Charles Schwab Review
4-star brokerage firm rating

Charles Schwab Review



Charles Schwab Commissions, Fees, and Minimum Deposit


InvestmentsCommissions
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
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
Promotion and login linksCharles Schwab login, Charles Schwab promotions


Charles Schwab New Account Setup

We begin Charles Schwab review with new account application process which 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.

Three days after we verified deposits Schwab made into our bank account, we still had to call the broker 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.

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? The firm 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 the account from a customer service representative who will answer all your questions.


Charles Schwab Mutual Funds Review


Schwab offers its clients over 5,100 mutual funds to buy and sell. More than 3,300 of these carry no transaction fee. Slightly over 3,100 funds have neither load nor transaction fee. While the total number of funds is low by industry standards, the broker's list of no-load, no-transaction-fee funds is one of the largest. It's simple to search through all of these products using the firm's handy screener. Users can specify several different criteria, including inception date, return history, and fund category. Other useful search measures include 30-day SEC yield, portfolio turnover, and standard deviation. Schwab has other mutual fund resources as well. The broker's customers can access report cards on mutual funds free of charge.

There is information on Schwab's target date funds, which are designed for retirement accounts. There is also an article on MarketTrack Portfolios, which are built of out of passively-managed index funds.

Minimum initial purchase amounts vary by fund. Some are as low as $100 while other funds are as high as $5 million. IRA's seem to have the same minimums as regular accounts. Schwab does not have any charge for mutual funds with low balances. Funds that carry a transaction fee are $76 on the buy side. Fortunately, there is no charge to sell.


IRAs


Schwab clients can open a Traditional, Roth, Inherited, Rollover, SEP, SIMPLE, or Custodial IRA. There are no special fees for any of these accounts—no setup, inactivity, or annual fees. The broker does require a minimum deposit of at least $1,000 for all IRA's except the Custodial, which has a $100 minimum. The $1,000 opening deposit for non-Custodial accounts can be waived by setting up regular monthly deposits of at least $100 into the account.

The Schwab website has a lot of resources for retirement planning. There is a required minimum distribution calculator that helps investors determine yearly amounts that need to be withdrawn. Another tool evaluates whether a Roth IRA conversion is advisable based on a series of questions about the user's financial status. There's also an excellent retirement planning quiz that leads users step-by-step through a series of questions that then provides the correct answers.


Charles Schwab Review: Website/Trading Platform/Tools


Website

Schwab's website is user friendly. Upon a single login, customers will see all affiliated accounts. These include the brokerage account, Schwab Bank accounts, and any accounts with Schwab's subsidiary, optionsXpress. Trades can be placed for all securities, including bonds and CD's. The site has excellent tools for research, and a customer service tab displays all methods that are available to reach a representative.

Trade Source is available within the website. This is a browser-based trading platform that displays market news, account and position data, indices, market heatmaps, and charts. After entering a symbol, buy and sell buttons are displayed, making order entry fairly straightforward. Trade Source has all the necessary tools for effective trading, all in a web browser.


Charles Schwab Review


StreetSmart.com

Schwab has a more advanced trading system that is web-based but not in a browser. StreetSmart.com is launched from inside Schwab.com. It is Java-based and creates a discrete window. On the platform, users will find advanced trading tools such as option chains and Level II quotes. One disadvantage of StreetSmart.com is that users are frequently taken back to Schwab.com for various account functions, such as funds transfers and ETF screening.


StreetSmart Edge

Schwab’s most advanced trading platform is StreetSmart Edge. The program is available through the cloud or as a desktop program. It has many features that sophisticated traders will want. Some examples are Level II quotes, live streaming of CNBC financial news, national best bid and offer (NBBO) data, options trading, ETF and stock screeners, and conditional orders.

Charting is advanced and customizable. The time scale can be anywhere from monthly to tick-by-tick. Candlesticks are available, as are OHLC bars, point and figure, area, and line. The software includes many technical analysis tools, which can be customized with different colors and stroke styles.

The software is available free of charge to Schwab Trading Services customers. In order to qualify as a Trading Services client, investors must have at least $1,000 in a trading account. In comparison, Fidelity and E*Trade have higher minimum requirements for their advanced platforms. On the other hand, TD Ameritrade has no frequent trader requirement for Thinkorswim, its advanced platform. Read StreetSmart Edge review.


Charles Schwab Review 2016


Mobile Trading

Schwab clients can trade on-the-go with the broker's handy mobile app. It can be used on iPhone, iPad, Apple Watch, Android devices, Kindle Fire, and mobile web. It takes just a few minutes to learn where everything is at. Important features include mobile check deposit, funds transfer between Schwab and non-Schwab accounts, order placement, bill pay, and a customer service contact. Charles Schwab app is rated with a low, 2.5 star score at iTunes app store.


Charles Schwab Mobile App


Charles Schwab Pros


  • Personal guidance is available at no additional cost
  • 300+ offices for personal visits
  • Rich selection of investment products
  • No surcharges on penny stocks, 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 Cons


  • High commissions on stocks, options, mutual funds, and ETFs
  • High margin rates


Recommendations


With Schwab's large selection of NTF mutual funds, the broker is a great choice for investors who plan to invest mainly in those products. Schwab also has a list of over 200 commission-free ETF's, the largest in the industry. Overall, Schwab is a great choice for fund investors.


Charles Schwab Review Summary


Charles Schwab is one of the five largest brokerage houses in the United States and it has been in business for over 40 years. The firm offers an impressive selection of investing products including over 14,500 mutual funds and 198 commission free ETFs.

Schwab 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 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, a customer can schedule a no-cost, no-obligation consultation to discuss his or her goals (both short-term and long-term), evaluate current investments relative to the 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 the competitive advantage like it used to be. The firm's $8.95 rate per stock or ETF trade is pretty high for 2016, and the $76 fee to buy a mutual fund is one of the most expensive among discount brokers. There are, however, over 3,500 no-load mutual funds available at Schwab’s Mutual Fund OneSource service commission free. Short-term redemption fee of $49.95 will be charged on sale of these funds if held for 90 days or less.

The investment research amenities at the company are excellent. Customers have access to free stock reports from S&P Capital IQ, Thomson Reuters, Credit Suisse, and others. They can also see Schwab Equity Ratings, which cover approximately 3,000 U.S. stocks and grade them on an A, B, C, D, and F scale. Mutual fund and ETF investors have access to Morningstar Ratings as well as Schwab's own expert picks.

The one big problem we have noticed, is that the company didn't list all its fees correctly on its website. For example, Full Account Transfer Out Fee was $50 but the website listed it as $0, Partial Account Transfer Fee was $25 but it was listed as $0 on the website. Many other fees were nowhere to be found on their fee schedule. It looked dishonest and not fair to prospective customers. They still somehow have trouble listing the fees on the webpage, so they put them in PDF document found here.

In summary, Charles Schwab put together a really nice suite of services for its customers, and most reviewers rate the firm at about 4 stars. Ultimately, it is up to each investor to decide whether Schwab's offering is valuable enough to pay higher fees or should he or she go with a lower priced broker.


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Charles Schwab reviewed by Brokerage-Review.com on . Rating: 4


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