Charles Schwab Review: Does It Meet Your Investment Needs?

GOBankingRates Score

Charles Schwab Bank

4.7

SCORE

GOBankingRates Best Banks 2023 scores and rankings are objectively determined by our research/editorial team. Our scoring formula weighs several factors that differ from category to category depending on what consumers want from varying products and banks.

Our Take: With Charles Schwab, investment is affordable and accessible to everyone. The company has a long history as a discount stockbroker. Charles Schwab offers low to no commissions, an almost overwhelming array of investment options and customer service levels ranging from hands-off to hand-holding for investors at every experience level. Learn more in this Charles Schwab review.

• Tools and Research
  4.8
• Investing Options
  4.9
• Ease of Use
  4.5
• Fees
  4.7

How did we calculate this?

Pros and Cons

For a quick overview on Charles Schwab, take a look at the benefits and drawbacks.

About Charles Schwab

There is, in fact, a real Charles Schwab, although he went by Chuck when he linked up with two partners in 1963 to launch the Investment Indicator newsletter. In 1971, they incorporated as First Commander Corporation, a company that handled the newsletters and also conducted a broker-dealer securities business.

Schwab bought out the company the following year, and when the SEC deregulated the securities business in 1975, he transformed it into the discount brokerage that it still is today, albeit with a lot of high-tech changes. Bank of America bought the company for $55 million in 1983, and it recorded its one-millionth client account two years later.

Today, Charles Schwab offers comprehensive investment services via a robust online trading platform, as well as brick-and-mortar locations. You could visit a different Charles Schwab branch every day for a full year and still not see them all. This stockbroker has $314.8 billion enrolled in advisor solutions. Schwab recently merged with TD Ameritrade to create a full-service, low-cost brokerage like no other.

Charles Schwab Features

This Charles Schwab review is packed with useful information, but the table below summarizes the most important facts and figures. It tells you what you need to know about the costs to open an account and invest your money, as well as support and current Charles Schwab promotions.

Trading Technology

While it’s not quite as exciting as being on the trading floor on Wall Street, Charles Schwab has a pretty slick online trading platform. If you’re not sure it’s right for you, its website has a demo that’s the next best thing to “try before you buy.” The platform lets you follow the market, research your options and enter orders when you’re ready to take the plunge.

It also summarizes your trade history to quickly let you know your portfolio’s performance over time. Support is just a phone call or a click away, no matter the time of day or night, so night owl traders get as much help as those who work within the market’s hours.

Usability

The Charles Schwab website is built around usability and offers full service and personal support if you ever feel lost. The chat pops up while you’re on the website, so help is always at your fingertips. This is a natural outgrowth of the company’s commitment to customer service that dates back to long before websites and apps were even in the public’s imagination.

In 1982, it started providing a quote and order-entry service 24 hours a day, seven days a week, rather than sticking to the stock market’s schedule like its competitors. That support is now available online and offline.

Mobile and Emerging Tech

Charles Schwab has apps available for both Android and Apple mobile devices. The apps allow trading, tracking and depositing checks and gives access to research, news and charts for stocks, mutual funds and ETFs. The research element does not require a login.

Range of Offerings and Investment Selection

Charles Schwab has something for everyone, whether you identify as a wolf of Wall Street or have no idea what to do with your funds. The company’s well-rounded range of investment options includes:

Charles Schwab Investment Options

• Thousands of no-load, no-transaction-fee mutual funds
• Over 2,000 commission-free ETFs
• Money market funds
• Stocks
• International stocks from over 35 countries
• Futures
• Options
• Margin loans
• Bonds and fixed-income products
• Annuities
• Bitcoin futures
• Cryptocurrency coin trusts

If you’re confident in your money management skills, pay just $0 for online equity trades, and enjoy a range of low- and no-commission products. Options cost $0.65 per contract, while there’s no online ETF commission. Charles Schwab also gives you access to in-depth research to help you make your decisions.

If you don’t want to deal with that kind of pressure, Charles Schwab offers robo-advisors that expertly craft a diversified portfolio of ETFs for you. Robo-advisors never sleep; they’re always on the job, monitoring and rebalancing your investments. If you don’t want to put all of your confidence in automation, add a premium service that includes unlimited 1:1 assistance from a certified financial planner.

News and Research

In 2002, Charles Schwab bucked the industry trend of only providing “buy” recommendations. Instead, Schwab Equity Ratings objectively ranked 3,000 stocks, providing recommendations on both the buy and sell sides.

Today, Charles Schwab currently provides market research from a variety of sources, including Argus, Credit Suisse, Market Edge, Morningstar and Ned Davis. Its news sources include Briefing.com and Reuters. While this information is only available to clients, prospective Charles Schwab customers can view reports on the company website.

If you’re looking for something a little more basic, Charles Schwab hosts financial education webinars available to both Charles Schwab customers and noncustomers on a variety of topics.

Portfolio Analysis and Reports

Charles Schwab provides a variety of ways in which to evaluate your portfolio. Schwab Portfolio Checkup shows you the overall performance, risk-and-return analysis and individual account and asset class performance. It also allows you to view your returns as compared to a benchmark. Prospective Charles Schwab customers can review sample reports on the Charles Schwab website.

Customer Service

If you’re all about the human touch, Schwab has financial consultants who work with you. You can visit them in person at one of more than 400 branches, over the phone or even in a video chat. The website has a handy branch locator to see if you have one nearby.

While no brokerage, Charles Schwab included, guarantees that you’ll make money, the company does give you an accountability guarantee. This guarantee, which started in 2013, pledges to refund your service fee from the prior quarter if the client is not happy with one of its participating investment advisory services. It’s a small but nice touch.

Charles Schwab can help you invest even if you’re not a customer. It holds a wide variety of workshops on topics like, “7 Fundamentals You Need for Investing Success” and “Getting Retirement Ready” that are open to everyone, regardless of whether you have a Schwab account or ever plan to get one.

Security

If you’ve ever heard horror stories of online criminals draining victims’ bank accounts, you’ll feel better knowing that Charles Schwab pays extra attention to account security. It uses multilayer technology and other controls that help keep your funds safe.

Its website also has customer-facing educational materials to help you be proactive in protecting your money. Reassurances are nice, but Schwab backs that up with the Schwab Security Guarantee, a promise to cover 100% of any losses in any of your Schwab accounts due to unauthorized activity.

Types of Accounts

It only takes about 10 minutes to open any of the following accounts online. None of these accounts have associated fees. The account minimum, if applicable, is listed for each:

Charles Schwab Fees

The following table breaks down the commission costs for stock trades and ETFs for each of the three methods you might use:

The table below lays out the mutual fund transaction fee per executed trade for online trades, automated phone trades and for using broker assistance.

The table below lists the commission costs for options trades by all transaction methods.

The table below breaks down what you’ll pay when you trade futures online or with broker assistance.

The table below explains the transaction fees and commissions on trades for fixed-income investment strategies:

Who Is Schwab Best For?

Charles Schwab is best for investors for whom the following items are most important:

• Range of Offerings and Investment Selection: The combination of offerings, extensive research, access to financial consultants and robo-advisors means that Charles Schwab can fill the bill for virtually any investor. Experienced? No problem — dive right in, thumb through the research and make your choices. Have questions? Sift through the options with a financial consultant. Don’t want to do anything but put in your money and watch its performance? Charles Schwab robo-advisors will handle it.
• Customer Service: If you’re all about the human touch, Schwab has financial consultants who work with you. You can visit them in person at one of more than 400 branches, over the phone or even in a video chat. The website has a handy branch locator to help you find an office near you.

The accountability guarantee underscores Charles Schwab’s commitment to customer service, even though it’s only a fee refund.

Disadvantages

Charles Schwab falls short of other brokers in some areas. Those weaknesses are detailed below:

• Usability: Sometimes Charles Schwab can be too much of a good thing, especially for new investors who are easily overwhelmed. Its website offers a dizzying array of information. Even with the many help options, it may scare away people who aren’t familiar with investing or those who aren’t used to navigating websites with so many options.
• Mobile and Emerging Tech: A robust app and robo-advisors appeal to many investors, but some may be distrustful of these tools and may miss the fact that they can get personal service, too, because of the information overload on the Charles Schwab website.

How Does Charles Schwab Compare With Other Brokers?

See how Charles Schwab compares to competitors E-Trade and Fidelity in the following chart. This quick comparison will help you decide which one works best for you.

Charles Schwab vs. E-Trade

Charles Schwab and E-Trade both have robust trading platforms. Charles Schwab provides more services with access to financial planners and branches. If you had to choose between the two powerhouses, you can’t go wrong. Charles Schwab would be best for newer investors in search of more guidance or interested in trading in fractional shares, which are not available through E-Trade at this time. E-Trade would be best for more experienced traders who embrace Power E-Trade, the most customizable yet user-friendly platform offered by the brokerage.

Charles Schwab vs. Fidelity

Schwab and Fidelity are both household names in the investment business. They both provide a wide range of banking and investing services. Both provide value, with no-commission trades and low fees in general. Surprisingly, Fidelity doesn’t offer futures trading as Charles Schwab does. However, Fidelity’s charting capabilities are superior to Charles Schwab’s. Choose Schwab if branch availability and online training and webinars are important to you. Otherwise, Fidelity is an excellent, low-cost choice for traders of all abilities.

Should You Invest With Charles Schwab?

Charles Schwab is a well-rounded brokerage with a solid history that has kept up-to-date with its website and mobile apps while staying true to its roots as a discount brokerage. It provides do-it-yourselfers with information or does as much hand-holding as you need. You may find better deals elsewhere, but if you want the full package, you won’t go wrong with choosing Charles Schwab as your investment home.

Cynthia Bowman contributed to the reporting for this article.

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