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Charles Schwab Hidden Fees


2021 Charles Schwab hidden fees, costs, inactivity fee, monthly service maintenance charges, costs at brokerage and IRA accounts. Charles Schwab minimum investment to open brokerage account.



Charles Schwab Minimum Deposit Amounts


Charles Schwab minimum investment to open brokerage account $0
Charles Schwab minimum amount to open brokerage margin account $2,000 in cash and/or securities
Charles Schwab minimum initial deposit to open ROTH IRA, Traditional IRA, Simple IRA, or SEP IRA $0
Charles Schwab minimum balance requirement for brokerage or IRA none


Charles Schwab Inactivity Fee


Charles Schwab does not have any inactivity fees (monthly, quarterly or annual) for individual or joint taxable brokerage accounts. The firm also does not impose inactivity fee on any IRA accounts.


Charles Schwab Maintenance Fee


There is no service maintenance fee at Charles Schwab accounts.


Charles Schwab Hidden Fees


Some brokers charge nothing extra for placing a trade with a live agent. 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 $49.95 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. In contrast, WeBull is willing to let customers open an account with $0 and gives free stocks for making $100+ deposit.

Schwab 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.


Charles Schwab Top Competitors


Broker Review Promotion
Offer
Stock/ETF
Commission
Mutual Fund
Commission
Maintenance
Fee
Annual IRA
Fee
WeBull Get 2 FREE stocks valued up to $1,850. $0 na $0 $0
Firstrade Get 2 FREE stocks and $0 commission in ALL trades! $0 $0 $0 $0
TD Ameritrade $0 commissions + transfer fee reimbursement. $0 $49.99 $0 $0


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.


Charles Schwab Monthly Fee


Charles Schwab does not charge monthly fees on all of its brokerage accounts.


Charles Schwab Hidden Fees




Charles Schwab is a broker with a lot of strengths, which is probably why it literally has trillions of dollars in client assets. Nevertheless, there are a few weaknesses that traders should be aware of. For instance:

Some brokers have lower commissions. Webull is charging $0 for stock, option, and ETF trades as well as for crypto transactions.

Schwab requires $1,000 to open a brokerage account. Most brokerage firms today have eliminated account opening requirements. For example, a securities account at TD Ameritrade can be opened with no deposit. Firstrade and WellsTrade also require no money down. Schwab will waive its $1,000 requirement for customers who open a Schwab checking account with a brokerage account, but some investors may prefer not to have the bank account.

Schwab doesn’t offer forex trading. The broker’s affiliate, optionsXpress, has been integrated into the Schwab website; and so Schwab has futures trading. But neither firm offers currency trading. Other brokers do provide resources for currency investors. These firms include Ally Invest and TD Ameritrade.

Schwab’s robo-advisory service has questionable investment tactics. The broker’s software program, Intelligent Portfolios, keeps a large percentage of an account’s assets invested in cash. It does this because the broker can earn money by investing the cash in its own projects. The cash is actually an IOU the broker owes the client, much like a bank deposit that really isn’t in your account because it has been loaned out to other customers.

Intelligent Portfolios also trades ETF’s that Schwab makes money from, so the trades create a conflict of interest. Schwab also uses routing procedures for the trades that provide the broker with additional income. Other robo-advisory programs, such as $0 Advisory Fees M1 Finance, do not have the same investment tactics.

Schwab offers a small selection of mutual funds. The mutual fund screener on Schwab’s website returns 5,723 products that are open to new investors. This list is quite a bit smaller than the fund offerings of other brokers. WellsTrade clients, for instance, have access to 9,491 mutual funds. Fidelity and Ally Invest offer 12,000+ funds, almost twice the number that Schwab provides. And TD Ameritrade provides over 13,000 mutual funds!

Schwab’s mutual fund transaction purchase fee of $49.95 is also higher than what some other brokers charge: Firstrade is at $0, Ally Invest at $9.95, Etrade and Merrill Edge charge $19.95.


Disclaimer


Charles Schwab hidden fees are as of 2021 and are subject to change. For the most recent information on Charles Schwab inactivity fee and monthly service maintenance charges visit their website.