Charles Schwab vs. Betterment Introduction
If you want investing plus cash tools in one place, both Betterment and Charles Schwab try to cover that full money-management view. Before deciding between them, review the side-by-side breakdown below:
Cost
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0.65 per contract
|
$0
|
$0
|
|
Betterment
|
na
|
na
|
na
|
0.25%
|
0.25%
|
Services
Investment Services
Schwab customers can pick between self-directed and investment-advisory accounts. The advisory lineup includes both automated portfolios and human-managed options. Schwab’s robo program is free. Traditional advisory programs use different pricing schedules that usually come in under 1% annually.
Investors who want to trade on their own can access a wide range of assets, including:
- Stocks
- Foreign stocks
- OTC stocks
- Bonds and other fixed-income assets
- Funds (including mutual, exchange-traded, and closed-end)
- Options
- Futures
Betterment does not offer self-directed accounts, which is the first major difference. Its advisory lineup also does not include full-service wealth-management accounts, although clients can still schedule time with human advisors. Betterment’s automated service costs 0.25% per year or $5 per month, depending on total balance and whether direct deposit has been set up.
In addition to ETF portfolios, Betterment also allows investing in cryptocurrencies. This service charges 1% per year. Unlike the ETF program, it also applies trading commissions (roughly 15 basis points per trade).
Winner: Schwab
Cash-Management Services
Investing is only one piece of what these companies offer. Betterment provides checking and cash savings-style accounts
with multiple perks. The checking account pays no interest, but it includes a Visa debit card
with cash-back offers at participating retailers and unlimited ATM fee reimbursements. The savings account pays
3.25% APY right now, and since it technically isn’t a traditional savings account, there is no monthly cap on withdrawals.
Schwab also offers checking and savings accounts. The yields are generally well below what Betterment pays, but Schwab does include bill pay and a free checkbook with its checking account, features that are not available at Betterment.
Similar to Betterment’s debit card, Schwab’s card provides unlimited ATM withdrawals with no fee and has a 0% foreign transaction fee. On top of that, Schwab offers American Express credit cards and a home-loan program through Rocket Mortgage®.
Winner: Pretty close overall
PC Software
Since Betterment focuses on automated investing, it does not provide self-directed trading tools on its website. The platform is clean and minimal with few extras. Individual securities do not have robust profiles, for example. There are some educational materials that newer investors can use.
Schwab’s website includes education as well, and its learning library is much deeper than Betterment’s. The site also features detailed security pages with charts, analyst opinions, and a more advanced trade ticket.
Schwab’s main website is just the starting point. Self-directed clients can also use multiple additional platforms for charting, research, and order entry. These include a desktop platform (thinkorswim) and two web-based platforms (thinkorswim and main app). Together, these four platforms offer a long list of useful tools, including:
- Level II quotes
- Direct-access routing
- Live streaming of CNBC
- Advanced option tools with integrated spreads
Winner: Schwab
Mobile Apps
On mobile, the theme is similar: Betterment keeps the focus on hands-off investing, while Schwab supports both managed accounts and active brokerage trading. While testing Betterment’s app, we noticed cash-back offers and a refer-a-friend program.
Schwab offers two apps. One is thinkorswim Mobile, which includes a very advanced order ticket. For example, price-based triggers are available, and OTO and OCO orders are included. One ongoing drawback we run into with thinkorswim Mobile is screen issues on our iPhone 6. We don’t see those problems on Schwab’s primary app, which supports trailing orders and stops. It also supports mutual-fund trading and multi-leg options strategies.
To round things out, Schwab’s main app includes an Artificial Intelligence feature, plenty of market news, watchlists, analyst reports in pdf form, and alerts. Mobile check deposit, which is not found on Betterment’s app, is a nice extra.
Winner: Schwab
Margin
With Schwab brokerage accounts, clients can borrow against securities to purchase additional investments. This can be convenient,
but it is not free. Schwab currently charges margin rates that range from 11.825% to 10.075%, depending on the debit balance. Loans above $500k can qualify for negotiated pricing.
Margin requirements can vary widely by asset type and market value. Short selling is available, and leverage begins at $5 per share on short positions ($3 per share on long positions).
Since Betterment is a robo-advisory firm, it does not provide margin borrowing.
Winner: Schwab
Additional Services
Fully-paid Securities Lending Program: Schwab has it.
Extended Hours: Schwab self-directed clients can trade before the opening bell and after the closing bell.
Automatic Mutual Fund Purchases: Again, only at Schwab.
Dividend Reinvestment Plan: Dividends can be automatically reinvested at Betterment and Schwab.
IRA Service: An Individual Retirement Account can be opened at either firm. Schwab has more IRA types, including the SIMPLE IRA.
Initial Public Offerings: Only at Schwab.
Fractional-share Trading: Available at both firms (self-directed accounts at Schwab are limited to the S&P 500 stocks).
Winner: Schwab
Websites
Charles Schwab: $0 commissions + ACAT rebate + satisfaction guarantee at Charles Schwab.
Betterment: no promotions at this time.
Our Recommendations
Beginning Investors: One of the simplest ways to start investing is with a managed account. You can do this at either Betterment or Schwab, and we do recommend using a human advisor in some form when possible.
Frequent Stock Trading: Schwab for clear reasons. Strong stock research on Schwab’s website paired with a desktop platform is a great combination.
Retirement Planning & Long-Term Investing: Both companies offer access to financial planners. Schwab provides more self-directed tools online, including IRA calculators, and it offers more account types, including custodial accounts.
Small Accounts: Schwab has no ongoing fees and no minimums for self-directed accounts. Its robo service, however, usually requires $5k to start. Betterment has no minimum, but its flat monthly fee is not ideal for small balances.
Mutual Funds: Schwab is our choice here. It has strong mutual-fund tools and research.
Charles Schwab vs Betterment: Judgement
Betterment may have helped bring robo investing into the mainstream, but compared with Schwab today, it is a tough matchup given Schwab’s robo service plus a much broader set of investing and trading capabilities.
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Updated on 3/25/2026.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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