Charles Schwab Review 2023
Great for Both Beginners & Experts
Charles Schwab is one of the most popular names when it comes to discount brokerage firms. Founded more than 50 years ago, the company attracts everyone from beginner investors looking for additional help to experienced traders looking for a platform to match their skillset.
Charles Schwab offers everything from commission-free trading to robo-advisory services to advanced trading tools. Keep reading to learn more about the pros and cons of Charles Schwab and whether it’s the right brokerage firm for you.
Commissions & Fees - 9
Customer Service - 9
Ease of Use - 9
Tools & Resources - 10
Investment Opportunities - 8
Accounts Available - 9
9
Charles Schwab caters to everyone from beginner investors to experienced traders thanks to its wide array of investment options, educational resources, trading tools, and commission-free trading. It has few notable downsides. But if we're being picky, we'd love to see Schwab lower the account minimum for its robo-advisor service and add support for cryptocurrency and forex investments.
Pros & Cons
pros
cons
Who Is Charles Schwab For?
It may sound like an overstatement to say that Charles Schwab is for everyone, but this brokerage firm really can work for almost any type of traditional investor, from beginner to expert.
On the beginner end, Charles Schwab offers simple, diversified funds and robo-advisor services for customers who don’t feel comfortable choosing individual investments. There are also a plethora of educational resources to help you learn the ropes along the way.
On the other end of the spectrum, experienced investors should also likely find what they’re looking for from Charles Schwab. The broker doesn't charge any commissions on stock or ETF trades and advanced tools are available through the StreetSmart Edge® trading platform.
It’s worth noting that while Schwab does have a wide variety of investment options (which we’ll get into shortly), it doesn’t allow for cryptocurrency or forex trading. Investors who want an all-in-one platform that includes those investment options may want to look elsewhere.
Charles Schwab Features
| Minimum Investment | $0 |
| Stock/ETF Trades | $0 |
| Options Trades | $0.65/contract |
| Mutual Funds | 3,700+ no-transaction fee (NTF) mutual funds |
| Investment Types | Stocks, OTC/Penny Stocks, ETFs, Mutual Funds, Bonds, Options, Forex, Cryptocurrencies, Futures |
| Accounts Types |
|
| Broker Assisted Trade | $25 |
| Virtual Trades | |
| Customer Service | Phone: 24/7; Live Chat: 24/7; Email; Branch Offices |
What Makes Charles Schwab Great?
Charles Schwab is one of the most well-known names in trading and one of the most popular online brokerage firms. Below we’ll share a few features that make the platform great.
Investment Selection
Charles Schwab offers an excellent selection of investment options. First, you’ll have access to all of the standard investments like stocks, bonds, and exchange-traded funds (ETFs). The broker also has a huge selection of mutual funds, including over 4,200 no transaction fee (NTF) mutual funds.
In addition to the typical investments that you’d expect to find on any platform, Charles Schwab also offers a few additional investment options that stand out. First, Charles Schwab offers fractional share investing through Schwab Stock Slices™. Charles Schwab also offers options trading with no commission and only a small contract fee.
Trading Platforms
As we mentioned, Charles Schwab offers trading tools that appeal to experienced investors. First, the brokerage firm offers StreetSmart Edge, which is its premier trading platform designed to help you optimize your trading strategy. You can build a dashboard of custom screeners and watchlists, as well as dive into fundamental and technical analysis tools, as well as advanced charting.
This platform is designed to fit the way you trade. So every investor can customize their dashboard to work best for them and their trading style.
In addition to its advanced trading platform, Charles Schwab also offers trading tools on its website and mobile app. Using either option, you can monitor the market and your portfolio, get real-time quotes, screen for trading opportunities, and more. And on the website, you can use Schwab’s All-In-One Trade Ticket to build and enter orders to create multi-leg options strategies.
Education & Resources
Just as experienced investors will appreciate Schwab’s trading tools, those who are still learning the ropes will appreciate the many educational resources available on the website. Charles Schwab offers a huge library of articles to help you learn everything you need to know about investing, including how to get started, how the different types of investment accounts work, and how to dip your toe into more advanced strategies. You can truly learn it all on this platform.
Charles Schwab also has resources available to help you set and reach your investment goals. There are a variety of calculators available to help you find out everything from what your monthly payment might look like when you buy a home to whether you’re on track for retirement. Schwab customers even get a complimentary financial plan that includes information and action steps for your retirement goals, personal finances, and more.
Account Types
Charles Schwab offers an excellent array of investment accounts to choose from. When you sign up, you can choose to open the standard individual or joint taxable brokerage account. The broker also offers a variety of individual retirement accounts (IRAs), including a traditional IRA, Roth IRA, SEP IRA, and SIMPLE IRA.
Finally, Schwab offers several accounts for you to start saving for your children. You can use Schwab’s 529 plan to start saving for your child’s college education. And the broker’s custodial accounts allow you to start investing for your child in a taxable brokerage account, which will be passed to them when they reach adulthood.
Robo-Advisor Services
If you’re new to investing and need a bit of extra help, then Schwab can offer that. The broker offers a robo-advisor service called Schwab Intelligent Portfolios. The platform will build, monitor, and automatically rebalance your portfolio. You’ll get a customized portfolio of low-cost ETF. And, most impressively, Schwab Intelligent Portfolios doesn't come with any advisory fees or commissions.
You can also choose to upgrade to Schwab Intelligent Portfolios Premium. This service offers all of the same things as the standard robo-advisor service. However, you’ll also get one-on-one guidance from a CFP at Schwab, as well as access to interactive planning tools and a personalized plan for your financial goals. However, while the standard robo-advisor service is free, Schwab Intelligent Portfolios Premium requires a one-time planning fee of $300 and a $30 per month advisor fee.
Banking & Cash Management
In addition to the investment account that Schwab offers, customers also have access to standard banking accounts such as checking and savings accounts. These accounts connect with your investment accounts, allowing you to seamlessly move money where it needs to be.
Schwab’s checking account offers no fees or account minimums, no foreign transaction fees, and 0.03% APY on your checking account balance. The savings account also has no fees or minimums and offers 0.05% APY. These rates are considerably lower than many available on the market, but a great option for someone looking for a one-stop shop for their finances.
What Are Charles Schwab’s Drawbacks?
As you can see, Schwab has many great things going for it, which have helped to make it one of the most popular brokerage firms on the market. However, there are also a few disadvantages to know about.
High Margin Rates
Charles Schwab may not be the most desirable brokerage firm for investors who frequently trade on margin (meaning with funds borrowed from their broker). Schwab’s margin rates are considerably higher than many of its competitors, making it a more expensive option for investors who use this trading strategy.
No Cryptocurrency or Forex
Charles Schwab doesn’t currently offer foreign exchange (FOREX) or cryptocurrency trading. If those assets are a part of your investment strategy, you may either need to choose a different brokerage firm or use multiple platforms for different investments.
Note that while you can’t directly invest in cryptocurrency with Schwab, there are now a few ways for you to gain exposure to cryptocurrency in your portfolio, including investing in crypto trusts and funds, which resemble traditional stock funds. You can also trade Bitcoin futures contracts and buy stock in companies that have a relationship with cryptocurrency (Coinbase, for example).
Robo-Advisor Minimums Are on the High Side
We’ve talked about Schwab’s Intelligent Portfolios, which are a great option for investors who don’t want to choose their own investments. We especially love that Intelligent Portfolios has no annual advisory fee.
But the downside is that this service requires a minimum investment of $5,000. Considering robo-advisors are usually a popular option among new investors, $5,000 might be out of many people’s reach.
And for the premium version of the robo-advisor service, the account minimum is $25,000, which will be out of reach for most beginners. It makes the service considerably less attractive than similar services offered by platforms like Betterment and Wealthfront.
Charles Schwab Pricing & Fees
We’ve already talked a bit about Charles Schwab’s pricing and fees, but we’ll dive into them a bit further in this section. As we mentioned, Schwab offers commission-free trading on stocks, ETFs, and Schwab mutual funds. You can trade those assets entirely free online.
The only time you’ll pay is if you use a broker-assisted trade, which requires a $25 service charge. Options also trade commission-free but have a per-contract fee of $0.65, which is in line with many other brokers.
It’s worth noting that commission-free trading on mutual funds only applies to Schwab funds. If you purchase other mutual funds, you’ll pay trading fees that can be up to $74.95 per purchase.
Here’s a summary of some of the other fees Schwab charges:
- Over-the-counter (OTC) U.S. stocks: $6.95
- Futures: $2.25
- Futures options: $2.25
- Canadian securities: $6.95
- OTC foreign stocks: $50
As far as account fees, none of Schwab’s standard brokerage accounts or banking accounts require any fees. The only exception is the Schwab Intelligent Portfolios Premium, which requires a one-time planning fee and a monthly advisory fee, as we shared earlier.
Is Charles Schwab a Fiduciary?
Charles Schwab isn't a fiduciary itself. But the independent investment advisors it can refer clients to are fiduciaries as the company has heavily advertised on its website. A fiduciary has a legal requirement to put your interests above of their own. For financial advisors, this means putting your best financial interests first and avoiding conflicts of interest.
How to Contact Charles Schwab
Schwab makes it easy for customers to contact the company. You can communicate with a representative by either phone or live chat. Live chat support is available 24/7 through Schwab’s website. Here are the phone numbers where you can reach Schwab:
- 877-519-1403 (General customer service)
- 800-435-4000 (Brokerage services)
- 888-403-9000 (Banking services)
- 800-992-4685 (Global services)
- 855-694-5208 (Schwab Intelligent Portfolios)
- 888-245-6864 (Trading services)
- 800-724-7526 (Workplace retirement services)
Finally, unlike many online brokers, Schwab still has physical branches that customers can visit to speak with a customer service representative in person.
Best Alternatives
While Charles Schwab would be a great broker for investors of all experience levels, there's a lot of competition out there. Here's a taste of how what others have to offer:
| Highlights |  |  |  |
|---|---|---|---|
| Rating | 9/10 | 9/10 | 8.5/10 |
| Min. Investment | $0 | $0 | $0 |
| Stock Trades | $0/trade | $0/trade | $0/trade |
| Options Trades | $0.50/contract | $0.65/contract | $0 |
| Crypto Trades | |||
| Mutual Funds | |||
| Virtual Trading | |||
Dive deeper into how Charles Schwab stacks up with comparison articles:
- Vanguard vs. Fidelity vs. Charles Schwab
- Charles Schwab vs. TD Ameritrade vs. Tastyworks
- Betterment vs. Charles Schwab vs. Robinhood
Bottom Line
Charles Schwab has long been one of the most popular brokerage firms on the market, and it’s easy to see why. The company caters to everyone from beginner investors to experienced traders, thanks to its wide array of investment options, educational resources, trading tools, and commission-free trading.
Just about everyone can find what they’re looking for with Schwab. There are just a few downsides that might make you think twice about this popular broker, including the high margin rates, the high account minimum for the robo-advisor service, and the lack of cryptocurrency and forex investments.
Linda’s 3 year ago comment–not much has changed. The Good: Schwab’s customer service has been great. 99% of the people have been professional and helpful. Their Street Smart Edge is a good charting application. The Cadillac is of course is TD Thinkorswim for options and futures, but Edge is a fairly good tool. The Bad and Ugly, is that Schwab does nothing for DYI traders. Their IT department and applications for analysis are 5th grade level. Their systems logs users out every 15 minutes for Firefox users. Worst is their Portfolio design and tools. Schwab CANNOT download reports to EXCEL! Their data is inconsistent and incorrect between applications. There is NO portfolio analysis application. They have no risk analysis done–just arbitrary “asset allocation” with no analysis. I have a M.S. in Statistics/OR and 20 yrs+ in corporate software systems design. Schwab needs to fire the head of their information technology management as s/he knows zip about how to design financial applications. Have been contacting them for about a year–no response. In fairness, there is not much better with Fidelity or Vanguard. These old brokers do not understand their Customers.
I had trade with Schwab binary and i lost about $18k to their trade. I tried withdrawing and i was locked out t from accessing my account . I go on search in the web and i was recommended by an online trader to contact International Recovery Agency (IRA on their email [email protected] com and i also called their help desk at +61488893280. They did their very investigation and that was how my money with few bonus was recovered. Thanks to IRA i hope they can still be of help to some one out there.
For about a year, Schwab’s Institutional customer service has continually gone down hill. Our firm used to open accounts at Schwab as our first choice because of their service, now it is at the bottom. You have to babysit everything you submit or it goes in a black hole, never to be found.
For traders, Schwab is truly your father’s Oldsmobile. The platforms are functionally bare minimum. The most annoying thing is that Schwab has tons of institutional rules that govern the order very closely. Not SEC rules, but Schwab rules. You also get a LOT of hardcopy stuff in the mail – that you can’t opt out of. Not advertising, but stuff that’s also in digital files. Unending redundancies.
The process of placing/changing a trade is multiple clicks. Confirmations come on a slow, funky little window – and no audio signal. You just have to look for confirmations. Schwab prides itself on service. But what passes for service is ritual verbiage – lots of words, little content and NO knowledge. You will be passed along to 2,3,4 people for an answer to a simple question. Everyone you talk to is much more interested in Schwab rules than your trading issue. Bottom line is that Schwab treats trading like it’s kind of a bad thing. They just don’t really approve of taking profits and few clues about how to equip the process. This is pure financial institution ethos with a name for retirement management. If you want to invest in Mutual Funds and maybe buy a few DOW stocks to just “put away”, go for it. If you want to trade equities, go somewhere else. I’ve ben there for 6 weeks and am all set to move to brokerage that operates in the 21st century. The 20th is another whole historic thing. And if you have a Mac, totally forget it. They’ll tell you they’re Mac-equipped but what they have is a lot of rusty PC platforms that can operate (most of the time) to the edges of Citrix.
I have been a Schwab customer for about 20 years and am now considering leaving them. They have presumed that they have the power of determining suitability of my investment choices. That is a proper role for an investment adviser, but not for a broker. I have not appointed them as an adviser. This is presently unresolved.
They forced me to close out my account because I had several permitted options positions. Horrible customer service.
I’ve been a Schwab customer for 6 months and I love it. My favorite part of being a Schwab customer is the Schwab One mutual funds and etfs that are free to trade. Huge savings when investing for the long term (also low expense ratios on some of their accounts).
My only recommendation for improvement would be to allow for automatic dividend reinvestment with foreign stocks. Stocks such as ADRs are not eligible for dividend reinvestment.
Also Schwab offers models that help investors track their asset allocation and provide up-to-date performance on accounts as well as the model benchmark:
http://rwinvesting.blogspot.com/2011/07/what-youve-always-wanted-to-know-about.html
Nice presentation on the benefits of using Schwab.
I am a Schwab customer and have been for years. One of the benefits of being a brokerage customer is access to their banking products too.
Not only that, but they used to have a 2% cash back credit card.