Charles Schwab Review 2024: Pros, Cons & How It Compares
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Our Take
4.9
The bottom line:
on Charles Schwab's website
Pros & Cons
Pros
Commission-free stock, options and ETF trades.
Four trading platforms with no minimums or fees.
Above-average mobile app.
Extensive research offerings.
Large fund selection.
Cons
Low interest rate on uninvested cash.
Compare to Similar Brokers
Current Product
NerdWallet rating 4.9 /5 | NerdWallet rating 4.3 /5 | NerdWallet rating 4.6 /5 |
Fees $0 per online equity trade | Fees $0 per trade | Fees $0 |
Account minimum $0 | Account minimum $0 | Account minimum $0 |
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Full Review
Is Charles Schwab right for you?
Most likely. Schwab checks the boxes of every type of investor: Stock traders will appreciate $0 trading commissions and sophisticated platforms, research and tools; beginner and fund investors will benefit from the wide selection of inexpensive and low-minimum mutual funds and index funds.
Read on for a detailed overview of Charles Schwab's fees, investment selection and trading platforms, including how the platform performed in our hands-on testing. (For investors who want investment management, Schwab also has a robo-advisor and financial advisor offering, that we've also reviewed: Schwab Intelligent Portfolios.)
IN THIS REVIEW:
Where Charles Schwab shines
Well-rounded offering: Charles Schwab caters to investors of all stripes: Beginner investors will appreciate the company's $0 account minimum, while the $0 commission for stock and exchange-traded funds will appeal to active traders.
Extensive research: Schwab receives high marks for its research offerings, which include Schwab’s own equity ratings, in addition to analyses and commentary from the industry’s top research firms.
Fund selection: Schwab has a large selection of funds with low expense ratios and funds that charge no transaction fees.
Where Charles Schwab falls short
Smaller selection of fractional shares: Schwab offers access to fractional shares of S&P 500 stocks. While these may be the stocks many investors are interested in, other brokers that offer fractional share trading provide a larger selection.
Default sweep interest rate: When interest rates rise, some brokers offer clients higher interest rates on uninvested cash, but Schwab's default interest rate (the amount customers receive without opting into any additional products) is low.
Charles Schwab is best for:
Beginner investors.
Advanced traders.
Investors seeking no-minimum index funds.
Investors who rely on premium research.
Charles Schwab at a glance
Account minimum | $0. |
Stock trading costs | $0. |
Options trades | No base commission; $0.65 per contract. |
Account fees (annual, transfer, closing, inactivity) | No annual or inactivity fee; $50 for full transfer out of assets. |
Interest rate on uninvested cash | 0.45%. |
Number of no-transaction-fee mutual funds | More than 8,000 no-transaction-fee mutual funds. |
Tradable securities |
|
Trading platform | Four platforms offered with no trade minimums or fees. |
Mobile app | Three mobile apps: Schwab Mobile, thinkorswim and StreetSmart Mobile. |
Research and data | Research from providers including, Morningstar, Argus, and S&P, plus more in-house generated commentary and tools. |
Customer support options (includes how easy it is to find key details on the website) | Phone, email, chat 24/7, and in-person support available at branches Monday through Friday 8 a.m. to 5 p.m. Some branches have Saturday hours. |
More details about Charles Schwab's ratings
Account minimum: 5 out of 5 stars
Schwab has no account minimum, and offers access to more than 200 funds with minimum investment requirements of $100 or less.
Stock trading costs: 5 out of 5 stars
Like many brokers today, Schwab has no commissions for stock, options, and ETF trades. Schwab does charge $6.95 per OTC trade. Because of this change, investors wanting to trade penny stocks may want to look elsewhere.
Options trades: 4 out of 5 stars
Schwab doesn’t charge any per-trade commissions for options, but it does charge $0.65 per contract. This is a typical charge, and is on par with other brokers.
Account fees: 4.5 out of 5 stars
Schwab has some of the lowest account fees around — if you’ll have to pay them at all. Schwab doesn’t have any annual or inactivity fee. The fee to transfer all of your assets from your account is $50, though there's no fee for a partial transfer.
Interest rate on uninvested cash: 2 out of 5 stars
Schwab pays about 0.45% on uninvested cash in your brokerage account (this rate can vary based on market conditions). Schwab does offer clients options for getting a higher rate for cash products, but you'll need to select and opt into them.
Number of no-transaction-fee mutual funds: 5 out of 5 stars
Schwab delivers access to more than 8,000 no-transaction fee mutual funds, and within its own proprietary lineup of index funds and ETFs, Schwab now offers some of the lowest expense ratios available. All told, more than 2,400 funds on Schwab's platform have expense ratios of 0.50% or below.
The selection is also easy to navigate. Schwab's ETF Select List helps narrow the choices, featuring picks for the best fund in selected categories (more on this below). You can sort the list by feature, including expense ratio, Morningstar category and benchmark index. There's also the Personalized Portfolio Builder tool, designed to help you create a diversified portfolio based on your financial goals, risk tolerance and time horizon.
Tradable securities: 5 out of 5 stars
Charles Schwab has a large selection of tradable securities, including mutual funds, ETFs, index funds, options, forex and futures.
When it comes to bonds, Schwab has a comprehensive selection. Choices include new-issue municipal and corporate bonds, plus government options such as Treasurys.
Schwab Stock Slices offer access to fractional shares, so investors can buy a small slice of a stock rather than paying the full share price. For example, if a stock costs $100 a share, and you buy a $10 slice, you’d own 10% of a share. Single slices are available for as little as $5, and investors can buy up to 10 slices at a time. However, this feature is only available for stocks of S&P 500 companies. Similar brokers that offer fractional trading don't have such restrictions on their fractional share offerings.
Crypto availability: Charles Schwab clients aren't currently able to trade cryptocurrencies directly. However, the broker does offer access to spot Bitcoin ETFs.
Trading platform: 4 out of 5 stars
In addition to the basic trading capabilities on Schwab's website, the broker offers several robust trading platforms, all of which are free and available to all trading services clients.
How we nerd out testing trading platforms
Our reviewers — who are writers and editors on NerdWallet’s content team — hands-on test every online broker platform in our analysis. That way, we’re able to report on every aspect of the user experience, from funding a new account to actually placing trades.
We score each broker against a set of criteria that factors in both the capabilities offered and the actual user experience of trading with those capabilities. This includes how easy it was to sign up for and fund a new account. Note that a broker may score very highly for the platforms it offers, but low for the experience of actually using that platform. These are scored separately in our analysis, and they are weighted evenly when factored into the broker’s overall score. This means a broker can offer an advanced trading platform, but if it is clunky to use or the process of opening an account is unnecessarily arduous, that will be reflected in their score.
Its premier offering is StreetSmart Edge, a customizable platform available with downloadable software or accessible via cloud-based technology online. It also has a suite of programs called StreetSmart Central for options trading. Finally, the broker offers mobile trading, available on either the Schwab or StreetSmart Mobile apps.
Both StreetSmart and Schwab.com provide access to research and robust tools catering to various types of traders. Basic trades can be placed on Schwab's website, while the other platforms offer more sophisticated features.
StreetSmart Edge is designed for efficiency, with simple navigation and customization that's meant to match your trading style. The many advanced features include robust charting tools, the ability to trade multiple securities in the same order window (and with a variety of order types) and tools to monitor your market exposure. The customizable features of this platform are notable, including the Balance Bar, which gives you a quick overview of your account and buying power, along with the ability to create and edit multiple trading layouts.
Finally, you can quickly research a symbol, view streaming market data and enter an order.
Schwab.com lets traders monitor their portfolio and the markets, access research and view technical data. It features an intuitive trade ticket for stock, ETF and options orders that incorporates current market information.
One other option that's more recently being offered to Schwab customers is thinkorswim, the trading platform created by TD Ameritrade, which has merged with Schwab.
Schwab also offers clients access to initial public offerings of stock, a feature that not every broker provides. And the platform's extended trading hours — from 7 a.m. to 8 p.m. Eastern — also beat the availability of many competitors.
Do keep in mind that Schwab does receive payment from market makers for routing your orders through them, although the company says that does not affect the value consumers get from using its brokerage services. It is also very transparent and clearly explains its order routing process, overall price improvement statistics and execution quality on its website. Schwab says its execution quality is 96.6%.
The average execution quality of all brokers we review was 97.4% as of Aug. 31, 2023. That means 97.4% of orders sold for at a price that was at or better than the National Best Bid and Offer. Executing at or above the NBBO means you may receive a price improvement or a better share price than you were originally quoted.
Mobile app: 4 out of 5 stars
Schwab offers three mobile apps: Schwab Mobile, StreetSmart Mobile and thinkorswim. It should be noted that while Schwab's mobile app and thinkorswim have decent ratings, the StreetSmart Mobile app lags among user reviews.
Research and data: 5 out of 5 stars
Schwab provides its own equity ratings, along with reports from several top-tier providers. In addition to real-time news and earnings reports, the broker offers a variety of research reports and market commentary authored by in-house experts, as well as a quarterly magazine free of charge.
Schwab’s investment screeners are easy to use and let you save your screens. Select Lists, like the previously mentioned one for ETFs, are compiled by the company’s experts and released quarterly to give you a pre-screened selection of mutual funds and ETFs. The funds on the list are divided by category, so you can easily see the company’s picks for, say, large-cap stock mutual funds.
The company is also integrated with Google Assistant — you can ask Google for stock quotes, general market updates and more — and has an Amazon Alexa skill that provides similar information, including the ability to create and get updates on a watch list.
Customer support options: 4.5 out of 5 stars
Customers have plenty of ways to get in touch. Phone, email and online chat are all available 24/7. If you prefer to speak to someone in person, there are more than 90 Charles Schwab branches around the country, with some even open on Saturdays.
Charles Schwab IRAs
Charles Schwab is a leading broker in the retirement account space, with traditional and Roth IRAs as well as self-employed retirement accounts. IRAs are retirement savings accounts that offer significant tax savings, such as a tax deduction on contributions or tax-free growth of your investments. You can have an IRA in addition to a standard brokerage account.
on Charles Schwab's website
on Charles Schwab's website
$0
per online equity trade
$0
None
no promotion available at this time
Charles Schwab IRA fees
For traditional and Roth IRAs, Charles Schwab does not charge fees for opening or closing an account, maintenance or inactivity. Schwab also does not charge any annual fees.
There are some fees associated with options, futures and foreign stock trades. Also note that Schwab charges a $50 fee for a full transfer out of assets. Jump to Charles Schwab at a glance for more details.
How do we review brokers?
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgments on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating brokers and our process, read our full methodology.
on Charles Schwab's website
