Charles Schwab Hidden Fees
Some brokers charge nothing extra for placing a trade with a live agent. At Ally Invest, for example, there is no extra charge. At Schwab, however, there is an additional $25 fee on top of the broker's regular commission.
Schwab also charges an extra $5 for using its automated phone system to place a trade. Not all brokers do this either. Merrill Edge, for instance, charges nothing besides its regular commission for placing a trade over its automated phone service.
Voluntary reorganizations, such as when a business issues a tender offer for stock, are $39 at Schwab. Other firms charge less than this amount. Capital One Investing, for example, charges just $25.
If a mutual fund is purchased at Schwab that does not appear on the broker's NTF list, there is a very steep $76 transaction fee. This is much higher than what most
other brokers charge, including Ally Invest ($9.95)
and Merrill Edge ($20).
Transferring a full account from Schwab to another broker costs $50. Not all firms charge for this service. Fidelity clients, for example, pay nothing. Schwab also charges for partial transfers. The fee is $25.
Bonds at Schwab cost $1 each. There is also a $10 minimum transaction charge. Purchasing fewer than ten bonds will still result in a $10 transaction fee. Some
traders may be surprised to see this charge, because other brokerage houses don't assess commissions on bonds.
Schwab requires $1,000 to open a trading account. Not all brokers have a minimum. Schwab is willing to its requirement if you set up a monthly recurring deposit of
at least $100.
The broker charges $250 per year for holding a security that is not publicly traded. There is also a $100 commission for each transaction of these securities.
Placing a trade for a foreign stock on a foreign exchange or the U.S. OTC market incurs the broker's standard commission plus a $50 surcharge.
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Fees That Schwab Does Not Charge
A brokerage account with Schwab carries no annual fee. Several other firms do have a yearly fee. Vanguard and WellsTrade, for instance, do have these fees; although
there are ways to avoid them.
There is no fee to close a Schwab IRA. This policy is rather unusual in the brokerage world. Most firms do charge something to close an IRA. Firstrade charges $50,
while Merrill Edge clients pay $49.95.
Cash management features are free at Schwab. There are no charges for checks or debit card privileges. ATM fees are also reimbursed. These policies are more
generous than those at OptionsHouse, who charges an annual fee for its debit card. Vanguard does not reimburse all ATM fees, while Firstrade charges $20 to write
checks.
Many brokers charge an annual fee for a SIMPLE IRA. Fidelity is one example. Schwab, however, does not have any on-going fees for this retirement account.
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Comparison to TD Ameritrade, E*TRADE, & Fidelity
Stiff competition in the online brokerage industry means that there aren’t many noticeable differences between Schwab and its
competitors. TD Ameritrade, E*TRADE, & Fidelity charge similar fees and for the most part have similar offerings, though Schwab does
beat its competitors on number of ETFs offered and comes in second to TD Ameritrade on number of no load mutual funds offered.
Only TD Ameritrade beats Schwab on order execution, and TD Ameritrade’s
research is widely recognized as the best among its competitors. Schwab offers all major equities, options, and futures. However,
Schwab does not support Forex and Futures trading, so investors interested in foreign exchange arbitrage should look elsewhere.
Schwab offers quality financial products and services at a competitive price that some investors will find attractive. ETF and mutual fund
traders will do especially well here. There are few hidden fees at Charles Schwab - another big plus.
Overall, Schwab is an excellent choice for beginner investors, while its platform, tools, and research make it a compelling option for
advanced traders as well.
Disclaimer
Charles Schwab hidden fees are as of 2019 and are subject to change. For the most recent information on Charles Schwab
hidden charges visit their website.
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