Charles Schwab is a perennial all-star which is always an excellent selection. This broker succeeds at virtually everything and prioritizes the needs of individual investors. The broker provides high-quality data analysis, commission-free trading on stocks and ETFs, trading platforms suited for beginner and advanced investors, helpful and accessible customer service, and one of the best sign-on bonuses in the industry.
List of contents
Charles Schwab: Website
Minimum Balance: $0
Cost per stock trade: $0
Cost per options trade: $0.65 per contract
Promotion: Up to $1,000 cash (personally referred friends offer)
Commission-free: All
No-transaction-fee mutual funds: 4,300+ NTF mutual funds
Securities Tradable: Stocks, ETFs, bonds, options, mutual funds, futures
Customer service: 24/7 phone support, online chat support and in-person service at more than 300 branches nationwide
Account fees: $50 full transfer out fee, $25 partial
Mobile applications: Schwab offers the “Schwab Mobile” app on the Apple App Store and Google Play Store.
Overview
In April 1971, Chuck Schwab and his partners founded First Commander Corporation, which they renamed Charles Schwab & Co., Inc. in 1973. This broker used the “Through Clients’ Eyes” strategy. The company’s objective is to focus on customers first. Schwab finished the acquisition of TD Ameritrade in October 2020, with full implementation expected between March and August 2023.
Charles Schwab’s customer growth in recent years is due to its acquisition strategies, a 5% increase in brokerage accounts year-over-year, customer referrals, new and improved products and tools, and retail financial services for employers. Schwab, a full-service broker, offers products and services for all investors. Schwab offers several indirect crypto investing options rather than crypto spot trading options. With the TD Ameritrade merger, Schwab becomes a good option for forex, futures, margin, and options traders.
Customer Service
Anyone overwhelmed by the website’s information can get help. Schwab offers 24/7 phone and chat support. Schwab Assistant lets customers use voice commands to find information or get answers. Moreover, most product pages include FAQs and links to more information.
- Phone, chat, and branch customer service are available 24/7.
- Customers can trade with a broker or financial advisor. This service is fee-based and varies by trade.
- Chat offers timely support. Chat customer service was pleasant. After submitting our information, a live rep connected in less than two minutes.
- Most product pages have a Frequently Asked Questions section. Links lead to more information and resources.
- Schwab guarantees customer satisfaction. Schwab will refund fees if a customer is unhappy with services. In addition, Schwab’s pricing guide lists eligible programs, commissions, and other fees.
Products
Clarles Schwab offers a variety of investments as a full-service broker. Schwab adds new products as technology advances and demand for ESG investments rises. In addition, Schwab and TD Ameritrade customers can now access more investment products. Active traders can trade futures and forex with thinkorswim.
Schwab’s Offerings Include:
- Stocks (Schwab has over 3,000 U.S. traded stocks)
- Exchange-Traded Funds (ETFs) and Schwab has over 2,000 ETFs in various asset classes
- Mutual Funds (Schwab offers over 4,000 no-load, no transaction-fee mutual funds)
- Penny stocks (OTCBB)
- International stocks (Equity trading is available for over 30 global markets. So, customers can trade in seven currencies across 12 global markets.)
- Bonds /Fixed income
- Futures
- Options
- Automated Investing through Schwab Intelligent Portfolios (Automated investing using a robo-advisor.)
Pricing
Charles Schwab provides customers with detailed product and service costs. Then, customers can get free educational resources, news, and research, including third-party research. The company’s recent elimination of the $30/month NASDAQ TotalView fee is a good example. Schwab’s margin trading fees are not the lowest among competitors, so traders may need to do a cost-benefit analysis.
- Online stocks, ETFs, and options have no commissions (base commission)
- Fixed income: Treasury bonds, notes, and inflation-protected securities are commission-free (TIPS), Corporate and municipal bonds have a $1 commission, and $10-$250 in commission.
- Schwab’s Mutual Fund OneSource platform has no commission, but other mutual funds have a $74.95 transaction fee. But under-$100 trades are free.
- International stocks on Canadian exchanges cost $6.95 and OTC foreign stock trades cost $50.
- Transferring funds from Schwab is free, but wiring funds costs money. Wire transfer fees are $25, but $15 online.
- Maintenance, inactivity, and software access are also free.
- Deposits, withdrawals, and account closures are free (other than ACAT cost).
Order Types
All standard order types, including market, limit, stop, and trailing stops, are also available through Charles Schwab. Additionally, they provide market-on-open (MOO), market-on-close (MIT), and market-if-touched (MIT) type orders. They also provide immediate or cancel (IOC), fill or kill (FOK), and all or none (AON) orders. Customers can place more complex orders using the StreetSmart Edge platform, such as limit orders with OCO contingent orders.
Usability
Online brokers are competitive. Schwab continues to improve based on customer feedback. Even though, online account opening can take up to 20 minutes, depending on the type. But any investor can easily navigate the platforms. Schwab also has software, mobile, and web tools.
The platforms include:
- The Schwab.com website
- The Schwab Mobile trading app
- StreetSmartEdge, a customizable trading software for desktops that is also cloud-based
- Schwab Intelligent Portfolios, an automated investing tool that uses a robo-advisor
Customers can check portfolio performance on any platform, deposit checks with a mobile device, receive alerts and push notifications, and trade. Schwab creates a holistic experience by allowing customers to see all of their assets on its site, including assets outside of Schwab’s platform.
Trade Experience
Schwab offers many tools and resources to help customers navigate its platforms. Real-time data streams and the ability to create a watchlist improve the experience. Moreover, idea Hub can generate trade ideas using various criteria, and the data is updated throughout the day.
The volume-weighted average price (VWAP) tool is lacking for active traders who rely on it. Trend lines and other drawing tools are part of StreetSmart Edge’s chart analysis. Customers can still make decisions using Schwab’s limited charting capabilities. StreetSmart Edge’s chart window allows trade orders. Mobile app users cannot draw or place charting tools on charts.
StreetSmart Edge’s quote bar and CNBC feed are now more customizable. So, customers can create customized searches, save them, and change account settings.
Security and Reliability
Schwab’s platforms are secure in accordance with industry standards.
- The Schwab website and mobile app both support two-factor authentication. Then, customers can use their fingerprint, face ID, or a preset passcode to access their accounts via the mobile app.
- Customers can use their voice to access their accounts through Schwab’s voice ID feature. So, customers simply say, “At Schwab, my voice is my password.” Voice ID employs biometric voice technology, which employs a proprietary algorithm to store a digital version of a customer’s voice.
- Schwab’s systems have an average platform performance of more than 99.9%.
- Even though, Schwab experienced a security breach between May and December 2021 and began notifying customers about the breach in March 2022.
Transparency
Schwab provides clear pricing and fee info. They also detail each type of investment’s costs. Moreover, they explain each cost type and break down Schwab customer costs. Schwab compares itself to competitors using comparison charts. Price, service, choice, and trading are also compared online.
Schwab has a section on margins and margin loans. This section includes videos explaining margin trading and its benefits and risks, a hypothetical example with gain and loss scenarios and a scenario without margin, Schwab’s current margin rates, margin requirements, and more. Moreover, Schwab updates margin adjustments.
Education and News
Schwab offers webinars, articles, videos, and live branch events as educational resources. The resources cover trading and investing topics. Schwab’s podcasts are Choiceology and Financial Decoder. In 2021, Schwab launched the Schwab Starter Kit, which gives new investors $101 when they open and fund an account. Schwab Live Daily features thinkorswim celebrities and airs Monday-Friday at 10 am ET. Hosted by Schwab employees who specialize in investing and trading.
Customers can stream CNBC news, information, and quotes in StreetSmartEdge. The app provides real-time news and market data. Business Wire, GlobeNewswire, and briefing.com are available. Moreover, other news and research are available for a fee, and many have trial periods.
Pros & Cons of Charles Schwab
Pros
✔ Various platforms for a variety of customers
✔ Great ETF research and scanners
✔ Trading stocks and ETFs without commissions
✔ AI and robot advisor expertise
✔ Available ESG ETF
Cons
✘ Greater margin rates
✘ No automatic sweep function
✘ There are no fractional share ETF trades.
✘ No direct investments in cryptocurrencies
Pros Clarified
- Schwab has multiple resources for a diverse customer base, including multiple platforms. Schwab offers educational resources, customizable platforms and tools, round-the-clock customer service, adaptable digital formats, top-notch analysis tools, and top-rated screeners, whether you are a novice or seasoned investor.
- Excellent ETF research
- Free stock and ETF trading with no commissions is available through Schwab. Online stock and ETF trading is also completely free for investors. Meanwhile, Schwab concentrates on enhancing pricing for 96.3% of their investments as part of order execution.
- Schwab offers an AI-powered robo-advisor. Schwab Intelligent Portfolios is an automated investor (robo-advisor). Schwab explains what a robo-advisor is, how it works, and how to choose one. Moreover, Schwab offers advisors AI-enhanced voice support. Schwab’s mobile app has an AI feature called Schwab Assistant that uses voice commands to set alerts, make trades, and more.
- Schwab has ESG ETFs. Schwab Ariel ESG ETF launched in 2021. Ariel Investments sub-advises Schwab’s first active ETF. There also investments assigns each fund company proprietary ESG-risk ratings.
Cons Clarified
- Higher margin rates: Compared to some of its rivals, Schwab has higher margin rates. 8.75% is their current base rate. So, they currently have effective rates between 8.825% and 10.575%.
- For accounts that have a sweep feature, Schwab does not offer an automated sweep feature. So, this implies that extra money isn’t just swept into these accounts.
- The trading of fractional shares of ETFs is not available at Schwab. But Schwab Stock Slices, customers can purchase fractional shares of stock in any S&P 500 company.
- No direct cryptocurrency investments are permitted; instead of providing spot cryptocurrency trading options, Schwab offers a number of indirect cryptocurrency investment options.
Is Charles Schwab A Worth Broker to Get?
Charles Schwab remains true to its roots as a discount broker helping individual investors.
- No-commission stock and ETF trades and competitive options commissions let you trade cheaply.
- Research and education are also free for Schwab customers of any skill level.
- Moreover, Schwab’s customer service, mobile app, and fractional shares make it a top broker.
One of the largest discount brokers in the US, Charles Schwab is overseen by reputable regulators. Starting in late 2019, it was one of the first brokers to offer commission-free stock and ETF trades. Its research is excellent and covers a wide range of resources, such as trading ideas, Morgan Stanley analyst reports on stocks, and comprehensive fundamental data. Excellent customer service offers timely, pertinent responses.
However, it does have some shortcomings. The product portfolio only includes US and Canadian markets, and mutual fund costs are high, with the exception of the roughly 4,000 funds that are free to trade. However, the educational platform is also poorly organized. Please feel free to try Charles Schwab because its trading and non-trading fees are typically low, its research tools are excellent, and its account opening process is simple.
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Source: Investopedia, Bankrate