May 16, 2018

Charles Schwab Review: Is It a Good Brokerage?

By Kim P
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Charles Schwab is one of the oldest names in the world of investing. With low fees, no account minimums, and robust research tools, it's a good brokerage for all levels of investors.

5-point scale (the higher, the better)

Pros and Cons

  • Vast selection of commission-free ETFs and mutual funds
  • 2 platforms (one for beginners and one for advanced traders)
  • 24/7 customer service including online chat
  • Commission costs on mutual funds outside of the commission-free funds
  • Robo-advisor option requires a minimum investment of $5,000

Bottom Line

Good choice for beginning and advanced investors looking to invest in ETFs and mutual funds or investors that require extensive research

Charles Schwab began in 1973 and has since evolved into today's affordable brokerage with a robust menu of services. Keeping up with the competition, Schwab recently slashed their commissions while still providing around-the-clock customer service, staying within their mission to "put the client first."

Keep reading to see if this big-name broker is the right choice for you.

Who is Charles Schwab Good For

Investors all over the spectrum can benefit from a Charles Schwab brokerage account. Whether it's your first rodeo or you are an active trader, there are benefits to using Charles Schwab for many different investments.

Whether you open a taxable account or you are saving for retirement, Charles Schwab offers one of the largest amounts of commission-free investments along with $0 commission U.S. stock trades. They offer the resources to help you build a diversified and robust portfolio while helping you save money as you execute trades.

If having hundreds of choices at your disposal doesn't overwhelm you, this brokerage could provide you with everything you need. Thanks to the multiple platform options and robust research they offer, we think it's a great option for the first-time investor as well as the day trader.

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What Type of Investments Do They Offer?

At Charles Schwab, you'll find the following types of investments:

  • Stocks
  • Bonds
  • ETFs
  • Mutual funds
  • Options
  • Futures

Schwab offers transparent pricing and no account service fees. They offer individual/joint brokerage accounts as well as traditional/Roth IRA accounts.

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Reasons We Like Charles Schwab

  • They offer low cost commissions. Schwab offers some of the lowest commissions among online brokers today including $0 commission on U.S. stock trades. Schwab keeps their costs down while not forcing you to sacrifice other features, such as a robust trading platform and quality research.

  • There are no account minimums. Schwab has no account opening minimum balance requirements for their domestic taxable brokerage accounts and retirement accounts. You can open an account with $0.

  • The Schwab StreetSmart.com is a great platform for beginners. It's no secret that beginning investors can get easily overwhelmed handling investments on their own. The StreetSmart.com platform offers a simple, yet robust, interface that users can use to their advantage.

  • The StreetSmart Edge offers a more sophisticated platform for advanced traders. Experienced active traders will enjoy the customization and charting options in the more advanced desktop-based StreetSmart Edge platform.

  • There are many robust research options available. Investors are given a variety of research options, including equity ratings from Schwab as well as research from reputable third-parties such as Morningstar and Market Edge. You'll have access to real-time news as well as videos and articles from the industry experts.

  • Investors can have 24/7 customer support. Schwab offers the unique benefit of 24/7 phone or online chat support. The wait time is usually fairly short for live support as well. If you prefer email support, you'll have to log into your account and send a secure message; they do not offer individual email addresses.

  • You can visit more than 300 physical Charles Schwab branches. If you prefer in-person assistance, you can visit your local Charles Schwab branch.

  • You'll have access to more than 200 commission-free ETFs and 3,000+ commission-free mutual funds. Schwab claims to have the ETFs with the lowest expenses in the industry along with no upfront commission costs. Not only is their selection vast, but they make it easy to screen and locate the investments you desire.

  • Hands-off investors can use Schwab's robo-advisor for automatic investing. If you just don't have the time or patience to handle your own investments, the Schwab Intelligent Portfolios can invest and rebalance your accounts for no advisor fee, service fee or commissions.

  • You can sync your accounts via multiple platforms. You can access your accounts via the web, mobile app, or desktop app at any time and see the same information. You can see the changes in real-time, accessing your information anywhere you go.

  • You can bank with Schwab and link the accounts to your brokerage account. Schwab offers a variety of banking services, including checking and savings accounts. Once you link your banking and brokerage accounts, you can transfer funds for immediate use.

Reasons You May Want to Look Elsewhere

  • If you want to buy a transaction-fee fund, the commission is hefty. If you have your heart set on a specific mutual fund that is not a part of the no-load funds, the commission is hefty, at $49.95 per purchase.

  • You need at least $5,000 to use Schwab's robo-advisor. While we think it's great that Schwab offers a robo-advisor for those investors who prefer to let someone else make choices for them, the minimum opening deposit is much higher than its competitors.

How They Compare

Schwab vs Fidelity: These two brokers both offer robust research options.

Schwab vs TD Ameritrade:

Schwab vs Vanguard: If you need minimal handholding and don't need a robust trading platform, Vanguard offers a viable option. Active or complex traders, however, will prefer Schwab's trading platforms over Vanguard's.

Bottom Line

Charles Schwab offers a household name that can be comforting when investing large amounts of money. With many options for commission-free trades, it may be easier to keep more of your earnings by using Charles Schwab for a taxable or retirement account. If you are looking for something more along the lines of a robo-advisor, or your investment needs are simple, another broker with lower investment requirements and less complex trading platforms may suit you better.

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