Overview of Charles Schwab and Cash App
For much of the last century, if you wished to trade in the stock market, you generally needed to be on
Wall Street or be closely linked with a Wall Street insider, but smartphones have
changed everything. In this piece, we'll compare two well-known investment platforms, CashApp and
Charles Schwab. We'll review their offerings, costs, interfaces, and any extra
features they might provide.
Costs
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
Charles Schwab
|
|
|
|
|
|
|
|
Cash App
|
|
|
|
|
|
|
Available Assets and Accounts
The main difference between CashApp and Charles Schwab is that CashApp is a mobile payment service
app, while Charles Schwab is a full-service brokerage and financial institution.
Over time, CashApp has gone through several updates, including rebranding, gradually adding functions that
let people trade stocks and Bitcoin. While it has numerous limits on what it provides users
access to, CashApp is made so customers use its features through a straightforward,
user-friendly setup. This results in a broader user base than brokerage firms, which
have more complex interfaces. CashApp’s investment choices are restricted compared to Schwab,
offering only around 1,000 stocks for trading. Bitcoin is the only cryptocurrency available.
By contrast, Charles Schwab is a complete investment brokerage firm that works closely
with the Charles Schwab bank/financial institution, and together they offer financial solutions
across a broad range. This includes stocks, bonds, mutual funds, ETFs, options, and futures.
They provide more than 4,000 no-transaction-fee mutual funds and over 3,000 commission-free ETFs.
They also grant access to foreign markets and offer expert portfolio management
services.
To use CashApp's functions, you just need to set up an account within the app itself.
Schwab clients can trade via various account types like self-directed IRAs,
retirement plans, solo 401Ks, and more.
CashApp is mainly a do-it-yourself platform; Schwab provides a full suite of financial advice and
planning services. Schwab also grants customers access to a large library of educational resources.
Both services let you make unlimited internal money transfers, connect to external accounts for moving
money in or out; both issue debit cards that can be used to withdraw cash or
make purchases, and both accept ACH direct deposits.
The Schwab mobile app accepts check deposits, while the CashApp mobile app supports “cash deposits” at participating stores like Wal-Mart and Dollar Store, where customers can add money at any register.
Cost
CashApp’s pricing is very straightforward. It does not impose commissions on stock trades, but
does charge a 3% fee to buy or sell Bitcoin.
CashApp earns the majority of its $1.8 billion gross profit by charging users 1.5% for immediate
transfers from the app to their bank.
People who don’t have outside direct deposit accounts can pull cash from ATMs using their debit card
for a $2–3 ATM fee. There’s also a $1 charge to add cash at a supported retailer.
A drawback is that while there are no stock trade commissions, the stock price on CashApp is usually slightly above market price. On the upside, it lets users purchase fractional shares (trades are dollar-based rather than share-based).
Schwab does not charge commissions on online stock trades anymore, but options still have a $0.65 fee per
contract.
Schwab doesn’t apply any ATM fees, whether in-network or out-of-network, and refunds customers for any
fees the ATM operator might charge when customers withdraw from their accounts.
Platforms
CashApp does not provide a web or desktop platform for stock trading. To trade stocks via CashApp, the app
has a simple, user-friendly structure. In the app, stocks and
Bitcoin can be accessed by going to the “home” screen, then scrolling down and choosing the icon of the
product you want to trade.
You can search for a particular stock and then choose “buy” or “sell.” CashApp provides a few simple charting tools and news updates to assist investors.
After acquiring TD Ameritrade, Schwab provides multiple platforms, including two desktop versions
for PCs, two web-based solutions, plus the ThinkOrSwim mobile app. These are far more
complex, offering higher-risk/higher-reward trades and supplying advanced charting tools,
research, and analytics.
ThinkorSwim lets you trade stocks and other investments like mutual funds, ETFs, options, and index funds. You can also place various order types, including market, stop loss, limit, and trailing stops. A major advantage of the ThinkorSwim app is that you can set up a paper account and practice trades with virtual money.
Schwab provides a variety of learning materials and tools, including video links and online seminars.
Extra Features
In 2020, CashApp said it was buying Credit Karma Tax, a free DIY tax-filing service, and merged it into its platform, making tax-filing a unique feature not available with Schwab. CashApp also provides a cash-back rewards program for users who spend with their CashApp card.
Schwab’s extra features include all the tools expected for effective trading, such as charting, backtesting, trading scripts, automated trades, alerts, and adjustable watch lists. Crucially, Schwab also gives you 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 summary, CashApp is a great choice for novice investors who want to purchase and sell stocks, ETFs,
and Bitcoin with little hassle. However, for those seeking a wider selection of investment
products and more sophisticated research and analysis features, Charles Schwab is preferable.
We suggest that anyone aiming to improve their trading skills open a Schwab brokerage account and use the ThinkorSwim “paper trading” feature to practice trades and explore more complex products.
|