Charles Schwab Review 2021

Charles Schwab Logo

Founded in 1971 and listed on the New York Stock Exchange, Charles Schwab is one of the oldest and most well-established financial institutions operating in the United States. But is it the right option for you? Before starting to use Schwab (or pretty much any online broker), you should first be able to wrap your head around how to operate it, as well as its platform, fees, commissions, products, research tools, etc. or even whether it is legit or risky.

In this detailed review, we're covering each one of these points and more.

Summary

Since its establishment in 1971, Charles Schwab has had a good reputation as a broker. It has a good selection of securities, attractive and competitive fees, extensive research, great education for beginners, powerful platform, above-average mobile trading, and responsive customer support. It is also considered safe to trade on Schwab, since it’s regulated by The Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). It is also a member of the Nasdaq and the Chicago Board Options Exchange (CBOE).

All of these features can make investors forget about some of the drawbacks like having no access to crypto currency. This broker is great for both beginner and advanced traders, as well as investors who seek no-minimum index funds and rely on premium research.

Overview of Charles Schwab

Here is some basic information about Charles Schwab.

BrokerCharles Schwab
Founded1971
HeadquartersWestlake, Texas, United States
Minimum Deposit$0
FeesVaries
Inactivity Fees$0
Withdrawal Fee$0
CryptocurrenciesNo
Tradable SecuritiesStocks, Bonds, Mutual funds, Fractional shares, CDs, ETFs, Futures, Options
Number of No-Transaction-Fee Mutual FundsMore than 4,200 no-transaction-fee mutual funds.
Regulation(FINRA), (SEC), and (CBOE)
Mobile AppYes
US-AcceptedYes
CurrenciesU.S. dollar (USD), Euro (EUR), British pound (GBP), Australian dollar (AUD), Canadian dollar (CAD), New Zealand dollar (NZD), Danish krone (DKK), Hong Kong dollar (HKD), Japanese yen (JPY), Mexican peso (MXN), Norwegian krone (NOK), Polish zloty (PLN), Singapore dollar (SGD), South African rand (ZAR), Swiss franc (CHF), Swedish krona (SEK)
Customer SupportPhone, live chat, and in-person support at branches
Number of Accepted Countries30+
Our Score4.7/5

Best Alternative to Charles Schwab is Interactive Brokers

  • Best Broker in Multiple Categories
  • Award Winning Platform
  • Lowest Margin Rates
  • Lowest Costs Overall
  • Access To Global Markets
  • Premier Technology

You might also want to read our research we did on eToro, Plus500, Pepperstone and Avatrade.

Pros & Cons

There are definitely many things to like about Charles Schwab, but if you’re considering any online broker, knowing where it falls short is just as important as knowing where it shines.

ProsCons
Free stock and ETF tradingLow default cash sweep rate
Wide fund selectionLimited number and regions for international stocks
Three platforms with no fees or minimum No access to cryptocurrency
Above-average mobile app
Powerful research tools
Good customer service

Charles Schwab Compared to Similar Brokers

The following is a comparison held between Charles Schwab and its strongest competitors to give you more insight about the broker and how it compares to others in the industry.

BrokerCharles SchwabFidelityRobinhoodVanguardInteractive Brokers
Founded19711946201319751978
Minimum Deposit$0$0$0$0$0
CommissionsNoNoNoNoZero commissions on U.S. stocks and ETFs
Inactivity feeNoNoNoNoNo

Investments Available

Charles Schwab offers a good selection of assets on its platform, including most of the asset types that investors look for like index funds, ETFs, bonds, options and futures. However, the broker doesn’t offer forex trading. Interactive Brokers is a great alternative, as they offer forex and a wide variety of investment opportunities as the best in the industry.

Schwab provides fractional shares, which allow investors with little capital to trade higher-priced stocks. So, instead of paying the entire share price, investors are able to buy a tiny portion of a stock. For instance, if a stock costs $100 a share and you buy a $10 slice, you will own 10% of the stock. Single slices start at $5, and investors can purchase up to ten slices at a time. 

However, traders can only do that with stocks of S&P 500 companies, which can be an annoying limitation on Schwab’s fractional share offerings.

The following is a list of Schwab’s tradable securities. 

  • Stocks
  • Bonds
  • Mutual funds
  • Fractional shares
  • CDs
  • ETFs
  • Futures
  • Options

Although traders don’t have access to cryptocurrencies, they can still trade crypto-based products like Bitcoin futures.

Fees

Schwab now boasts some of the lowest account fees available. Schwab doesn’t charge an annual or inactivity fee. However, there is a $25 cost for transferring assets out of the account. It's only $15 if you complete everything online.

Banking

With 369 service locations, Schwab provides a full suite of services that is competitive in the industry. One disadvantage of banking with Charles Schwab is that there are no loyalty rewards for using various products.

Research

Schwab offers its own equity ratings, along with reports from Credit Suisse, Morningstar, Ned Davis, MarketEdge and others. In fact, the broker provides real-time news and earnings reports, as well as multiple research reports, market commentary authored by in-house experts, and a free quarterly magazine, too. The investment screeners offered by Schwab are user-friendly and traders can save their screens.

Schwab is integrated with Google Assistant so that traders can ask Google for stock quotes, market updates and more. The company also provides an Amazon Alexa skill that gives similar information, including the option to create and get regular updates on a watch list

Education

Beginner traders will like the kind of  educational material Schwab offers since the Learning Center of Schwab covers many aspects of investing. Over 50 free webinars are provided to traders each month. Webinars are also archived and available for on-demand viewing. Schwab provides several articles and helpful material regarding investing topics, specific products, and life goals like college investing and retirement.

However, the Schwab education offering's main drawback is that it doesn’t offer an enhanced learning functionality. There is no way to keep track of what educational material you've completed or where you last left off because there is no progress tracking.  

Furthermore, there’s a lack of interactive learning methods like quizzes.

Platform

Beside the basic trading capabilities that Schwab offers on its website, the broker provides a lot of comprehensive trading platforms that are available to trading service clients and completely free. StreetSmart Edge, Schwab’s premier offering, is a customizable platform that can be downloaded or used online via cloud-based technology. It also includes a suite of programs named StreetSmart Central for options trading.

Schwab also provides mobile trading, which can be accessed using the Schwab or StreetSmart mobile apps. StreetSmart and Schwab.com give access to research and great tools for all types of traders. On Schwab's website, you can place basic trades, but the other platforms have more advanced features.

StreetSmart Edge is pretty efficient — it offers simple navigation, customization that matches your trading style, robust charting tools, trading several securities in the same order window and tools to monitor the market exposure. The platform has some pretty notable customizable features, such as the Balance Bar, which is a feature that allows you to see an overview of your buying power and your account. It also allows you to create or edit several trading layouts.

Traders can also research a symbol, view streaming market data and enter an order. Finally, traders can use Schwab.com to keep track of their portfolio and markets, as well as view technical data and access research. It offers an intuitive trade ticket for ETF, stock, and options orders which incorporates current market data.

Mobile Apps

Schwab Mobile and StreetSmart Mobile are the two mobile apps offered by Schwab. Schwab excels at market research. Options traders, for example, may well like the Idea Hub feature, which is exclusive to Schwab mobile. It allows traders to screen and filter through options trade with ease. 

The mobile app also offers Schwab Assistant, which is an AI-powered feature that allows traders to use voice commands from within the mobile app to perform simple tasks like checking market news and quotes, as well as asking to chat with a live representative.

Pros aside, Schwab's use of market data is the most crucial area where it can improve. Schwab's mobile apps don’t provide the best alerts and quotes for active traders. There are no stock price alerts. Stock quotes are real-time but must be refreshed manually, and watch lists auto-refresh every 10 seconds. On the other hand, most of Schwab’s Competitors provide real-time streaming quotes.

The Options tab in the Schwab mobile app has more than 20 pre-defined strategies, such as multi-legged spreads and combinations. The main disadvantage is the lack of options chains, meaning that traders have to manually choose the strike price as well as the expiration date from the trade ticket window.

While Schwab's mobile app is generally well-received, the StreetSmart Mobile app trails behind in terms of user rates.

Is Charles Schwab Safe To Use?

In the US securities markets, there are two significant organizations that help prevent unethical activity, which are The Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). Luckily, Schwab has a membership in both organizations.

The SEC membership number for Schwab is 801-29938, meaning that it is automatically registered in every state in the United States. Schwab is also a member of the Nasdaq and the Chicago Board Options Exchange (CBOE).

The FINRA number for Schwab is 5393. Schwab originally registered with FINRA in 1971, according to the organization’s profile. On the broker's profile, there are a total of 281 disclosures. While this may appear to be a big number, regulatory incidents are very common among online brokers. Also, keep in mind that Schwab has been a recognised trademark since 1971.

Not adhering to fund investment philosophies, not sufficiently informing customers of the risks involved in investing in some sorts of assets, and failing to file suspicious activity reports as required by federal law, are among the allegations against Schwab.

Schwab did not acknowledge or deny any wrongdoings, but it did agree to pay fines in this and other cases.

While these claims are definitely concerning and imply that the broker can deviate from conventional protocol, they don’t necessarily indicate that Schwab is a scam. 

Customer Service

Customers can reach Schwab in a number of different ways — phone and online chat are all available 24 hours a day, 7 days a week. And for those who prefer to speak with a representative in person, Charles Schwab has over 400 locations all over the country, some of which are open on Saturdays.

Phone number: 800-435-4000

Bottom Line

Schwab ticks all the boxes for most traders — beginner and fund investors will like the large selection of inexpensive and low-minimum mutual funds and index funds. Stock traders will benefit from the $0 trading commissions and sophisticated yet user-friendly platforms, extensive research, and tools. Also, Schwab provides a robo-advisor and financial adviser option for investors that want investment management.

On the other hand, Schwab has almost no access to cryptocurrencies and has no loyalty rewards. But all in all, it’s a secure broker that meets the expectations of many investors.

FAQ

How long does it take to transfer money from my bank account to Schwab's?

Choose “investment account transfer” as your funding option when you create a Schwab account. Within five business days, your account will be authorized and ready to fund.

How long should I wait after selling stock to withdraw?

Stocks, municipal securities, bonds, mutual funds traded through a brokerage firm, exchange-traded funds, and limited partnerships that trade on an exchange are all subject to the three-day settlement date.

How do I move cash to my Charles Schwab account?

Select Accounts, then Transfers & Payments after logging in. Select Online Transfer, Setup, Cash Only, and Accounts. You can use the same portal to transfer money from your Schwab account to your bank account and from your bank account to your Schwab account.

What distinguishes a Schwab Global Account from a Schwab One brokerage account?

Unlike the Schwab One brokerage account, where transactions are conducted by calling a Schwab broker and settled exclusively in U.S. dollars, the Global Account allows you to trade online in the foreign currency of any market you're trading in. Both accounts allow you to trade foreign securities.
The Schwab Global Account is intended for investors who wish to trade international securities and are comfortable trading in various currencies online. The Schwab One brokerage account may be perfect for you if you like to trade foreign stocks in US dollars and don't need online trading features.