Overview of Charles Schwab and Cash App
For most of the past century, anyone who wanted to trade in the stock market had to either be on
Wall Street or have a direct connection to someone who was. Mobile technology has changed that. In this article, we'll compare two popular investment platforms, Cash App and
Charles Schwab. We'll review their investment products, pricing, platforms, and other
special features.
Costs
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0.65 per contract
|
$0
|
$0
|
|
Cash App
|
|
$0
|
na
|
na
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
Charles Schwab
|
|
|
|
|
|
|
|
Cash App
|
|
|
|
|
|
|
Available Assets and Accounts
The major difference between Cash App and Charles Schwab is that Cash App is a mobile payment service
app, while Charles Schwab is a full-service brokerage and financial institution.
Over time, Cash App has gone through several changes, gradually adding features that
allow users to trade stocks, ETFs, and Bitcoin. While it has many limits on what it gives customers
access to, Cash App is designed so customers can use its features through a straightforward,
user-friendly interface. This gives Cash App a wider customer base than many brokerage companies, which
often have more complicated platforms. Cash App’s investment options are limited when compared to Schwab,
although it does offer access to more than 1,800 stocks and ETFs for trading. Bitcoin is the only cryptocurrency offered.
By comparison, Charles Schwab is a full-service brokerage firm and works closely
with Charles Schwab Bank, so together they offer financial products
across a broad spectrum. This includes stocks, bonds, mutual funds, ETFs, options, and futures.
Schwab also offers thousands of mutual funds and ETFs, access to international markets, and professional portfolio management
services.
To access Cash App’s features, you simply need to create an account in the app itself.
Schwab customers can trade through a range of account types, including taxable brokerage accounts, IRAs,
and certain retirement accounts, such as Solo 401(k) plans.
Cash App is mainly a self-service platform; Schwab offers a full line of financial advice and
financial planning services. Schwab also gives customers access to a large collection of educational resources.
Both companies allow internal fund transfers and links to external accounts for transfers
in and out. Both also support ACH direct deposits. Cash App offers a debit card, while Schwab offers a debit card through its linked bank checking account.
The Schwab mobile app supports mobile check deposit, while the Cash App mobile app supports paper money deposits through participating retailers, where customers can add cash to their accounts.
Cost
Cash App has a simple pricing structure. It does not charge commissions for stock and ETF trades, but Bitcoin transactions can include spread and fee components that vary by transaction size and market conditions.
Cash App also earns money from features such as instant transfers, which generally carry a fee.
Customers can withdraw money at ATMs with their Cash App Card, although Cash App charges a $2.50 ATM fee unless the customer qualifies for waived ATM fees, and ATM operators may charge additional fees. There is also generally a $1 fee to deposit cash at a participating retailer, although that fee may be waived for some customers.
One downside is that even though Cash App does not charge commissions for stocks and ETFs, market orders can execute at a price that differs from the displayed quote, especially in moving markets. One advantage is that it allows customers to buy fractional shares, because trades can be based on a dollar amount instead of the number of shares traded.
Schwab no longer charges commissions for online stock and ETF trades, but options carry a $0.65 fee per
contract.
Schwab Bank does not charge ATM fees on its debit card withdrawals and reimburses eligible ATM surcharge fees worldwide for cash withdrawals.
Platforms
Cash App doesn’t offer a web or desktop platform for trading stocks. To trade stocks using Cash App, the app
provides a straightforward, user-friendly, and very simple interface. Inside the app, stocks, ETFs, and
Bitcoin can be found in the investing sections of the app.
You can use the search feature to find a specific stock or ETF and then click “buy” or “sell.” Cash App offers a few basic charting tools and news updates to help users become more informed investors.
Schwab offers multiple trading experiences, including its main website, the thinkorswim desktop platform, thinkorswim web, and the thinkorswim mobile app. These platforms are much more advanced and provide access to a wider range of products, along with stronger charting, research, and analysis tools.
thinkorswim allows you to trade stocks, ETFs, options, futures, and more, depending on account permissions. You can also place many order types, including market orders, stop orders, limit orders, and trailing stops. One of the greatest selling points of thinkorswim is that it includes paperMoney, which lets clients practice trading with virtual money.
Schwab offers a range of educational resources and tools, including links to videos and online presentations.
Extra Features
Cash App offers Cash App Taxes, a free do-it-yourself tax-filing service that was formerly known as Credit Karma Tax, making tax filing one feature available through Cash App and not through Schwab. Cash App also offers a cash-back rewards program for users who spend money with their Cash App Card.
Schwab’s extra features include many of the tools active traders expect, such as charting, alerts, customizable watch lists, paper trading, and advanced analysis tools. Most importantly, Schwab offers access to professional portfolio management services.
Promotions
Charles Schwab:
$0 commissions + ACAT fee rebates + a satisfaction guarantee with Charles Schwab.
Cash App: Currently, no promotions.
Charles Schwab vs Cash App Recommendations
In closing, Cash App is a strong 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 who wants to become a better trader would be to open a brokerage account with Schwab and begin using the paperMoney feature in thinkorswim to practice making trades and learn more advanced trading tools and products.
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