Charles Schwab rating

Charles Schwab

Interactive Brokers rating

Interactive Brokers

Charles Schwab vs Interactive Brokers



Interactive Brokers vs Charles Schwab: Costs


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Charles Schwab $4.95 $76 ($0 to sell) $4.95 + $0.65 per contract $0 $0
IB $1-$100 $14.95 $0.70 per contract $240** $30



Interactive Brokers vs Charles Schwab: Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Charles Schwab
IB



New Account Promotions



Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.

Interactive Brokers: Open account and get $200 for a friend you refer.




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 900 shares. Commissions are $4.95 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 stocks, extended hours and large order surcharges. Interactive Brokers charges $10 per month ($20 per month for accounts less than $2,000) inactivity fee for customers making less than $10 in commissions in that month.

Unlike Interactive Brokers, Charles Schwab doesn't have monthly fees. There are also no IRA setup and annual fees at the firm (Interactive Brokers charges $30 annual IRA fee). In spite of that, Schwab was not included in our list of Best IRA Brokers in 2018.

With Charles Schwab investors get decent banking services, wide selection of investment products and great customer service. But their website needs to list all their fees clearly.

Interactive Brokers provides its customers with great but complicated trading platform, access to many markets around the world and low margin rates. The company, however, is known for 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. The firm also lacks an online investor community, where users can ask questions and learn from more experienced investors. Anyone new to investing is better off with one of our Brokers for Beginners recommendations.

Overall, Charles Schwab is a good option for retirement and "buy-and-hold" investors, and the competitor is a great choice for day-traders. To everyone else we suggest researching companies in our Top Brokerage Firms article.







Charles Schwab Overview


If you thought Schwab had high commissions and was just like the other large brokerages, it is definitely time to take another look. Schwab is cutting no corners in its goal to become the best online brokerage firm for both long-term investors and traders. In the last four months alone, Schwab has lowered their commissions twice. The first reduction was from to $8.95 to $6.95 for stocks and ETFs per trade in February of this year. The second reduction took place the following month and reduced the commission for stocks and ETFs from $6.95 to $4.95 per trade. Schwab's rates are now lower than E-Trade's commissions ($6.95) and TD Ameritrade's commissions ($6.95). Fidelity recently lowered its commissions in order to match Schwab's. There is currently a race to the bottom in terms of costs as investors become more and more aware of what fees and commissions are doing to their returns.


The Best Index ETFs and Mutual Funds in the Business


Schwab isn't only reducing the cost of its account-holders via commissions. Schwab also offers the lowest expense ratio for a total market index ETF and mutual fund in the industry, tying only with iShares. Schwab has lowered expense ratios on all their index funds, which you can trade, commission- free, on their platform. No other competing broker has a lower cost way to invest your money in the broad market. If you are a long term-investor, this is a huge benefit as your money will compound even faster. Note that Schwab doesn't require you to have higher amounts of money to take advantage of the lower expense ratios their mutual funds offer. See below for a partial listing of Schwab's mutual fund offerings. To see the complete listing as well as their ETF comparison, please click here.


Schwab Intelligent Portfolios


Have you ever heard of Betterment or Wealthfront? If you have considering using these robo-advisors, consider Schwab as well. Schwab's Intelligent Portfolios© may not be as well-known among the masses but it is a superior service is on key way – it's free! Schwab Intelligent Portfolios© charge you no management fee or any annual fee. Betterment will charge you .25% of your assets each year. That's $2,500 a year if you have a portfolio of one million dollars! That is on top of what the funds charge via their expense ratios. With Schwab Intelligent Portfolios©, you'll only pay the expense ratios of the funds you are in which are the lowest in the industry. Not to mention, with Schwab Intelligent Portfolios© you can call anytime 24/7 for free support and advisory help. If you're like most people and don't want to spend a lot of time thinking about your investments, this can be a solid choice.


Common Fees


Schwab has adopted the fees of a "discount brokerage" without making the sacrifices associated with discount brokerages. Fees are low across the board, even when you aren't talking about their low $4.95 trading commission. Schwab has no inactivity fees and no maintenance fees for both regular and retirement accounts. Even their global trading accounts have no annual fees of any kind. Schwab offers over 200 commission-free ETFs from 16 providers.

Schwab is an industry leader in commission-free ETFs as you can see from the above chart. You can easily do all your investing at Schwab for the rest of your life and never pay a fee to Schwab. The only area that has what can be considered a high fee is the purchase of a mutual fund with a transaction fee. That will set you back $76. There are over 3,000 no-transaction-fee mutual funds however so finding a no-transaction fee mutual fund shouldn't be an issue. If you ever decide to transfer your account out of Schwab, it will cost you $50 for a full transfer and $25 for a partial transfer.


Customer Service


Personally, I have nothing but good experiences with the customer service at Schwab. All of my questions are answered in a timely manner and all the responses did not come back as canned responses that were pre-written in advance. Schwab offers 24/7 support via phone and e-mail. You can also stop by one of their physical locations if they have one close by, which is something you would never be able to do at a smaller brokerage. Anecdotes aside, Schwab is rated higher than many of its competitors on consumeraffairs.com. Schwab has a rating of 1.4 whereas TD Ameritrade has a rating of 1.3, Fidelity 1.2, and E-Trade coming in last with a rating of 1.1.


Research


Schwab's level of research and information provided is astounding. They leave nothing out and display the information in a very easy to digest manner. As you pull up a security you will instantly be greeted with a vast amount of data and rankings. Take AAPL for instance. As you input AAPL on their research page, you get Schwab's propriety rating based on fundamentals, valuation, and momentum. They also provide Morningstar's rating and latest analyst report, an evaluation of the company's economic moat, a comparison of what bulls are saying vs the bears, Credit Suisse's rating, Ned Davis Research's rating, the Argus 12 month rating, S&P Capital IQ's opinion, Reuters Research average rating, news, filings, and more. You will have all the information you could possibly need. Schwab also offers and easy to use investment screener to help you find the securities that fit your investment profile. ETFs also have a report card provided by Schwab which includes various ratings and detailed information about the fund. This report card will show the information you would expect, such as the fund strategy, performance, fundamentals, and holdings. It also includes so items that you wouldn't expect that are quite nice, such as a Market Edge opinion, a comparison within the category regarding returns, a volatility assessment of risk, and a tax analysis.


Trading Platforms


Schwab offers two trading platforms, both of which are available with no trade minimums or fees. Schwab offers a trading platform called StreetSmart.com which is designed for beginner traders and StreetSmart Edge which is cloud-based and supports advanced features and customization for traders who are more experienced. You can create multiple variations of charts for the same security and create custom layouts to increase your efficiency or merely keep things visually appealing.


Mobile App


Schwab also offers a mobile app available via Google Play and the Apple App Store. The app has a rating of 3.9 on Google Play and 4 on the Apple App Store. These are decently high scores compared to other brokerage apps such as E-Trade Mobile, which has a score of 2.5. While the app has fewer features than the website, it has some nifty features, such as the ability to stream CNBC so you can get your fix of finance news on the go. You can also get market information and data even without signing in. You can still place trades and perform key tasks using the mobile app but with reduced customization and functionality. If you plan on placing simple trades on the go, the app is perfect for you. Schwab also offers an iPad app called On Investing which allows you to connect with advisors, researchers, and other contributors to Schwab’s popular On Investing magazine. This app provides a great way for people to review investment advice and material while on the move.


Most User Firendly Broker Conclusion


Schwab is a solid brokerage choice you can't go wrong with. Commissions are low and very completive if you plan on trading. They often run promotions that allow you to trade for free for a limited time so take advantage of those if you plan on doing a lot of trading. They offer the most commission free ETFs out of any other brokerage so investing for the long-term has never been easier, even if you have a unique investment approach. Fees are low across the board and you'll never pay any inactivity or maintenance fees. You'll always have plenty of information and if you choose to invest simply then they will manage your portfolio for free with Schwab Intelligent Portfolios©. With a highly customizable platform at a low cost, Schwab is definitely one of the best brokerages out there.


Updated on 3/17/2018.