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Charles Schwab Review 2019: Platform, Fees, Pros and Cons

Last Updated: 09. August 2019
Charles Schwab Review 2019: Platform, Fees, Pros and Cons
5 (100%) 8 vote[s]

Charles Schwab is among the oldest brand names in the brokerage world. It is considered a good choice for online stock brokers and traders at all levels. For advanced users, it seeks to offer the right mix of sophisticated tools. For beginners, it has plenty of learning resources.

As a full-service investment company, it ranks highly in the industry for various reasons which we will discuss in greater detail in the course of this Charles Schwab review. Thanks to its focus on the customer, the service provider offers a wide range of trading options and competitive rates.

But in addition to its numerous highlights, it has its demerits too. Read on to find out everything you need to know before using Charles Schwab.

What is Charles Schwab?

Often considered as the pioneer of the modern-day discount brokerage model, Charles Schwab has been around longer than most. It was founded in 1975 and has its headquarters in San Francisco.

According to the official site, the company exists with the objective of helping “People achieve better financial outcomes.” In order to achieve this, it offers investors a full-service approach to investment, combining the best of what technology and investors have to offer.

As an iconic brand in the industry, it currently boasts over $3.5 million in total client assets. It caters to 11.6 million active brokerage accounts, about 1.7 million participants in retirement plans and 1.3 million in banking accounts.

It came into existence a short while following the deregulation of commission prices. At the time, its key objective was to offer much lower commissions than other players in the industry. Over the years, it has sought to uphold that strategy.

In line with that, it has always consistently slashed fees on ETFs, mutual funds, account fees and lowered base commission to become one of the least expensive options in the industry.

Special Features

The stockbroker’s mantra is “Seeing the world through clients’ eyes.” With that in mind, it prioritizes the delivery of the products and services that the customers want. It also claims to lead rather than follow industry trends.

  • Low Rates and No Account Minimum

For instance, when it slashed base commissions to $4.95, it triggered an industry-wide price reduction. It is also renowned for its $0 Charles Schwab account minimum, robust trading platform, advanced tools, variety of research offerings and affordability.

  • Versatility

Apart from the low Charles Schwab commission, the platform is as good for newbies as it is for active traders. For users who don’t feel overwhelmed by having limitless options, the hundreds of services on the platform cover every base.

  • Wide Range of Services Supported

Being a full-service provider, Charles Schwab broker provides a full suite of services and products. These include:

    • Stock trading
    • Options trading
    • Bonds
    • Futures trading
    • Mutual funds
    • Advisory services
    • DRIPs
    • Retirement and fixed income guidance

Currently, there is no support for Charles Schwab forex trading, and for futures trading, users must conduct trades on its StreetSmart Central platform. This means that users cannot place futures trades on the main website or the StreetSmart Edge platform.

Promotions

There are some offers for various user activities. Consider some:

  • Get up to $500 Charles Schwab bonus with a qualifying deposit
  • Referral award for first-time customers
  • 500 trades commission-free for the first two years with a qualifying deposit of $100,000

Account Minimum

Charles Schwab operates on $0 account minimum for US residents. However, non-US clients have to have a $25,000 account minimum.

Supported Countries

Like in the case of Robinhood and TD Ameritrade, Charles Schwab trading is available internationally for users who want to trade stocks on foreign markets. Currently, it supports trading in over 30 global markets.

In order to access this functionality, users need to sign up for the Schwab Global Account. By doing so, you can be able to access online stocks trading in 12 of the top foreign markets. Each of these will have real-time quotes when trading during market hours.

Some of the countries in which the service is available include:

  • United States
  • United Kingdom
  • Germany
  • United Arab Emirates
  • Singapore
  • Malaysia
  • Australia
  • China
  • Hong Kong
  • India

Languages Supported

At the moment, the site supports English and Chinese, and also offers some documentation in Spanish.

Trading Platforms

At the moment, the Charles Schwab trading platform offers access to three main platforms for its different users. These are:

  • com – a web-based platform that targets everyday investors
  • StreetSmart Edge – a desktop-based platform specifically designed for active traders
  • StreetSmart Central – a web-based platform for Charles Schwab futures trading

Its platforms cover most of the crucial aspects users need and want with one major omission, paper trading. Paper trading is an important feature for beginners as it allows them to trade using virtual funds. However, none of the platforms offer it.

In as far as stock charts are concerned, Charles Schwab offers a good experience though there is still room for improvement. Basic users may find them satisfactory, but for advanced traders, the absence of some technical indicators is a major drawback.

Moreover, though the Edge platform is easy to learn and has most features, it has a reputation for being slow. Thus, a trader wanting to stream multiple stock charts across several monitors may find it challenging.

Fees and Limits

Charles Schwab fees are among the most competitive in the market. Noteworthy too is the fact that the service offers a transparent fee system – what you see is what you get. There are of course a few catches here and there, but overall, Charles Schwab’s cost is friendly.

Let us take a look at some of the key Charles Schwab trading fees and limits:

Feature Fee
Minimum account deposit $0
Per trade stock trade fee $4.95
ETF trade fee $4.95
Options base fee $4.95
Mutual fund trade fee $49.95
Options per contract fee $0.65
Broker assisted trades fee $25
Trades using Schwab automated phone system $5 (fee added to order)
IRA annual fee $0
IRA closure fee $50
Returned ACH fee $25
Returned wire fee $25
Stock certificate processing fee $100
Domestic wire fee $25
International wire fee $25
Paper statement fee $0
Paper confirmation fee $0

Note that even though for the transaction fee mutual funds, the Charles Schwab cost is $49.95, the charge only applies for the initial purchase. There will be no additional charge for selling.

When it comes to trading fees and commissions, the miscellaneous account fees on the platform are transparent and competitively priced. They are in fact among the lowest compared to other online discount brokers.

There are no Charles Schwab fees for penny stocks. Moreover, there are no Charles Schwab withdrawal fees.

Margin Rates

Margin Balance Interest Rate
Less than $25,000 9.575%
$25,000 – $49,999 9.075%
$50,000 – $99,999 8.125%
$100,000 – $249,999 8.075%
$250,000 – $499,999 7.825%
$500,000 – $999,999,999 6.575%
More than $1,000,000 6.25%

From the above chart, it is evident that Charles Schwab margin rates are relatively higher than those of most online discount brokers.

Mininum Deposit and Maximum Withdrawals

There are no minimum deposits or maximum withdrawals on Charles Schwab.

Account Types

There are currently five types of accounts on the platform. They include:

  • The Charles Schwab stock broker account
  • Retirement account – these include the Traditional IRA, ROTH IRA and Rollover IRA
  • Automated and managed portfolios – these are the Schwab Intelligent Portfolios and the Schwab Intelligent Portfolios Premium
  • Estate and charitable planning – choose between a Trust account and a Schwab charitable account
  • Banking – this is the High-Yield Investor Checking account which is linked to users’ brokerage accounts

How to Sign up on Charles Schwab

Charles Schwab sign up is straightforward and can be done on phone on the Charles Schwab app, online or in any one of the physical branches. Here are the steps you need to follow to get a Charles Schwab account:

  1. Open your account

Firstly click here to open your account. On the top right side of the home page, click “Open an Account”

2. Choose your account type

You will then have to choose the account you want to open from the list that appears then click “Continue”. Select whether it’s an individual or joint account and once again click “Continue”

You will get a list of the things you need which include a US permanent address, Social Security Number or Tax Identification Number and if applicable, your employer’s name and mailing address. At this point, you will also be asked if you already have Charles Schwab login ID or if you need to create one. Choose the relevant option.

3. Fill in your personal details

Next, you will get a form which you need to fill out with personal information

4. Select your account features

Once you are done, click “Next” then select the desired account features. Accept the terms and conditions then specify your funding method

5. Fund your account

After you complete the application process, you can fund your account and start investing. There are no minimum account deposits but if you deposit $10,000, you’ll get $100 cash bonus.

How to Buy and Sell Stocks on Charles Schwab

To start trading Charles Schwab stocks, you first need a Charles Schwab brokerage account. If you do not already have it, create one by following the steps for account creation. Once the account has been approved, you need to fund it.

Next, you can use the Charles Schwab mobile app or go to schwab.com to start placing trades online. Alternatively, you can use the StreetSmart Edge platform to buy and sell stocks.

Here are the steps for trading stocks:

1. Choose an execution method

You will be able to choose whether to execute your order on phone, mobile app or online.

2. Log in to your brokerage account

3. Select the stock you want to buy

Click on the stock or type in the name of the security to get a live quote

4. Click on “Trade”

You will then have to click on “Trade” or “Trade Multiple Stocks”

Then, simply enter the desired information then click “Sell/Buy”

4. Review Your Trade and Place your Order

Then click on “Review Trade” before placing the order. When satisfied, click on “Place Order”.

How to Configure Your Trading Account

In configuring your trading account, you will need to add the specific features you require from the type of account you choose.

  • Margin and Options Trading

You can add options trading and margin trading by checking the relevant boxes. However, note that these are best used by seasoned traders.

  • Funding Options

You will also need to select how to fund the account. Options include bank transfer or transfer from another brokerage account.

How to Withdraw Funds

To withdraw funds from your account, here are the steps to follow:

  • Log in to your account
  • Click “Transfers & Payments”
  • Select your withdrawal method of choice
  • Enter your account in the “Transfer From” tab
  • Enter the account you want to withdraw in “Transfer to”
  • Enter the amount
  • Initiate your withdrawal

Safety and Regulation

For security purposes, the account offers 2FA. During initial login, you need to register the device. You will get a code via phone, email or text. From here on, you will only need your login ID and password to access the account.

Schwab is subject to FDIC and SIPC, both of which protect funds from unauthorized access. It limits the number of employees who can access any individual client’s information.

The platform is also regulated under the SEC and the FCA. Therefore, if you are wondering ‘is Charles Schwab safe?’ well, it has the security of regulatory oversight. But it does not have negative balance protection.

Education, Research and Data

Charles Schwab research and education is highly in-depth and comprehensive. In fact, it provides one of the highest quality in-house research studies prepared by staff experts. Consider some of the market research experience it covers:

  • Stocks – research and screener
  • ETFs – research and screener
  • Mutual funds – research and screener
  • Pink sheets/OTCBB – research
  • Fixed income – research
  • Bonds – research

In Charles Schwab stocks research, it goes beyond conventional third-party ratings, using its own proprietary equity ratings to add value to the experience. It offers live streaming events as well as market commentary and daily broadcasts. However, its research design is intuitive in spite of providing a comprehensive feature offering.

Under the Charles Schwab ETF, offerings from third-party providers such as Morningstar cover virtually every important aspect. Similarly, the Charles Schwab mutual fund research base has lots to offer courtesy of Morningstar.

Customer Service

Like other trusted platforms such as Firsttrade, Charles Schwab customer service is reliable. In fact, the company has over 340 branches in 46 states across the United States. This means that account holders can access in-person help when necessary, a unique provision that only a handful of discount brokers offer.

Moreover, the service provider has excellent customer support on phone, available 24/7. Note that clients who have more than $500,000 in their Charles Schwab account qualify for Premier Support, as do those who trade over 36 times annually. They thus get a direct connection to customer care reps when they place calls.

Those who do not qualify for the package may have to wait on hold whenever they make calls. The company’s chat support is also good and is a convenient way to get immediate assistance on your Charles Schwab complaints and problems. Overall, the customer support team is professional and informed.

For users who would like to get complete account management, the company offers Schwa Intelligent Portfolios, a robo-advisor. And thanks to their acquisition of OptionsXpress in 2011, users can also get enhanced services in portfolio managing and stock loans.

However, their email support is not as good as phone support and users consistently report a poor experience.

Charles Schwab vs. Fidelity

Just like Charles Schwab, Fidelity is a veteran discount brokerage firm. Both charge $4.95 commissions but Fidelity is more suited to the advanced trader while Schwab caters to both newbies and pros.

Schwab also has an advantage in the sense that it offers access to more international markets than Fidelity and also offers futures trading, which is not available on Fidelity. On the other hand, Fidelity’s trading platform, Active Trader Pro is more efficient when it comes to speed and performance.

Overall, the two are tough competitors, with each one offering distinct benefits for different target groups.

Charles Schwab Pros and Cons

Pros

  • Low commissions
  • Zero account minimums
  • Beginners can learn the ropes using the simple yet robust StreetSmart platform
  • Expert traders can access sophisticated features on the advanced StreetSmart Edge platform
  • Plenty of robust research options from Schwab as well as third parties like Market Edge and Morningstar
  • 24/7 customer support on phone or via online chat
  • Over 340 brick and mortar branches in 46 US states for in-person assistance
  • Vast selection of commission-free trading options
  • Traders can use robo-advisor for automated investing at no fee
  • Access to an account via multiple platforms, desktop, mobile and web-based
  • Users can bank with Schwab and link their bank and brokerage accounts

Cons

  • Though you can use Schwab robo-advisor for free, it requires a minimum opening deposit of $5,000, which is much higher than what competitors offer
  • Buying a transaction-fee fund comes at a hefty commission at $49.95 per purchase
  • Poor customer support on email
  • The platform’s primary mobile app does not offer real-time streaming quotes
  • Margin rates are comparatively higher
  • Certain features are split between platforms
  • The company pushes users towards getting a financial advisor
  • High trade commissions

Final Thoughts

In answer to one of the most popularly asked questions, ‘Is Charles Schwab good?’ or ‘Is Charles Schwab reliable?’ the answer is yes. But like any other discount brokerage platform, it has its strengths and weaknesses. Among its top highlights are the low Charles Schwab account fee and $0 minimum balance. It is a versatile choice for beginners and pros alike and has extensive research facilities.

The platform also has a wide selection of trading options with different platforms for various users. In spite of the fact that some of its features are below par and some trading options are costly, it is overall a good platform, as the Charles Schwab rating reveals.

FAQs

How can I manage my own investments on Schwab?

You can do so by taking advantage of the extensive research, online tools, insights, education and customer support features on the site.

What are the benefits of banking with Schwab?

Banking with Schwab does not attract any ATM, account minimum or transaction fees and you can use Charles Schwab mobile to access banking features on the go.

Is Charles Schwab regulated?

Yes. Charles Schwab is currently regulated by the US SEC and the UK FCA.

Is Charles Schwab legit?

Charles Schwab is a legit discount brokerage company with years of experience and a reliable track record of performance. Therefore, in answer to the question ‘can you trust Charles Schwab?’ the answer is yes. The firm has not given any reason for lack of trust.

What are stocks?

Stocks represent shares in the ownership of companies, including their assets and earnings. Therefore, if you hold stocks in a company, you are a partial owner.

Views expressed are those of the writers only. Past performance is no guarantee of future results. Trading comes with severe risk. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
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Nica is a BA Political Science degree holder who fell in love with writing after college. She specializes in financial technology and cryptocurrency. At her young age, she was already able to work with founders who graduated from Harvard, tech startups funded by Y-Combinator, CEOs of multi-million dollar blockchain companies, investment companies in London and many more.

10 Comments

  1. Hello, I am from Canada and I really think that investing through Charles Schwab will help me a lot. I’m just not sure that Charles Schwab operates in Canada. Can you please let me know if it does?
    • Hello Rog, we highly appreciate your question and would like to inform you that Charles Schwab does operate in Canada. We would highly recommend you to get started on it as it is one of the best brokerages in the world.
  2. Charles Schwab is one of the most popular and prestigious stock brokers I have ever heard of. I don’t know about any other investing platforms that are trusty and legit either. Do you think I should start my trading activity from Charles Schwab?
    • Hello Jones, you are right, Charles Schwab is one of the most popular and prestigious stock brokers out there. While this platform works great for both beginners and experts, you should know that a lot of beginners do feel a bit overwhelmed when starting on Charles Schwab due to all the complex reports and tools.
  3. I have been using a number of stockbrokers and trading platforms for a long time now. Now I want to start making serious investments and make large profits. Is Charles Schwab the right platform for me to do so? If yes, why?
    • Hello Martha, we would highly recommend you to get started on Charles Schwab. The main reason for that is that Charles Schwab charges a smaller percentage as trading charges for large transactions and it features a large variety of advanced tools and reports that an experienced trader can take advantage of.
  4. Can I do some serious options trading and buy bonds from Charles Schwab? I would hate to use two different platforms for them.
    • Hello Asus, we highly appreciate your query. Lucky for you, Charles Schwab does deal in options trading as well as bonds. So, it would be a great platform for you to trade bonds and options.
  5. What are the payment options available to deposit money to my account in Charles Schwab? Can I do Credit Card and PayPal both?
    • Hello Warren, we highly appreciate your question and would like to inform you that Charles Schwab offers a variety of ways you can use to fund your account on the platform. You can also deposit funds via PayPal by choosing the “I have a different bank” option under the “Link a bank” tab in payments setting menu.

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