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 go over their investment choices, fees, trading tools, and other
notable features.
Costs
Services
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Trading Tools |
Customer Service |
Research |
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Charles Schwab
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Cash App
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Available Assets and Accounts
The main 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.
Cash App has changed quite a bit over the years, slowly adding features that
let users trade stocks, ETFs, and Bitcoin. Although the app limits the types of investments customers can
access, Cash App is built around a simple, easy-to-use design. This gives Cash App a wider customer base than many brokerage companies, which
often have more complex platforms. Cash App’s investment lineup is much smaller than Schwab’s,
although it does provide access to more than 1,800 stocks and ETFs for trading. Bitcoin is the only cryptocurrency offered.
Charles Schwab, on the other hand, is a full-service brokerage firm and works closely
with Charles Schwab Bank, allowing the two companies to provide financial products
across many categories. This includes stocks, bonds, mutual funds, ETFs, options, and futures.
Schwab also provides thousands of mutual funds and ETFs, access to international markets, and professional portfolio management
services.
To use Cash App’s features, you only need to open an account inside the app.
Schwab clients can trade through several account types, including taxable brokerage accounts, IRAs,
and certain retirement accounts, such as Solo 401(k) plans.
Cash App is mostly a self-directed platform; Schwab provides a broader selection of financial advice and
financial planning services. Schwab also gives customers access to a large library of educational materials.
Both companies allow customers to move money internally and connect outside accounts for deposits
and withdrawals. 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 uses a simple pricing model. 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 makes money from services such as instant transfers, which generally come with a fee.
Customers can take out 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 their own separate 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 drawback is that even though Cash App does not charge stock or ETF commissions, market orders can fill at a price that is different from the quote shown, especially when prices are moving quickly. One benefit is that Cash App supports fractional shares, because trades can be placed by dollar amount instead of by the number of shares.
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 does not provide a web or desktop platform for trading stocks. For stock trading in Cash App, the app
uses a clean, beginner-friendly, and very simple interface. Inside the app, stocks, ETFs, and
Bitcoin are located in the investing areas of the app.
You can use the search tool to find a particular stock or ETF and then choose “buy” or “sell.” Cash App provides a few basic charting tools and news updates to help users make more informed investing decisions.
Schwab provides several trading experiences, including its main website, the thinkorswim desktop platform, thinkorswim web, and the thinkorswim mobile app. These platforms are far more advanced and include access to more investment products, along with stronger charting, research, and analysis features.
thinkorswim lets customers trade stocks, ETFs, options, futures, and more, depending on account approval. It also supports many order types, including market orders, stop orders, limit orders, and trailing stops. One of thinkorswim’s biggest advantages is paperMoney, which lets clients practice trading with virtual money.
Schwab provides many educational resources and tools, including links to videos and online presentations.
Extra Features
Cash App provides Cash App Taxes, a free do-it-yourself tax-filing service that used to be called Credit Karma Tax, making tax filing one feature available through Cash App and not through Schwab. Cash App also has a cash-back rewards program for customers who spend with their Cash App Card.
Schwab’s extra features include many of the tools active traders look for, such as charting, alerts, customizable watch lists, paper trading, and advanced analysis tools. Most importantly, Schwab gives customers access to professional portfolio management services.
Promotions
Charles Schwab: $0 commissions + ACAT rebate + satisfaction guarantee at Charles Schwab.
Cash App: Currently, no promotions.
Charles Schwab vs Cash App Recommendations
Overall, Cash App is a good choice for new investors who want to buy and sell stocks, ETFs,
and Bitcoin with as little hassle as possible. However, investors who need a wider selection of investment
products and more powerful research and analysis tools will probably be better served by Charles Schwab.
Our recommendation for anyone who wants to improve as a trader is to open a brokerage account with Schwab and start using the paperMoney feature in thinkorswim to practice trades and learn more advanced trading tools and products.
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