Top features you’ll love
High-quality trading platforms
Schwab offers a pair of trading platforms as well as a mobile app, so you’ll have a means to trade wherever you are.
Schwab.com web trader: The broker’s entry-level platform does plenty. In addition to all the basic features, the platform keeps tabs on major indexes and watchlists, can pull up a company’s financials and trading data, access options chains and analyze trends. If you need even more, you can step up to StreetSmart Edge. The all-in-one trade ticket allows you to make simple stock trades and even complex options trades from one interface.
StreetSmart Edge: This is Schwab’s flagship trading platform, and it shows. The interface is highly customizable, so you can set up the platform to optimize your trading process. You can trawl screeners for trading ideas, while news feeds and live CNBC coverage roll in the corner. The platform also offers advanced charting, and you’ll be able to place complex, multi-leg orders on the all-in-one trade ticket. You can access the platform in both web and desktop versions.
Integration with Amazon Alexa
If you have Amazon’s Alexa virtual assistant, then you can load the Schwab skill. You’ll be able to request market updates and quotes on stocks and funds, as well as organize a watchlist. It’s hard not to see this evolving in the future so that you’d be able to trade and conduct other account tasks via Alexa, too.
Pros: Where Charles Schwab stands out
Research
Schwab is great at providing investors what they need to know, both in terms of research and all the tools the broker offers.
Clients receive earnings news from Reuters, Briefing.com and others, while Schwab also provides market commentary from Morningstar, Credit Suisse, Ned Davis and more. Those investors looking for research on specific stocks will find Schwab’s in-house analytical work, including Schwab Equity Ratings for evaluating a stock’s performance, as well as other third-party reports.
Fund investors can access the Morningstar rating for each mutual fund, while ETF traders can trawl through the offerings efficiently with Schwab’s ETF Screener and ETF Select List (a guide to the broker’s top picks). It’s a quick way to sift the fund universe for what you really want, and the screener helps you find low-cost funds quickly.
Fixed-income traders can pore through more than 30,000 offerings with Schwab BondSource, a screener that includes ratings from Standard & Poor’s and Moody’s.
Trading fees and account types
Schwab charges $0 for stock and ETF trades and $0.65 per contract for options. You could find cheaper options commissions, if you wanted to skimp on some key features such as research, customer support or fee-free funds. But Schwab’s commissions are competitive and more than reasonable for all the value you’re getting. Plus, there’s no account minimum, so it’s incredibly easy to get started.
Schwab also offers nearly any account type you can imagine: Individual, joint, IRAs, education savings accounts, 529 education accounts, business accounts such as the SEP IRA and solo 401(k), as well as trust and charitable accounts, among many others. As your financial needs grow, Schwab is going to be able to accommodate your requirements.
Fee-free funds
Mutual fund investors should be happy with Schwab’s offerings – with more than 7,200 funds available without a sales load. Investors in mutual funds should generally be looking to avoid sales loads, since they’re a dead loss, and Schwab gives you plenty of solid fund choices. But it goes one better, offering more than 4,200 funds with no load and no transaction fee, meaning you’ll buy and sell without a commission. It’s another way that Schwab is so investor-friendly.
Fractional shares
Schwab has added a great feature for newer investors, allowing you to put all your money to work in an investment, even if you can’t afford a full share (which is a real possibility with some high-flying tech stocks.) It’s called Stock Slices, and it lets you buy any stock in the Standard & Poor’s 500, which is an index of America’s five hundred or so largest companies.
You can buy a slice of any of the index’s stocks for as little as $5, and you can buy up to 30 slices in total at a time. For example, if you wanted to buy 10 slices of various stocks, you’d have to have at least $50. But if you want to invest just $25, you could max out at five slices in total or pick just one or two. This program enjoys the broker’s no-commission structure on stock trades, too.
Hopefully, Schwab expands this program to include more than just S&P 500 companies, as do some key competitors such as Fidelity Investments and Interactive Brokers. Besides purchasing fractional shares, you’ll also be able to reinvest dividends in partial shares.
Mobile app
Schwab Mobile provides the core functionality of the broker’s web trader and you’ll be able to securely access your accounts with industry-standard encryption. The app allows you to place trades (including multi-leg options) and monitor your portfolio, access news and real-time market data, check out stock charts and watch CNBC on a livestream. You can deposit checks into your brokerage or Schwab bank accounts, and the app is integrated with Apple Watch, too.
On top of this, you can access many of the app’s functions with voice commands via the virtual assistant. You can trade, check your portfolio, deposit checks and set alerts, among others.
Customer support
It might be a dark and stormy night, but Schwab’s customer support team is going to be open to take your call. Not only does the Schwab team take calls 24 hours a day, seven days a week, it’s also available for live online chats around the clock, too. It’s hard to do better than that.
You can always send an email, or you can stop by one of the more than 300 Schwab branches if you need more personal assistance. This physical presence is an advantage that Schwab has over online-only brokers such as Robinhood or Interactive Brokers.
New account bonus
Schwab offers one of the most competitive bonus structures in the industry. With just a $1,000 deposit you can receive a $100 cash bonus, though you'll need a current Schwab customer to refer you. You can receive even more – up to a $500 bonus with a deposit of $100,000 or more.
Cons: Where Charles Schwab could improve
Transfer out fees
With all the other investor-friendly advantages at Schwab, it feels nitpicky to target the broker's fees for transferring out your account. A partial transfer costs $25, while a full transfer will cost you $50. Although Schwab is generally good about not hitting you up for fees here and there, that's not really the case with transfer fees.
Investment options
Schwab’s investment choices – stocks, ETFs, bonds, mutual funds, futures – will suffice for a great deal of its customers. Those looking for a little extra, such as forex or direct trading in cryptocurrency, will have to turn elsewhere. However, Schwab’s integration of TD Ameritrade, which does offer forex, may bring the inclusion of that asset class. Again, this is nitpicking.
Bottom line
Charles Schwab will do right by investors who need a full-service broker that performs strongly across the board:
- No commissions for stock and ETF trades (and competitive per-contract fees for options) mean investors can get more of their money in the market.
- Accessible customer support, a solid mobile app and fractional shares also assist investors of all experience levels.
- The research and education on offer at Schwab are extensive and come as part of the entire package with no extra charge.
If you’re looking for great research and education, also consider checking out Fidelity Investments and Merrill Edge to compare. If you want more investing choices (including forex and cryptocurrency), look at TD Ameritrade, which Schwab will eventually integrate into its operations. E-Trade is another rival with solid customer service and research that deserves mention here.
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