciously provides customers with a 23-page document to answer these questions.

On the brighter side, Charles Schwab offers checks and a Visa debit card for managing money. You also will get a phone call on the day you open your account from a customer service representative who will answer all your questions.

Charles Schwab Review: Website/Trading Platform/Tools

Trading tools at Charles Schwab are average, and nothing more. All the screens are well-designed, and orders are executed reasonably fast. Trading tools, however, lack the richness of features, versatility and customization found in many more advanced trading platforms, like ThinkOrSwim from TD Ameritrade. Charting is done well, however, with over 30 different indicators available.

Charles Schwab Review

Clients can use the Schwab Mobile app to view real-time market data, place trades and even watch a live stream of CNBC from their smartphone or tablet. Charles Schwab is lacking in the mobile app arena compared to other online brokerages in the industry. For those wanting robust analyst ratings and recommendations the mobile app is lacking. For the investor that is somewhat new the mobile apps are easy to navigate and devoid of clutter.

Charles Schwab Review 2015

Customers who execute three or more trades per month can get access to StreetSmart Edge - an advanced yet easy to use trading platform that has charts, news, order entry, live data, options chains, and even technical and fundamental research - all in a single window. It is necessary to call customer service to have access to this platform set up.

Trading from the order execution screen and the portfolio menu are well done. Modifying and canceling orders is fast and intuitive. Selling existing positions from the portfolio screen could be a little more convenient.

Charles Schwab Review 2015

Charles Schwab Review: Pros

  • Personal guidance is available at no additional cost
  • 300+ offices for personal visits and deposits
  • Great, varied research
  • Rich selection of investment products, including large number of mutual funds - over 14,500
  • No surcharges on penny stocks, large orders, or after-hours trading
  • No account maintenance or inactivity fees
  • Very good customer service (but no chat)
  • Free DRIP (dividend reinvestment plan)

Charles Schwab Review: Cons

  • High commissions on stocks, options, mutual funds and ETFs
  • High margin rates
  • Company doesn't list all its fees on its website
  • Advanced trading platform available only to clients executing three or more trades per month
  • Long, complicated new account setup and funding
  • No free streaming quotes (requires 120+ equity and options trades in the last 12 months, or 30+ equity and options trades in either the current or previous quarter, or $1 million in assets)

Charles Schwab Review: Summary

Charles Schwab brokerage offers an impressive selection of investing products, and some of them are not to be found in many other discount brokerage firms: CDs, insurance annuities, ADRs, and WEBs. On the other hand, most customers do not invest in these assets.

The firm does not have account maintenance and inactivity fees. There are no surcharges for large orders, penny stocks, or after-hours trading. Having an option of opening a checking account with one's brokerage firm is always nice, and the company does offer top-notch customer service.

Charles Schwab does not charge IRA setup and annual IRA fees, but it was not enough to make it onto the Best IRA Firms list.

As a Schwab client, you can schedule a no-cost, no-obligation consultation to discuss your goals (both short-term and long-term), evaluate your current investments relative to your goals, and get specific recommendations and next steps. This is definitely valuable to somebody just starting out but should not be considered a substitute for thorough self-education in investing.

Charles Schwab was the first discount brokerage company in the U.S., but these days its pricing is no longer as competitive as it used to be. The firm's $8.95 rate per stock trade is pretty high for 2015, and the $76 fee to buy mutual fund is the most expensive among all discount brokers.

The other big problem we have noticed, is that the company doesn't list all its fees correctly on its website. For example, Full Account Transfer Out Fee is $50 but the website lists it as $0, Partial Account Transfer Fee is $25 but $0 on the website. Many other fees are nowhere to be found. It looks dishonest and not fair to prospective customers.

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Charles Schwab Reviewed by Brokerage Review on . Reviewed by Editor and 30+ Charles Schwab customers. Rating: 4

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