Schwab® Review 2019

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Bottom line in a sentence

Charles Schwab offers a robust and cost-effective platform that truly has something for everyone, from a wide array of commission-free funds to deep research to rich educational resources.

Schwab at a glance

Star Rating

  • Affordablity: 5 of 5
  • Usability: 5 of 5
  • Tools & Research: 5 of 5
  • Mobile: 4 of 5
  • Scalability: 5 of 5
  • Minimum Balance:
  • Cost per stock trade:
  • Cost per options trade:
    $4.95, $0.65 per contract
  • Commission-free mutual funds or ETFs:
    More than 5,000 commission-free mutual funds and more than 200 commission-free ETFs
  • Customer service:
    24/7 phone support, online chat support and in-person service at 300 branches nationwide.
  • Inactivity fee:
    There is no inactivity fee.
  • Mobile app:
    Schwab offers the “Schwab Mobile” app on the Apple App Store and Google Play Store.
  • Annual fees:
    There are no annual fees. However, there is a fee of up to $50 for account closing or transfer.
  • How long to withdraw:
    The first online transfer takes 5 business days. Every transfer thereafter takes 1-2 business days. Wire transfers are completed the same day as they are requested if they occur before the daily cutoff time.
  • SIPC insured:
    Yes, Schwab brokerage accounts are protected by the SIPC (up to $500,000 of protection for brokerage accounts with a limit of $250,000 for uninvested cash).
  • Best for:
    Investors who want to get serious but need help getting started

What Charles Schwab is

You may have seen the "Talk to Chuck" ad campaign from Charles Schwab and wondered who the heck the firm's namesake founder is. Well, in a nutshell, Schwab is a longtime advocate of small-time investors who has fought on their behalf for better service at lower prices.

Back in the 1970s, Schwab advocated a radical new concept of slashing fees and paying his employees based on their workload – not commissions from products they sell to customers who may not even need them. It sounds an obvious business model now, and the appeal is one reason Charles Schwab & Co. grew from one Sacramento office to a global investing powerhouse, but few firms in that time were eager to give up their juicy fees at the time.

The populist and low-cost philosophy shines through even today in the company's online brokerage platform, which offers some of the lowest per-transaction fees out there without shortchanging investors on either customer service or the quality of research and educational resources.

What Charles Schwab costs

While there are a few ways to get cheaper commissions out there based on your specific habits or other perks, Schwab is among the most affordable platforms for the typical investor.

Standard pricing for stock trades is $4.95 and options are $4.95 plus an additional $0.65 per contract. When it comes to the competition, that's at the low end of all pricing models across online brokers.

Above and beyond that is a list of 200+ commission-free ETFs that are available to all account holders, and can drive costs even lower. The details of those ETFs make them even more attractive, as Schwab doesn't charge redemption fees for swing trading (other brokers can charge as much as $19.99 if you sell within 30 days after buying a commission-free fund). The suite of ETFs is also high quality and not peopled with niche funds or duplicates, spanning 15 different fund families including SPDR, Powershares and Pimco in addition to its in-house Schwab offerings.

Oh, and lest you think Schwab is aggressively pushing people to its products for no reason, keep in mind it undercuts even low-cost leader Vanguard on these ETFs. Consider its Schwab U.S. Large-Cap ETF (SCHX), an index fund that holds 760 of the biggest U.S. corporations like Apple (AAPL) and Walmart (WMT). This diversified ETF charges measly 0.03% annually in expenses – just $3 a year on every $10,000 invested. That's literally the cheapest fee structure for a large cap fund that I know of!

Whether you're a buy-and-hold investor looking for funds or a more active trader looking to make tactical bets, Schwab is flexible and affordable.

What Charles Schwab offers

Some discount brokers offer a tough choice. Do you want to keep your cost structure really low, or do you want a powerful platform with great research that is easy to understand and use?

Schwab doesn't make you pick one, however. Despite its incredibly affordable commissions, it also offers some of the best research and most user-friendly tools out there.

Quick comparison of Brokerage options:
Brokerage Overall Rating Avg. Cost Per Trade Usability Rating
charles-schwab logo
$4.95 5 of 5
vanguard logo Read Our Review
$7 3 of 5
td-ameritrade logo Read Our Review
$6.95 5 of 5

Just a few features of note include:

  • Schwab Ratings: One of the most important things for serious investors is a tool that allows new ideas to bubble up. Schwab prominently offers just such a tool in its Schwab Ratings, where in-house analysts dig into stocks and offer their opinions – and then provide a list of their recommendations that is sortable by fields like sector or market cap. And if you don't want to take Schwab's word for it? With one click you can compare other ratings from analysts including Argus, Credit Suisse and Reuters. Then with another click, you can access a PDF of an in-depth research report that explains the reason for those ratings in detail. This is a powerful and accessible way to find new ideas and then do your own due diligence before placing a buy order.
    "Looking for a new trading idea? Schwab offers a way to screen stocks by analyst ratings, including its own, to surface stocks that the so-called "smart money" is bullish on."
  • Side-by-Side Comparisons: Of course, if you think you're smarter than the average Wall Street analyst, you don't put much import on ratings. Thankfully, Schwab also offers a flexible tool to compare stocks and make your own assessment. While many of these tools offer shallow metrics that don't matter much, such as today's price or the market value of a given stock, Schwab allows for easy comparisons between metrics like profit margin, earnings per share trends and even more granular items like revenue per employee. And as with Schwab ratings, if you want to dig even deeper you just click what matters and can access more in-depth data. If you want a gut check between stocks, this is a quick and easy way to get one.
    "Not interested in the vanilla comparison of stocks via metrics like current price or market value? Simply close the "summary view" and scroll down to "fundamentals" and "earnings" to get what you’re really interested in."
  • Robust and User-Friendly Screeners: What if you don't have specific stocks in mind yet and simply want to generate ideas? Schwab's screener has you covered, with a user-friendly interface that is incredibly intuitive. Don't think that means it's low rent, however, as its granular categories allow you to slice minute slivers of the market. The ETF "Fund Finder" I used was in Beta testing, but proved to be equally powerful, offering up asset flavors far beyond simply "stocks" or "bonds" to include categories like "bear market" ETFs that you don't normally see on fund screeners.
    "With a powerful screener tool, you have access to many metrics other platforms don't offer – including whether a stock is optionable, and by ub-industry groups. This can really narrow your focus to find what you're looking for."
  • Education and Flexibility: The scope of Schwab's investing offerings is wide, but it doesn't stop there. The company also offers a wide array of products, including bonds and CDs that are easy to research and access if you truly want a holistic approach to your finances. And if you're wondering what element you may be missing, the educational resources are great. Whether you watch a basic primer video like "Understanding ETFs" or whether you want details on sophisticated concepts like options, Schwab makes it easy to find what you're looking for and easy to understand these investment vehicles when you get there.

What Charles Schwab lacks

It's really hard to find a fatal flaw with Schwab, because it does so many different things well. However, one area of frustration came from technological hiccups.

For instance, Schwab offers some next-level tools for active traders that run on Java and weren't native to my laptop's browsers, Chrome or by Microsoft Edge. You can install a plugin or download a different version like Firefox that is supported, but Schwab simply should have used a different protocol than Java if it cared about making these tools accessible.

Also, these pro-level tools -- Level II and StreetSmart Edge among them – are out of reach for most customers as they demand 120 or more trades in a year, or $1 million in Schwab balances lest you pay a maintenance fee. Given the high quality research that's native to the standard platform and first-time investors, that seems like a major hurdle to get over before you can upgrade.

Similarly, it was a bit clunky to use Schwab's mobile interface with charts that try to do too much on a small screen.

All in all, however, these are minor problems. The vast majority of investors looking to do real research on a desktop via standard tools and just look for updates or on-the-go trading via mobile will be more than satisfied.

Charles Schwab is best for...

Schwab is quite honestly a great platform for anyone and everyone.

If you're a new investor, there's plenty of educational resources to tap and a very user-friendly interface that puts common destinations prominently in the top level navigation. But if you're a seasoned trader, there is a great archive of research reports and screening tools to find new ideas.

If you want to actively trade, the standard cost structure is among the best out there for both stocks and options. But if you just want to own funds, the huge list of commission-free ETFs and low-expense ratio Schwab offerings make this platform as cost effective as Vanguard and other low-cost shops.

In many ways, this flexibility is the biggest selling point of all. As you grow and evolve as an investor, either through education or simply because your life situation changes, Schwab is very well equipped to grow and evolve with you.