Charles Schwab Review [2024]: Low Fees, Great Tools

What is Charles Schwab?

Charles Schwab is a U.S. financial institution offering commission-free stock trades, a wide variety of investing and banking account options, top-of-the-line stock research tools, and access to a solid range of asset classes beyond stocks and bonds (such as futures and options).

TD Ameritrade acquisition

Schwab acquired TD Ameritrade in 2020 for about $26 billion, but the full transition has been years in the making. TD Ameritrade turned over an estimated 12 million accounts in the acquisition, and former TD Ameritrade customers can now access their investments through Charles Schwab.

The thinkorswim trading platform, well-loved by TD Ameritrade investors, is now included in Schwab’s technology. However, users have recently been leaving complaints about the new version of the mobile app. One reviewer even said the following: “Before moving to Schwab, orders went through no problem. Constant order slippage and randomly freezing, requiring app to be closed and reopened. Immediately noticed difference when Schwab took over.”

How does Charles Schwab work?

Schwab offers both tax-advantaged and taxable brokerage accounts with no minimum opening deposit, no ongoing maintenance fees, and no commissions on stock trades. The low cost of investing with Schwab is one of the biggest reasons I signed up with the company.

You also don’t have to pay fees for withdrawals, and there aren’t any restrictions on how much money you can invest. This makes Schwab an easier — and cheaper — choice if you’re used to paying extra money toward brokerage fees.

Asset classes

Schwab offers just about every type of asset class:

• Stocks (including fractional shares for as little as $5 with Schwab Stock Slices)
• Exchange-traded funds (ETFs)
• Mutual funds
• Index funds
• Money market funds
• Bonds
• Bond funds and bond ETFs
• U.S. Treasury Bills
• Certificates of deposit (CDs)
• Options
• Futures
• Forex
• Cryptocurrency (via ETF, coin trust, futures, and industry stocks; no coin spot-trading)

Schwab’s acquisition of TD Ameritrade added forex and crypto to the mix, which were missing from Schwab’s offering before. Although you can’t trade individual crypto coins directly, like you can with Fidelity, Schwab’s access to crypto ETFs and coin futures gives it an advantage over Vanguard, which offers no crypto options. Schwab offers over 2,000 ETFs, including more than 25 low-cost ETFs, to choose from.

Investment accounts

Schwab has a long list of account options, including:

• Taxable brokerage accounts
• Robo-advisor accounts (called Schwab Intelligent Portfolios)
• Traditional IRAs
• Roth IRAs
• Custodial IRAs
• SEP and SIMPLE IRAs
• Rollover IRAs
• Inherited IRAs
• Individual 401(k)s
• 529 accounts
• Education Savings Accounts (ESAs)
• Custodial accounts (UGMA/UTMAs)
• Charitable giving
• Joint accounts
• Trust accounts

Schwab IRAs and retirement accounts have no opening balance requirements or maintenance fees.

Brokerage accounts

Schwab offers brokerage and trading accounts, including your typical taxable brokerage account, with no fees for stock trading and access to cutting-edge research and screening tools and platforms (like thinkorswim). If you want a broker to place trades for you, you can have Schwab do that for a $25 fee per trade, but I like that you get access to all of those research options and no commission when you DIY your trades online.

If you prefer a robo-advisor, Schwab offers its Intelligent Portfolios options, but you’ll need at least $5,000 to get started. This is a much higher minimum than you’ll usually see with robo-advisors. Betterment, for example, has a $10 minimum.

Joint and trust accounts

Many brokerage accounts at Schwab are available as an individual account or as a joint account, meaning you own it together with someone else. Which type of joint account you choose depends on how you want ownership to transfer after your death:

• Joint tenant with rights of survivorship: Your share of the brokerage account passes to surviving owners upon your death.
• Tenants in common: Your share of the brokerage account passes to your estate upon your death.
• Community property: A brokerage account for a married couple where each spouse has half an interest in the account’s assets. Your share of the account passes to your estate upon your death. This type of account is only available in certain states.

Schwab also offers trust accounts. These are a great way to protect your assets and ensure they’re transferred to your chosen beneficiary after your death.

Low or no fees

Charles Schwab generally has low or no trading fees. Although it doesn’t offer completely free trading, its brokerage accounts are generally commission-free. This includes no commission or transaction fees for stock and ETF trades.

Note that this zero-commission structure doesn’t include online futures and futures options. You can also expect a $25 service charge for broker-assisted online trades, options, and mutual fund transactions. Expect some fees if you venture into different Schwab-managed portfolios.

The full Schwab pricing schedule is available online, but here’s the breakdown of some of the primary fees:

How to invest

Schwab provides these trading platforms for its investors to trade stocks and other securities:

• Thinkorswim: Thinkorswim is a powerful trading platform that offers advanced trading tools that let you test strategies, trade securities, monitor trends, and analyze data. It also gives you access to real traders who can answer questions or chat about trades.
• Website: Logging in to Schwab allows you to research new investment opportunities, compare up to five products at a time against expert ratings, and filter through your options using custom criteria. You can also try predefined stock screeners, which are different ways to find stocks based on metrics such as “dividend growth” or “small cap growth,” or create your own.

What else can you do with Charles Schwab?

Beyond investing, Schwab also offers banking services, home loans (through a partnership with Rocket Mortgage), and credit cards.

• Schwab Bank Investor Checking: You’ll need a linked brokerage account, but this checking account has no maintenance or activity fees and no account minimums. Your checking account balance also earns 0.45% (as of 06/26/24) APY. The debit card has no foreign transaction fees and provides unlimited ATM fee rebates worldwide, which makes it an excellent choice if you’re looking to pay no international ATM fees.
• Schwab Bank Investor Savings account: This account has no monthly service fees or account minimums. It stands out from other savings accounts for offering an ATM card and unlimited ATM fee rebates worldwide. But it earns 0.48% (as of 06/26/24) APY, which is incredibly low compared to the best high-yield savings accounts.
• CDs: Schwab has a handful of CDs with really competitive rates and maturities ranging from three months to two years. However, these rates and terms change more often than they would with a typical bank or credit union, though they’re often competitive.
• Credit cards: In partnership with American Express, Charles Schwab offers these credit cards: American Express Platinum Card^® for Schwab and Schwab Investor Card^® from American Express.

However, Schwab eliminated its cash sweep options for both new and existing accounts, which means your uninvested cash might not earn anything if you don’t take steps to move it.

Who Charles Schwab is best for

• Beginner investors who want educational tools and practice
• Serious day traders who want access to charts, data, and research
• Parents looking for custodial accounts

As a discount online broker, Schwab is great for beginner investors who are still learning how to invest money. The platform is massive and established, and it includes more resources than many brokerages set up primarily for passive investing. But thanks to research tools like the thinkorswim platform, Schwab is also a very strong option for experienced, self-directed investors and traders who want to avoid fees for frequent trades. It also offers paper trading, which lets you experiment with different investments using fake money in a simulated market. Not all brokerages allow this.

Schwab provides multiple ways to save money for a child’s future. For example, you can open a custodial investment account on your child’s behalf and fund it with a gift, then use those funds to help them trade securities or learn about investing. I used Schwab to help my teen open a custodial IRA, which they funded with money earned from a part-time job. Once they turned 18, Schwab made it easy for me to turn over responsibility for the account to my kid. I was very happy with the customer service for Schwab’s custodial IRA, and I plan to help my second teen open one, as well.

Alternatives to Charles Schwab

If Charles Schwab isn’t the right fit, consider these other options:

• Fidelity: Fidelity is another traditional brokerage, like Schwab, offering a variety of investment accounts and asset classes to choose from. Fidelity offers more ways to invest in crypto and more favorable cash positions than Schwab, which could be a plus if that’s something you’re looking for. Learn more in our Fidelity review.
• Vanguard: Another distinguished, traditional brokerage alternative to Schwab is Vanguard, which I love for its index and ETFs. That said, Vanguard offers no crypto options, and many of its fund options have high minimum investments. Plus, Schwab’s trading tools and platforms are just stronger and easier to use than Vanguard’s, making it a better pick for more active investors.
• Robinhood: Robinhood is an investment app that active traders may find appealing.¹ You might choose Robinhood over Schwab if you want to test how investing works with small amounts of cash. It’s free to get started with Robinhood and you can invest in stocks, options, and ETFs with as little as $1. You can also buy and sell cryptocurrency such as bitcoin, ethereum, litecoin, and dogecoin without any commission fees (compared with crypto exchanges that charge up to 1% in fees). Learn more in our Robinhood review.

FAQs

Bottom line

Charles Schwab is an established and trusted discount brokerage that makes sense for both beginner and experienced investors. It has low fees and stands out for its range of assets, accounts, and tools.

It’s one of the best brokerage accounts for almost any investor who wants access to research and the option to make fast trades.

Get $3-$300 in Free Stock

4.4

FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

Public Benefits

• Get $3-$300 in free stock when your account is approved*
• Invest in 1000s of stocks and ETFs with fractional shares—no account minimums
• Follow friends in a social feed and learn from a diverse community of investors
• * Free stock offer valid for U.S. residents 18+. Subject to account approval.

4.4

FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

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