Charles Schwab vs Firstrade


Firstrade versus Charles Schwab - which is better in 2021? Compare IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.



Outline


Schwab is one of the largest brokerage firms in the United States. With lots of advertising, it is able to bring in lots of clients. But does that mean it’s better than smaller firms like Firstrade? Let’s find out.


Cost Comparison


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Firstrade $0 $0 $0 per contract $0 $0
Charles Schwab $0 $49.95 $0.65 per contract $0 $0

When it comes to pricing, Firstrade is impossible to beat! The broker has no commissions on all products.


Services Comparison


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


Promotions


Firstrade: Get 2 FREE stocks and $0 commission in ALL trades!

Charles Schwab: Get commission-free online stock trades.



Banking Tools


Schwab clients can open a separate and independent deposit account with affiliated company Schwab Bank. Offering both checking and savings accounts, the financial institution is FDIC insured and offers low interest rates (despite having High Yield in its accounts’ names).

Schwab’s checking account offers checks and a Visa debit card. Both are free. The greatest highlight on the account perhaps is unlimited reimbursements of ATM fees worldwide.

At Firstrade, investors (who have $25,000 in assets) can add checks and a Visa debit card to an existing brokerage account. This doesn’t create an independent deposit account, so it’s a little different than Schwab’s setup.

Firstrade customers have to pay for check reorders, a service that Schwab offers for free. And Firstrade also doesn’t reimburse ATM fees.

Winner: Schwab


Financial Instruments


Cash management is just the tip of the iceberg for both brokerage firms in this contest. Firstrade clients can buy and sell the following securities:

  • Equities (regular stocks and penny and OTC stocks, too)
  • Exchange-traded and closed-end funds
  • Mutual funds
  • Fixed-income assets
  • Options
  • IPOs

Schwab offers the same selection that Firstrade provides plus the following investments:

  • Global stocks in seven currencies and 30 foreign exchanges
  • Futures contracts, including bitcoin

Winner: Schwab


Firstrade vs Schwab


Education and Research


Before making any actual trades, some investors may need to brush up on their knowledge of financial vehicles or research them. Both brokerage firms offer tools just for this purpose.

Firstrade has a learning hub (found at the top of its site under the Education tab) that provides short articles on a variety of topics, such as:

  • The History of ETFs
  • Types of Bonds
  • Glossary

Firstrade also has screeners for all the investment vehicles it offers. During our appraisal, we found them easy to use. Available search criteria include:

  • Stock sector
  • Dividend Growth 1-Year
  • Star Rating
  • Average Vol 1-Month
  • Manager Tenure
  • Avg.Credit Quality

Data on security profiles are pulled straight from Morningstar, which means there are free Morningstar stock reports. These include price targets for some equities.

At Schwab, we found another web-based educational hub. Entitled Learning Center, this one can be found under the Research tab on Schwab’s site. The section provides both articles and videos on a wide variety of issues. For example:

- Hedging in the Midst of a Bear Market
- Trading with StreetSmart Edge
- Classic Chart Patterns in Recognia

Schwab offers screeners for the securities it offers. Searchable variables include:

- Dividend Frequency
- Morningstar Fair Value Estimate
- Minimum Investment

Stock profiles include free reports from no less than 7 analysts.

Winner: Schwab


Desktop Platforms


Schwab has a desktop trading system called StreetSmart Edge. It is free to use and has no account requirements, a change from an older policy. The broker-dealer has many videos that demonstrate how to use the software; and the platform also a simulated trading mode, so that you can practice all you want.


Charles Schwab vs Firstrade


StreetSmart Edge can’t trade mutual funds, bonds, or futures. But for stocks, ETFs, and options, it offers:

  • Advanced charting with many tools
  • Live streaming of CNBC
  • Time & sales data
  • Level II quotes
  • Bracket orders

Firstrade has no desktop platform of any kind.

Winner: Schwab


Charles Schwab or Firstrade


Other PC Software


Schwab traders who don’t care for the broker’s desktop system can instead use StreetSmart Central. This is a browser platform that itself is quite potent. During our testing of the program, we found it easy to navigate. We especially liked its full-screen charting that offers tick-by-tick pricing and an integrated order ticket. An All-In-One Trade Ticket offers trading in multiple asset classes, as the name suggests. For example, it’s possible to enter a ticker symbol and then trade either the stock or options. Spreads are integrated. The trade ticket can also submit orders for futures contracts.

Besides this platform, Schwab customers also get a very well-designed website, which itself performs pretty well for trading purposes. A trade bar and full-screen charting are highlights.

Firstrade doesn’t have a browser platform. But it does provide a user-friendly website with a trade bar that’s much better than Schwab’s. For example, Firstrade’s can actually submit orders. Schwab’s trade bar simply provides a link to a page with an order form. Moreover, Firstrade’s trade bar is able to perform simple research and even submit orders for option contracts.

Firstrade’s website can submit orders for bonds and mutual funds with basic trade tickets. The website’s charting program is modeled after Morningstar’s website.

Winner: Schwab


Mobile Apps


Neither broker has stopped at desktops and laptops. Schwab has a mobile app with the following features:


Schwab or Firstrade


- Horizontal charting with tools (they caused the app to crash on the day we did our investigation)
- Order ticket with several trade types
- Mobile check deposit
- Live streaming of CNBC plus a video library

A recent addition to Schwab’s app is an artificial intelligence. During our testing of it, the AI was able to answer all of our questions, an impressive feat. Schwab’s app requires a PIN to be entered in order to log in, a slight nuisance.

Firstrade’s app doesn’t require a PIN at login because it has Touch ID. But it doesn’t have mobile check deposit, video news, or an AI. Advanced orders are available, and so is horizontal charting with tools.


Firstrade or Schwab


Winner: Draw


Miscellaneous Services


Dividend reinvestment program: It’s possible to convert cash dividends into fractional shares at either broker.

Portfolio management: Schwab customers can sign up for the broker’s account management services, which are available in both robo and human formats. The cheapest package is free. Adding services and investment vehicles will increase the price. Firstrade does not offer any account management or financial advice.

IRAs: Both firms have no-fee IRAs.

Automatic mutual fund investing: You can sign up for recurring investments into mutual funds at either firm. And there’s no charge at all.

Fractional-share trading: Schwab customers can trade whole dollars of 500 stocks (those that are part of the S&P index). At this time, Firstrade does not have a fractional-share service.

Winner: Schwab


Our Recommendations


Stock and ETF trading: On top of its very good software platforms, Schwab also has much better ETF resources than Firstrade.

Beginners: Only Schwab has 24/7 customer service and branch locations. We also like its educational materials better. Easy pick.

Mutual fund traders: At Schwab, we found 5,886 mutual funds that were open to new investors. Of these, 3,385 have neither load nor transaction fee. Firstrade offers a very impressive 15,631 funds, all of which carry no transaction fee. More than 9,000 also have no load. Firstrade definitely gets our recommendation.

Small accounts: Firstrade.

Long-term investors and retirement savers: We really like Schwab’s financial planning and wealth management services. It also has a 401k that Firstrade lacks.


Promotions


Firstrade: Get 2 FREE stocks and $0 commission in ALL trades!

Charles Schwab: Get commission-free online stock trades.



Firstrade vs Charles Schwab - Results


Although Firstrade has the most appealing commission schedule, it does not offer all the bells and whistles. Mutual fund investors and small accounts holders, however, will do well there.