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Charles Schwab Automatic Investing Plan


2021: Does Charles Schwab have automatic investment plan (AIP)? Charles Schwab dollar cost averaging program setup and review: monthly/weekly AIP/DCA fees on ETFs, stocks, and mutual funds.



Does Charles Schwab Offer an Automatic Investment Plan?


Charles Schwab is known for offering a range of brokerage services for its clients. One feature that traders can take advantage of is Charles Schwab's automatic investing (AIP) for mutual funds. Because the service is computerized, no regular input is required on the part of the investor. The minimum periodic investment amount is $100, and the service is completely free.


Charles Schwab Dollar Cost Averaging


The Charles Schwab's automated investment plan is a type of dollar-cost averaging. A pre-determined amount of money is used to purchase shares at regular intervals. Because a fixed-dollar amount is being used, and not a fixed number of shares as is traditionally done with securities, more shares are purchased when the price is low.


Brokers With Automatic Investing




How to Set Up Automatic Investment Plan at Charles Schwab


In order to sign up for the automatic periodic investments, Schwab requires that the mutual fund must already be in your account, or a buy order must be open. The broker offers a convenient on-line form to sign up for the service. Some brokers, such as WellsTrade, do not offer on-line sign up for automatic investments. Instead, customers must call in and register. Schwab clients can also register by calling the broker.


Charles Schwab Automatic Investing Plan


Schwab allows automatic investments to be made semi-monthly, monthly, or quarterly. Available dates are the 5th and 20th. Only shares of mutual funds can be purchased. More specifically, the funds must be OneSource funds, the broker's selection of no-load, no-transaction-fee products. A few funds outside this list, which also have no load and no transaction fee, are also eligible. All of Schwab-branded mutual funds can be purchased through an automatic investment plan.

As an example, suppose you decided to set up Schwab Core Equity Fund (SWANX) for automatic investments. The best way to do this is to login to your Schwab account, and then click on 'Trade' on the fund's profile page. On the order form, there will be a link that says 'Automatic Investing'. Here you can choose how frequently you want the purchases to be made, and the amount of the periodic investment. Keep in mind that if the mutual fund has a higher subsequent purchase amount than $100, then you will have to set a periodic investment amount higher than $100.

In order for the purchases to go through, your account must have enough cash. Be sure to set up direct deposit or use the broker's MoneyLink to establish periodic transfers. Alternatively, selling shares of a security a few days before the automatic purchase is to be made should also work.


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How To Sell Stocks on Charles Schwab


After you have owned your stock for a while, go through the research process again and decide if it's time to sell some shares. Eventually, many stocks become overbought and it's then time to sell at least a portion of the holding.


Charles Schwab Automatic Investing


Go to the Accounts tab and click on Positions. Click on the menu icon with three horizontal bars. In the drop-down field, click sell. Doing so will take you to the same order page you used to enter the position. This time, you want to sell instead of buy. You can sell all shares or only a portion of the holding. If you choose a limit order to sell, keep in mind that you want to set the lowest price you're willing to accept rather than the highest price you're willing to pay, as you did on the buy side.

When you have completed all fields, go ahead and submit the order. Standard Charles Schwab commission rate applies to the trade. Well, that's it. Buying and selling stocks at Schwab really is that easy.


Buying Stocks on Charles Schwab


Charles Schwab is one of the best known companies in the online investment firms list. Once you decided to buy shares of let's say Facebook with Charles Schwab, click on the Trade button. The browser will now take you to the order placement page. The order form will provide helpful trading information, such as the day's high and low prices, and the bid-ask spread.


Charles Schwab Dollar Cost Averaging


Verify that the correct ticker symbol appears in the Symbol field. In this case, it is FB. Next, select Buy in the Action field. Enter the number of shares you wish to buy. Be aware that Schwab's $0 commission is valid for any number of shares, so placing one trade for all shares instead of multiple trades each for a smaller number of shares is more economical. There's a handy calculator near the field that will convert a dollar amount to number of shares.





For the Order Type, select market or limit. Market orders guarantee quick execution with no guarantee of price, whereas limit orders promise a price without guaranteeing fulfillment of the order. Limit orders are safer. Also select the Timing you desire. The most common is a Day order, which expires at the end of the trading session if it isn't filled. Schwab has a DRIP program, so select "Reinvest Dividends" if you want additional shares of stock rather than cash paid.

When all fields have been completed, click on Review Order. If all information looks correct, click on Place Order. Congratulations, you have just purchased your first stock. It really is as simple as that.

As with selling, Charles Schwab commission schedule rate of $0 applies to buy orders. Typically, orders are completed within one second unless the limit specified is away from the market price. Click on Order Status to see if the trade has been completed. If it has, the position will show up in your account immediately.