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|
|Fees||Charles Schwab fees|
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.
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.
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: 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.
Charles Schwab bought one of the best brokerage firms in the industry, OptionsXpress (see review),
that still functions as a separate company, though it is in process of integrating with Schwab. OptionsXpress provides a much better set of trading tools,
a great selection of free services, a simulated trading environment, a $100 bonus for opening a new non-IRA account, and 50 free trades for IRA -
Open OptionsXpress account and get 50 free trades.
Transaction-fee, no-load mutual funds are $9.95 per transaction
at OptionsXpress versus $76 at Charles Schwab!
Reviewed by Brokerage Review on
Reviewed by Editor and 30+ Charles Schwab customers.