Is Charles Schwab a Scam?
Thinking about opening a financial account with Charles Schwab? If you are, you might wonder if it’s safe. Check out our findings before you decide.
Is Charles Schwab Safe?
There are multiple agencies that watch Schwab to ensure it follows rules and
regulations. First is the SEC. The SEC is the U.S. government's main enforcer of
securities laws. It can fine broker-dealers and file civil charges for
breaking the nation’s securities laws. Schwab’s SEC # is 801-29938. It has been under SEC oversight since 1971, so it has a long history in the industry.
Besides SEC supervision, Schwab is also part of the Financial Industry Regulatory Authority
(FINRA). This group creates rules that member firms must obey. Brokerage firms don’t have to
join FINRA, but Schwab is a member. Its FINRA # for self-directed broking is 5393.
Schwab also has an investment-advisory branch that operates as a separate entity with its own FINRA number, 151739.
On Schwab’s BrokerCheck profile, there are 289 disclosures. These are customer complaints about various issues. Typically, Schwab neither admits nor denies them, and most ended in arbitration.
FINRA and the SEC oversee securities trading. Schwab also deals in futures, which the National Futures Association (NFA) regulates. Schwab’s NFA # is 0477394.
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Charles Schwab BBB Reviews and Complaints
The Charles Schwab Corporation, which covers banking, securities, and futures, has a listing at the Better Business Bureau, but it’s not BBB accredited. Companies aren’t required to seek BBB accreditation, and many don’t.
There have been 93 complaints filed with the BBB against Schwab in the past year. Examples include poor customer service and locked accounts. For specifics,
follow this link.
Despite this small number of issues, Schwab holds an A+ rating on the BBB site, which is the best score possible.
Insurance
Schwab’s bank and brokerage accounts both carry insurance. The bank accounts have coverage from the Federal Deposit Insurance Corporation (FDIC) up to $500,000 per client. Schwab Bank’s FDIC # is 57450.
Brokerage accounts have insurance through SIPC. The Securities Investor Protection Corporation has defended brokerage customers since 1970. SIPC is funded by member firms, not the government, unlike FDIC insurance.
SIPC protects the number of shares in an account (not the value) up to $500,000 per customer, with half of that applied to cash. Because some Schwab clients might exceed these amounts, Schwab also carries extra coverage from Lloyd’s of London.
This extra policy covers up to $150 million per account (with a $1.15 million cash limit) and has a firm-wide limit of $600 million.
Futures accounts have no insurance, which raises their risk profile.
Visit Charles Schwab Website
Visit Schwab Website
Is Charles Schwab Safe Judgment
Charles Schwab is not a scam. It’s fully legitimate and trustworthy as a brokerage. As with any
investment, there are risks, mainly the possibility of losing money in a market decline. If that’s acceptable, read on for our review of Charles Schwab’s
offerings.
Charles Schwab Review 2025
Before opening your next investment account, you have to take a look at Charles Schwab offers. This
financial powerhouse offers a wide range of services beyond standard investing.
Investing and Trading
Where to begin? Schwab provides a massive selection of products and services. Let’s start with stocks and other securities.
Schwab’s brokerage and advisory accounts include access to:
- Stocks (including OTC and international)
- Bonds and other fixed-income products
- Options
- Futures (plus options on futures)
- Annuities
- Forex
- Mutual funds, closed-end funds, and ETFs
The stock category includes REITs, ADRs, and some foreign exchanges. Orders can be placed with cash or margin.
Schwab’s advisory service comes in automated and traditional versions. In the traditional plan, you can meet with a financial advisor online or at a local branch. The robo plan invests only in ETFs, but it can be set up as a hybrid with a human advisor.
For self-directed traders, Schwab has Investing Themes™ (found under the Trade tab). These are AI-built themes like autonomous vehicles or cancer research. Schwab clients can look through them and invest.
Those are just some of the brokerage features. Schwab also supports futures and forex. There are more than 65 currency pairs available and a forex desk. On the futures side, you can trade a variety of contracts, including Bitcoin and Ethereum.
If you want to reduce taxes, Schwab has many tax-advantaged accounts, including UTMA/UGMA, retirement, and 401k plans.
Banking
Schwab isn’t just about investing. It also owns Charles Schwab Bank, which has FDIC coverage and some useful products.
First, there are bank accounts. Schwab’s checking and savings come with perks like a debit card and Zelle. The interest rates are rather low, but there are no fees or required balances. Also, the debit card has no foreign transaction fees and gives unlimited ATM-fee refunds.
Beyond that, Schwab teams up with American Express to offer credit cards, one of which has no yearly fee.
Another banking service is securities-based lending, where you can borrow against your holdings. Schwab calls these pledged-asset lines, which start at $100,000 with no setup or early payoff fees. Mortgages are also available.
Financial Planning
Schwab’s brokerage and advisory clients who need help with their finances can get it through a Schwab advisor or an independent local advisor in Schwab’s large network.
These advisors can offer help with many topics, though it varies by advisor. Possible areas include:
• Retirement planning
• Tax-wise investing
• Family and education planning
• Risk management
• Charitable giving
• And more...
Through Schwab and third-party advisors, customers can buy insurance for disability, life (whole or term), and long-term care.
Opening an Account
Anyone, including non-U.S. residents, can open a brokerage or robo account on
Schwab’s
site or mobile app. On the website, click the orange-brown button at the top and pick the account type. Full-service advisory setups need to be opened at a branch or by calling in. You’ll need separate accounts for futures and forex, but that’s easy once you have a primary brokerage account.
To open an account on Schwab’s main mobile app, tap More in the bottom-right corner. Next, tap the link to open an account. Scroll through the options, choose the one you want, and give the info needed.
In addition to its U.S. division, Schwab has sites for international clients, customers in Hong Kong, and people in the UK. Many (but not all) countries are eligible under the global platform.
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Customer Service
Schwab clients needing help can visit one of its 350-plus U.S. branches. There are also branches in Hong Kong and the UK.
These offices have limited hours, but phone help is available around the clock every day (some departments have shorter schedules).
Schwab’s website includes a chat option that runs 24/7 from anywhere in the world. It starts with a chatbot, which does a fair job answering questions, but you can type “human” to speak with a real person.
To use chat, click the headset icon in the top-right corner of the website and select the chat link. On the app, look for the Schwab Assistant icon at the top.
Schwab’s website also offers a document upload tool. Click “Contact Us” under the service drop-down menu, then scroll down that page to find the upload link.
Education and Research
Both the website and app host a lot of learning tools and research resources. Stock pages include free reports from several analysts like CFRA and Argus, and you can download their PDFs at no charge.
There are screeners for every product Schwab offers. Options come with advanced tools like a strategy finder.
Under the Learn menu on the website, you’ll find podcasts, articles, videos, webcasts (live and recorded), virtual classes, in-person seminars, Onward magazine, and self-guided lessons. The Schwab Network, a video channel, is here too.
Fees and Minimums
With so many services, you might expect high costs, but most are quite reasonable. Educational tools are free, often even for non-clients.
Schwab’s brokerage account has no ongoing charges, and trades in many U.S.-listed securities (stocks or ETFs) are commission-free. International shares do have fees, which vary by market.
The robo service at Schwab doesn’t charge a management fee and needs $5,000 to start, but the hybrid robo-human plan costs $30 monthly plus a $300 one-time setup. Traditional advisory accounts come with separate fees and minimums.
Margin
Schwab clients can use margin for advanced options trades, short selling, and buying with borrowed
funds. Interest rates are tiered from 12.575% down to
10.875%. Day-trading margin in taxable accounts is
4x, while IRAs can have limited margin. Taxable accounts with $125,000 or more can sign up for portfolio margin.
Website
Schwab’s website is straightforward, featuring a top menu for easy navigation. On the right side is SnapTicket, the main order ticket. It has trailing and stop orders plus specific options for short selling or buying to cover. A more advanced ticket, the All-In-One Trade Ticket, appears under the Trade tab.
There’s also thinkorswim, a browser-based platform under the Trade tab. It includes robust tools for charting and order entry.
Mobile Apps
Schwab has two apps: its main app and thinkorswim. Both include advanced orders, charting, and live CNBC. Only thinkorswim trades futures and forex, while only the main app handles mutual funds. thinkorswim’s charting has drawing tools and hundreds of technical indicators.
Desktop Trading
Finally, thinkorswim also has a desktop version. It’s Schwab’s most powerful trading platform, suitable even for professional traders, with features like:
- Full-screen charting
- Direct routing
- Heat maps
- Advanced multi-leg orders
- Option and equity screeners
- Futures and forex dealing boxes
- News in text and video form
- Economic calendar
- Alerts
- Watchlists
- Level II quotes
- And more
Miscellaneous Services
Fully-Paid Securities Lending Program: Schwab clients can earn extra money by lending out their stocks.
Individual Retirement Accounts: Schwab has several IRAs without routine fees, including Roth, Traditional, SEP, SIMPLE, and Custodial.
Initial Public Offerings: Schwab lets customers buy stocks at IPO. Look under the Trade tab for the IPO section.
Extended-hours Trading: Schwab offers pre-market and after-hours sessions, plus overnight trading on certain stocks and ETFs. Forex trades 24/5, and futures trade 24/6. International stocks add even more possibilities.
Fractional Shares: Schwab lets you buy partial shares of the 500 companies in the S&P 500, as well as those in Investing Themes™.
Dividend Reinvestment Plan: Schwab has a free DRIP that reinvests cash payouts into new shares.
Recommendations
Retirement Saving & Long-Term Investing: Schwab is a top choice for retirement investing.
Frequent Stock Trading: With wide access to global exchanges and strong platforms, Schwab is great for active traders.
Small Accounts: Schwab has no maintenance fees and no minimum for brokerage accounts, so smaller balances are fine. However, managed accounts do require higher balances, so they’re not ideal for small portfolios.
Beginners: Schwab’s managed services (especially with a live advisor) help new investors get started. The thinkorswim simulator is also handy for practice.
Mutual Funds: Schwab offers extensive mutual-fund research and trading tools.
Awards
Charles Schwab Review Verdict
With top ratings in each category, Charles Schwab is hard to beat.
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Updated on 3/6/2025.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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