Etrade vs Charles Schwab

Charles Schwab vs Etrade


2020 Compare Etrade versus Charles Schwab - which is better? IRA/Roth accounts, online investing fees, stock broker mutual fund and other assets comparison.



Comparison Introduction


If you like $0 commissions, you’re going to love Schwab and E*Trade. But which one should you choose? Keep reading—we’re going to give you some guidance.


Cost


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Etrade $0 $19.95 $0.65 per contract $0 $0
Charles Schwab $0 $49.95 $0.65 per contract $0 $0
Ally Invest $0 $9.95 $0.50 per contract $0 $0


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Etrade
Charles Schwab
Ally Invest


1st Category: What Can Be Traded


Schwab traders can buy and sell bonds, stocks, mutual funds, ETFs, closed-end funds, option contracts, futures, IPOs, over-the-counter securities, and penny stocks. The broker-dealer also provides access to some foreign equity exchanges. Outside of securities, Schwab also runs multiple lines of business in insurance, annuities, and mortgages.

E*Trade offers a similar lineup of investments: equities, fixed-income securities, mutual funds, ETFs, closed-end funds, options, IPOs, futures, OTC securities, and penny stocks. It does not offer insurance, annuities, or mortgages.

Schwab wins the first category.


2nd Category: Websites


Schwab has done a good job of overhauling its website. It now is easy to navigate thanks to a well-thought-out top menu. One feature on the site we found useful is a trade bar. It delivers real-time info, such as volume and bid-ask spread. A small chart can be displayed on the top of the bar. The biggest weakness of the tool is that orders can’t be submitted on it.


Charles Schwab or Etrade


There’s an order form on the website, but during our testing we found StreetSmart Central to be of greater use. This is a browser platform that has an all-in-one trade ticket that is able to submit orders for stocks, options, futures, and options on futures. The platform also boasts very good charting (with tick-by-tick price action), plus some useful option and futures tools.

Moving on to E*Trade, we find a good website, although it’s not quite on the same level as Schwab’s site. There’s not as much information, and the trade bar is completely missing.


Etrade or Schwab


The website’s order ticket provides trialing, stop, and limit orders. There is a calculator that converts a dollar amount to a whole number of shares. And we liked the incorporation of extended-hours trading choices.

Traders who demand more will find more on Power E*Trade, the company’s flagship browser platform. It has a very advanced order ticket that delivers even more complex trade types, such as OCO stop limit and 3-leg bracket stop order. We especially liked the 16 pre-defined option strategies that are incorporated into the ticket. We found it very easy to create our own option plays as well. One major advantage that Power has over Central is a simulated trading mode.

We think a practice trading mode gives E*Trade a slight edge in the second category.


3rd Category: Mobile Platforms


Both brokerage firms in this head-to-head matchup offer two mobile apps: one regular app and another modeled on the broker’s browser platform. Schwab’s regular app delivers mobile check deposit and bill pay. The software can trade options and mutual funds on top of the usual stocks and ETFs.

Futures in theory can be traded on the StreetSmart Central mobile app, although we weren’t able to find any contracts on it. The software is borrowed from the old optionsXpress technology; and it seemed very underdeveloped to us.


Schwab or Etrade


E*Trade’s mobile Power app delivers a much better trading experience. We were able to watch Bloomberg television in HD. We counted 16 pre-defined option strategies and had no problem creating our own multi-leg trades. Futures and options on futures can also be traded. The app’s trade ticket delivers not just extended hours but on-the-open and on-the-close choices.


Etrade or Schwab


E*Trade’s regular app offers mobile check deposit, bill pay, Level II data, and the ability to trade mutual funds.

The winner here is E*Trade.


4th Category: Desktop Software


Schwab customers who need more than StreetSmart Central can use StreetSmart Edge, the company’s desktop system. Features on the latter that aren’t on the former include Level II data and direct-access routing, must haves for serious traders. The desktop program also offers a simulated trading login. Charting is very good with many tools. We were able to watch CNBC and place multi-leg option trades.


Charles Schwab vs Etrade


StreetSmart Edge is free for all clients. E*Trade’s desktop program, E*Trade Pro, requires a $1,000 account balance, which shouldn’t be too difficult for most traders. Pro comes with a Bloomberg TV feed, time & sales data, futures and options trading capability, Level II quotes, direct-access routing, information on market movers, and more. Charting is very advanced with lots of (customizable) technical studies, several graph styles, multiple drawing tools, and comparisons.


Etrade versus Schwab


Because Pro has the ability to trade futures, and Edge does not, we give the victory here to E*Trade.


5th Category: Research & Education


Research and learning materials are available on multiple platforms at both brokers in this survey. On StreetSmart Edge, we found a Recognia app for in-depth technical analysis. The software also has a news feed for quick investigation of a stock. Schwab’s website has much more. Stock reports are available free of charge from many different analysts, and the broker’s learning materials cover a wide territory of topics.

E*Trade’s website also hosts many good learning resources. We found materials on tax planning, withdrawing funds from a retirement account, understanding risk tolerance, and how to place an equity trade. Power E*Trade presents Morningstar ratings and stock and market news. The firm’s website has in-depth security profiles with multiple reports on individual stocks.

Too close to call here.


6th Category: Other Services


If you want to reinvest cash dividends automatically as additional shares of stocks and ETFs, both brokerage firms offer a service that does it for free. And it’s easy to sign up electronically.

If you’re self-employed, you can open a solo 401(k) at Schwab or E*Trade. Both brokerage houses also offer large selections of IRAs, although we don’t care for some $25 fees that E*Trade charges.

If you want to setup recurring investments in mutual fund holdings, both brokers have you covered there as well.

Schwab wins the final category by a small margin.


Our Recommendations


Mutual Fund Traders: E*Trade offers a longer list, so we have to recommend it over Schwab for mutual fund trading.

Beginners: Both broker-dealers in this competition are about even for new traders.

Retirement Savers: Because of E*Trade’s $25 IRA fees, we point to Schwab.

Trading Tools: We can defend either broker here.

ETF and Stock Trading: Toss up.

Cash Management: Although both brokerage firms operate FDIC-insured banks, Schwab’s lineup of bank products delivers more benefits.


Charles Schwab vs Etrade - Results


All in all, both brokerage firms in this survey are pretty even. And with very similar commission schedules, both companies offer a comparable value. If you know how you plan to use your investment account, you should now know which firm to choose. Anyone looking for $0 commission trades not just on stocks but also on mutual funds and options should also take a look at Ally Invest.