Charles Schwab rating

Charles Schwab Review


Charles Schwab Pricing and Minimum Deposit


InvestmentsCommissions
Stocks and ETFs $0
Stocks and ETFs broker assisted $29.95
Stocks and ETFs phone trades $9.95
Options $0.65 per contract
Mutual funds $49.95 to buy, $0 to sell
Futures $1.50 per contract
CDs, Corporate Bonds, Municipal Bonds, Government Agencies, Zero-Coupon Treasuries, including STRIPS and Mortgage-Backed Securities $1 per bond, $10 minimum, $250 maximum
Preferred Stocks and REITs $0
Commercial Paper and Foreign Bonds, Unit Investment Trusts call for pricing

Investments stocks, bonds, mutual funds, futures, Treasury issues, options, CDs, insurance, ETFs, futures, annuities, non-U.S. securities and ADRs, WEBs and Canadian foreign orders
Charles Schwab minimum deposit to open account $0 for cash account, $2,000 for margin account
FeesCharles Schwab fees
Promotion linkCharles Schwab promotions


Charles Schwab Brokerage Review


Despite offering unbelievably low commissions on stock and ETF trades, Schwab has managed to keep the quality of its brokerage services competitive with many of the industry’s top players. Here’s the lowdown on this commanding broker:


Bulls Mention...


Excellent pricing. Although it’s not the lowest in the industry, Schwab’s commission schedule is affordable by virtually any standard.

Free software. Schwab charges nothing to use its many trading platforms.

Great banking features. Some services are better than most traditional banks in fact.

Foreign stocks are available. Schwab is one of the few broker-dealers that offers access to international exchanges.


Bears Mention...


Some investment vehicles can’t be traded.

Small list of mutual funds. Many of them have no load and no transaction fee, however.

Software doesn’t always match the professional level that other brokers can deliver.


Investment Vehicles


Charles Schwab Investment Rating

Schwab offers trading in stocks, exchange-traded funds, mutual funds, closed-end funds, options, futures, and fixed-income securities. The latter includes munis, zero-coupon Treasuries (including STRIPS), foreign bonds, certificates of deposit, mortgage-backed securities, preferred stocks, and UIT’s. Futures includes bitcoin futures traded on the Cboe (ticker symbol /XBT), but not contracts traded on the CME (symbol /BTC).

Schwab does not offer precious metals, currencies, warrants, or contracts for difference.


Learning Resources


Charles Schwab Resources Rating

During our exploration, we found quite a few educational resources at Schwab. First is general investment education, which takes the form of articles, videos, branch workshops, and a quarterly newsletter aptly entitled On Investing. You don’t need to have a Schwab account to download it.


Charles Schwab Education Review


Another significant avenue of investment education at Schwab is security profiles. They deliver quite a bit of data. For stocks, we found upcoming corporate events, earnings history, peer comparisons, major news headlines, and equity reports. Third parties include Ned Davis, Market Edge, Argus, and Morningstar. Schwab also offers its own lineup of stock report cards.

Screeners at Schwab provide tons of criteria to search by. For stocks, we were able to specify payout ratio (TTM), Credit Suisse research rating, negative earnings surprises, price/book ratio, and many more. Schwab’s site has pre-defined screens for quick and easy searches.

Option traders have lots of resources at Schwab, including both general education and trading tools.


Customer Service Options


Charles Schwab Customer Rating

Traders who still have questions after going through the broker’s large selection of educational materials can call a Schwab associate any time of the day or night. There’s also a human online chat function that is up and running 24 hours a day, 7 days a week. There isn’t a robo chat service at Schwab, which is one weakness compared to some of its rivals. There is Chinese language service, though.


Charles Schwab Customer Service Review


We also like Schwab’s very extensive network of branch locations. We counted over 300 offices, including a few international spots.

Customers who prefer to do everything on their own can logon to the broker’s website and click on the “Service” tab in the top menu. Here, there are many self-help resources, including paperless settings, a wire form, and a tool to add a trusted contact person.


Account Types


Charles Schwab Account Rating

Schwab’s primary taxable brokerage account is the Schwab One® account. There are many other account types available, though. The brokerage house offers a 529 plan, UGMA/UTMA accounts, trusts, estates, and institutional accounts.

Retirement savers also have several choices. There are multiple IRA’s, including SEP, SIMPLE, Roth, traditional, inherited, and rollover. The brokerage firm offers a PCRA (Personal Choice Retirement Account®) and a self-employed 401(k).

Perhaps the best part of these accounts is that none of them have any fees; and all except charitable accounts have no minimum balance requirement.


Website


Charles Schwab Investing Rating

Schwab clients get to use a very well-thought-out website. A top menu makes navigation easy; and we found the trade bar user-friendly. It sits at the bottom of the browsing window and provides real-time data on an entered ticker symbol. A petite chart can be displayed above the bar; but unfortunately, trades cannot be placed on it. The broker’s order ticket appears on a new web page and provides plenty of advanced features for both equity and option traders.


Charles Schwab Investing Review


Besides its basic website trading tools, Schwab also has a browser platform. Called StreetSmart Central, it is launched from the website. During our analysis, we found a very good order form called the All-In-One Trade Ticket. It can send orders to the exchanges for futures, options, stocks, ETF’s, and closed-end funds.

Charting on Central offers several graph styles, including exotics like point and figure, invisible, renko, scatter, and kagi. A maximum of 20 years of price history can be shown. There are some very good option tools on Central, including pre-installed multi-leg trades.


Mobile Trading


Charles Schwab App Rating

Now we come to Schwab’s mobile app, and there are actually two of them. The first is StreetSmart Mobile, an app modeled after the Central platform. During our testing, we found the software to have a few flaws. For example, text sometimes overlapped other text in some modes. But in other places, the app exceeded our expectations with really good option tools and an advanced trade ticket.


Charles Schwab Review: Mobile App


And then there’s the regular Schwab app, which delivers pretty much everything the StreetSmart app fails to: mobile check deposit, live streaming of CNBC, bill pay, audio market updates, and funds transfer.

Charting on the app offers price history back to 1980 for stocks old enough to have such data. We found lots of technical studies and several graph styles. Comparisons can be made, and a chart can be rotated horizontally.


Desktop Software


Charles Schwab Trading Rating

The showpiece of Schwab’s software lineup undoubtedly is StreetSmart Edge. This is the broker’s desktop software, and it packs quite a punch. Direct-access routing is possible, although you do have to sign up for it (click on “Schwab.com” in the top menu and then choose “Add Direct Access”). The same is true for Level II quotes.


Charles Schwab Street Smart Edge


Other highlights on the platform include technical analysis from Recognia, live streaming of financial news in both article and video formats, a block trade indicator, and an All-In-One Trade Ticket similar to the one on Central.

Charting is very user-friendly, and perhaps too much so. We counted less than 50 technical studies. But there are many strengths, including full-screen mode, the ability to save a chart, and extended-hours price history.


Other Software


Charles Schwab Software Rating

Schwab doesn’t stop with its desktop program, either. The broker’s customers can use a skill on Amazon Echo devices to get quotes on individual investments and listen to market updates.

There is also a platform for smartwatches. It can show a miniature graph and current market price. Other trade information that can be accessed on the app include bid and ask numbers.

Schwab does not have an app for Apple TV.


ETF’s


Charles Schwab ETF Investing Rating

Using Schwab’s great platforms, traders can buy and sell exchange-traded funds. An ETF center on the broker’s site presents many tools that fund traders will like. There’s an ETF comparison tool that shows potential investments side-by-side in columns. We also like a keyword search tool that looks for funds by keyword. For example, when we typed in silver, we received results for SLV, the iShares Silver Trust, and several other exchange-traded products connected to the precious metal.

ETF profiles have information on holdings, distribution history, option chains if available, and analyst reports. Schwab is one analyst, but there are third parties, too.


Mutual Funds


Charles Schwab Mutual Funds Rating

Schwab clients get more great resources on the company’s mutual fund hub, found under the “Research” tab in the top menu. A quick search tool is able to look for investments based on Morningstar rating, investment amount, or transaction fee status, among others.


Charles Schwab Funds Review


Schwab offers a Select List of mutual funds. These securities are pre-screened by the broker’s licensed investment advisors for their potential upside.

Schwab’s full screener is able to search by many criteria. These include sector exposure, average maturity, annual return, and top ten holdings. When we excluded all variables except “open to new investors,” we got 5,704 funds. That’s a rather small list by industry standards; but 3,353 have neither load nor transaction fee.


Commission Schedule


Charles Schwab Pricing Rating

Schwab charges $0 for stock and ETF trades if they are placed online. Trades placed through its automated phone service cost $5 (except for REITs, which are still $0); and trading with a live rep is $25. Option trades have the same base, but there is an additional 65¢ per contract per side, with no discount for active traders.

Futures are $1.50 per contract per side; and there is no extra charge for using a live agent over the phone. Transaction-fee mutual funds are $49.95.

New issues of bonds have a markup in the price, which today must be disclosed in writing. Most Treasury securities have zero commissions, including auction listings. Corporate debt costs $1 per bond.


Promotion



New and existing customers of Schwab can earn 500 free trades with a qualifying deposit of $100,000 or more. The funds must come from outside of Schwab within 45 days of account opening. The commission credit can be used not only for stocks, options, and ETF's, but also per-contract option fees. The free trades expire after 12 months.


Portfolio Management


Charles Schwab Portfolio Rating

Although Schwab certainly offers a great deal for self-directed traders, it keeps the ball rolling in this investigation with its laudable account management services. A robo program is free; although accounts must keep a large free-cash balance. Some of the ETF’s are Schwab funds, which may raise some eyebrows. And then there’s the $5,000 account minimum.

Old-school programs are available, and there are some good prices on them. Schwab Private Client™ starts at 0.80% for a $500,000 investment; the rate decreases for higher balances. A team of human advisors is assigned to an account, and multiple asset classes can be traded.

There is also a hybrid system at Schwab that combines digital management with human advice. The service costs $30 per month with a $300 one-time financial planning fee.


Banking Tools


Charles Schwab Banking Rating

Most people know Schwab for its investing services; that’s too bad because it has some outstanding banking tools. A checking account comes with free checkwriting and a debit card. Account holders get ATM fees reimbursed all around the world with no limit. Schwab is the only brokerage firm we know of to offer this fantastic deal. Even better, there are no fees or minimums on the account. Schwab does require the checking account to be linked to a brokerage account, one drawback.


Global Stocks


Charles Schwab Stocks Rating

Schwab offers direct trading on 12 foreign exchanges via the Global Account™. While there are no fees or minimums with it, the broker does charge commissions, and they can be fairly steep.

Trades on the Tokyo Stock Exchange, for example, cost ¥2,000. More exchanges are available in a regular brokerage account; although trades must be placed over the phone with a representative, which further increases the trade fee.


Other Services


Charles Schwab Services Rating

Schwab offers both dividend reinvestments and automatic purchases of mutual fund shares. There is no fee for either service.


Charles Schwab Comparison


Charles Schwab Comparison

Perhaps the ultimate test of a broker’s prowess is how it compares to its rivals. At Firstrade, traders pay no per-contract charges on option trades and all mutual funds are free to trade.

TD Ameritrade offers more mutual funds than Schwab. It also has more sophisticated software.

Interactive Brokers offers lower trading fees on foreign stocks but requires at least $10 per month in commissions.


Recommendations


Individual Retirement Accounts: For IRA’s, we recommend TD Ameritrade for its larger list of target-date mutual funds.

Beginners: Due to Schwab’s many educational resources, we can recommend it to new investors.

Mutual Fund Investors: With over 13,000 funds, TD Ameritrade is our pick.

Active ETF and Stock Trading: While Schwab does have some strengths here, we think Interactive Brokers or TD Ameritrade would be a better choice.

Long-Term Investors and Retirement Savers: Schwab would be a good choice for investors focusing on the long term. So would Ally Invest and Firstrade.

Small Accounts: Schwab has no account minimum and no fees. Great choice.


Awards





Charles Schwab Review Summary


With 4 stars and above in every single category analyzed, Schwab is a consistent outperformer. With an ultra-low commission schedule, it also is a very good value.


Open Charles Schwab Account




Open Schwab Account






Charles Schwab Questions and Answers


What investments can clients make through Charles Schwab?


Charles Schwab customers can trade the following asset types: stocks, bonds, mutual funds, futures, Treasury issues, options, CDs, insurance, ETFs, annuities, non-U.S. securities and ADRs, WEBs and Canadian foreign orders.


How much are Charles Schwab's fees?


List of all the fees Charles Schwab brokerage is charging is under this link.


What are Charles Schwab IRA fees?


List of all the IRA fees Charles Schwab is charging is under this link.


What interest does Charles Schwab pay on cash?


Charles Schwab interest rates on uninvested cash are discussed in Charles Schwab cash sweep options article.


What are Charles Schwab margin interest rates?


Current Charles Schwab margin interest rates could be found here.


What is Charles Schwab account minimum requirement?


Charles Schwab does not have minimum requirements for brokerage accounts.


What minimum deposit is required to open Charles Schwab account?


Charles Schwab minimum deposit requirement to open taxable or IRA account is $1,000 for cash account and $2,000 for margin account.


What is Charles Schwab clearing company?


Charles Schwab is self clearing.


How to close Charles Schwab account?


You could learn how to close or transfer your Charles Schwab account under this link.







Charles Schwab Margin Rates


Debit Balance Margin Rate
$0 - $24,999.99 9.325%
$25,000 - $49,999.99 8.825%
$50,000 - $99,999.99 7.875%
$100,000 - $249,999.99 7.825%
$250,000 - $499,999.99 7.575%
$1,000,000+ call 877-752-9749



Charles Schwab IRA Fees


Fee Amount
Charles Schwab IRA setup fee $0
Charles Schwab annual IRA fee $0
Charles Schwab IRA termination fee $0
Charles Schwab account maintenance fee $0
Charles Schwab account inactivity fee $0
Charles Schwab outbound full account transfer (ACAT) fee $50
Charles Schwab outbound partial account transfer fee $25



Charles Schwab reviewed by Brokerage-Review.com. Rating: 4.5