Overview of Charles Schwab and Cash App
For most of the past century, if you wanted to trade in the stock market, you had to either be on
Wall Street or be directly connected to someone who was on Wall Street, but mobile technology has
changed all that. In this article, we'll be comparing two popular investment platforms, CashApp and
Charles Schwab. We'll be looking at their investment products, pricing, platforms, and any other
special features they may have.
Costs
Services
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Trading Tools |
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Research |
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Charles Schwab
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Cash App
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Promotions
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
Cash App:
Use U2Q3HN referral link to get $10 cash bonus.
Available Assets and Accounts
The major difference between CashApp and Charles Schwab is that CashApp is a mobile payment service
app, while Charles Schwab is a full service brokerage financial institution.
Over time, CashApp has had a few overhauls, including name changes, slowly introducing features that
allow users to trade stocks and bitcoin. While it has a lot of limitations on what it gives customers
access to, CashApp is designed so customers interact with its features through a straight forward,
user-friendly interface. This gives CashApp a wider customer base than brokerage companies, which
have more complicated interfaces. CashApps investment options are limited when compared to Schwab,
with access to only around 1,000 stocks available for trading. Bitcoin is the only crypto currency offered.
In comparison, Charles Schwab is a full-service investment brokerage firm and operates hand-in-hand
with the Charles Schwab bank/financial institution, and so collectively, it offers financial products
across the entire spectrum. This includes stocks, bonds, mutual funds, ETFs, options, and futures.
They have over 4,000 no-transaction-fee mutual funds and over 3,000 commission-free ETFs.
Additionally, they offer access to international markets and provide professional portfolio management
services.
To gain access to CashApp’s features, it only requires that you create an account on the app itself.
Schwab customers can access trading through a range of account types including self-directed IRAs,
retirement accounts, solo 401Ks, etc.
CashApp is primarily a self-service entity; Schwab offers a full line of financial advising and
financial planning services. Schwab also gives customers access to an expansive collection of educational resources.
Both companies allow unlimited internal transfers of funds, links to external accounts for transfer
in/out of funds; both provide their customers with debit cards that can be used to withdraw cash or to
make purchases, and both support ACH direct deposits.
The Schwab mobile app supports check depositing whereas the CashApp mobile app supports “cash deposits” through participating retailers such as Wal-Mart and the Dollar Store where customers can add cash to their accounts at any cash register.
Cost
CashApp has a very simple pricing plan. It does not charge any commissions for stock trades, but does
charge a 3% fee for buying and selling Bitcoin.
CashApp makes most of its $1.8 billion in gross profits from charging customers 1.5% to instantly
transfer money from the app to their financial institution.
Customers without external direct deposit accounts can withdraw money at the ATM with their debit card
for a $2-3 ATM fee. There is also a $1 fee to deposit cash at a participating retailer.
One downside is that even though they do not charge any commission fees for stocks, the price you pay for a stock on CashApp is going to be slightly higher than the market price. One plus side is that it allows customers to buy stock fragments (trades are based on a dollar amount and not the number of stocks traded).
Schwab no longer charges commissions for online stock trades, but options do carry a $0.65 fee per
contract.
Schwab doesn’t charge any ATM fees, in or out of network, and will refund its customers any
fees that the ATM company may charge when their customers transfer money out of their accounts.
Platforms
CashApp doesn’t offer a web or PC platform for trading stocks. To trade stocks using CashApp, the app
has a straightforward, user friendly, very simplistic template to follow. Inside the app, stocks and
bitcoin can be found by clicking on the “home” screen and scroll down and select the icon of the
product you’re looking to trade.
You can use the search feature to find a specific stock and then click “buy” or “sell”. CashApp offers a few basic charting tools and news updates to help users be more informed investors.
With the acquisition of TD Ameritrade, Schwab offers multiple platforms, including two platforms for
the PC, two web-based platforms, and the mobile app, ThinkOrSwim. These platforms are much more
complicated with access to higher risk/higher profitable trades and have advanced charting tools,
research, and analysis.
ThinkorSwim allows you to trade stocks, as well as other types of investments such as mutual funds, ETFs, options, and index funds. You can also place all types of orders including market orders, stop loss orders, limit orders, and trailing stop. The greatest selling point for downloading the ThinkorSwim app is that you can create a paper account and practice trading with fake money.
Schwab offers a range of educational resources and tools, including links to videos and online presentations.
Extra Features
In 2020, CashApp announced it was acquiring Credit Karma Tax, a free do-it-yourself tax-filing service, and has made it part of its application unit, making tax-filing services one feature unique to CashApp and not offered to Schwab customers. CashApp also offers a cash-back rewards program for users to earn rewards when they spend money using their CashApp card.
Schwab’s extra features include all the tools you would expect to use to be a successful trader, such as charting, back testing, trading scripts, automated trading, alerts, and customizable watch lists. Most importantly, Schwab offers access to professional portfolio management services.
Promotions
Charles Schwab: $0 commissions + satisfaction guarantee at Charles Schwab.
Cash App:
Use U2Q3HN referral link to get $10 cash bonus.
Charles Schwab vs Cash App Recommendations
In closing, CashApp is an excellent option for beginner investors who want to buy and sell stocks, ETFs,
and Bitcoin with minimal fuss. However, for investors who want access to a broader range of investment
products and more advanced research and analysis tools, Charles Schwab is the better option.
Our recommendation for anyone wanting to become a better trader would be to open a brokerage account with Schwab and begin using the “paper trading” feature in ThinkorSwim to practice making trades and to learn more complex trading products.
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