Charles Schwab Review – Satisfaction Guaranteed

If you really want to prepare for your future, it’s important to set up retirement accounts in addition to your checking and savings accounts. That being said, investment management can seem like something you need a financial advisor for, which can prolong how long it takes to get the ball rolling in setting up an investment account. Investing can be daunting, which is why it’s important to have a solid brokerage as the foundation of your investment efforts.
Whether you’re investing for retirement or looking to trade stocks to increase your net worth, a good brokerage will give you all of the tools you need to get started as an investor as well as grow into new strategies as you get your sea legs. After all, the best investment advice you can get is to start investing today if you aren’t already!
Before you open a brokerage account, it’s a good idea to know what investment options are available to you on a specific platform. From basic functionality in trading mutual funds, index funds, exchange-traded funds (ETFs), and stock trading to the transaction fees you can expect to pay, each trading platform has its pros and cons. Learn more about one popular brokerage, Charles Schwab, in this review of the platform.

What is Charles Schwab?

Charles Schwab is a brokerage that offers a few different ways to invest, putting flexibility and choice in the hands of its users. Whether you want to manage your investments, automate your investments with the help of a robo-advisor’s professional perspective, or work with a financial consultant to reach your goals, Charles Schwab has the tools and functionality you need to find success.
One unique aspect of Charles Schwab is a satisfaction guarantee. According to its website, “If you’re not satisfied for any reason, we’ll refund your eligible fee or commission, and work to make things right.” This sort of peace of mind is great for new investors as well as intermediate investors beginning to play with more complicated sorts of investment strategies, such as options trades. As a result, for passive and active traders alike, Charles Schwab is likely to meet your needs—regardless of the account type you’re setting up.
Trades in the platform are run on a trade ticket system, which is available to use whether you’re accessing your portfolio on a desktop computer or a mobile device. It has also recently added the ability to buy fractional shares in a few different companies via Schwab Stock Slices.
It’s also worth noting that Charles Schwab is consistently recognized as a leader in the industry by other professionals. From a Best in Class award in 2020 by StockBrokers.com to recognition as a Top 50 company by Fortune for being one of the World’s Most Admired Companies in 2020, Schwab is no stranger to industry praise and recognition.

How does Charles Schwab work?

Creating an account with Charles Schwab is simple and takes about 10 minutes. To get started investing with Charles Schwab, navigate to its webpage and click on the orange “Open an Account” button in the top-right corner.
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From there, you’ll want to select what type of account you’re looking to open. You can choose between a traditional brokerage account, or pick an automated portfolio or retirement account (such as a Roth IRA).
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You’ll then select whether you’re opening an individual or a joint account. Before moving forward, Charles Schwab lets you know that you’ll need your social security number as well as information about your employer to move forward.
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You’ll then start by filling out some personal information about yourself. This includes your first and last name, date of birth, SSN, email address, and phone number. You’ll then create some login credentials, including a security question to keep your account safe.
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You’ll then be asked to verify your account with a security check that is confirmed via email or text. After you’ve confirmed your contact information, you’ll provide information about your current home address.
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You then have the opportunity to set up what paperless documents you’d like to receive via email and what you’d prefer to have mailed to your address. This is the page where you’ll name other trusted contacts who may need to have access to your account. You also have the opportunity to create a margin account, which “allows you to borrow against your eligible securities so you can purchase additional securities, sell securities short, obtain short-term financing, or use the account as a source of overdraft protection.”
Charles Schwab then gives you the option of setting up additional trading and checking accounts if you plan on actively trading or are looking for a check or debit card to conveniently withdraw funds from your brokerage account when you need to.
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You’ll then need to answer a few regulatory questions and enter information about your employment and how you plan to fund your account. Afterward, you decide how you plan on funding your account once it’s approved, whether that’s via check, bank transfer, or investment account transfer. If you’re transferring using your bank account, Charles Schwab conveniently lets you sign in to your bank account right then and there to streamline the process.
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How much does Charles Schwab cost?

Since 2019, Charles Schwab has been working to make the costs associated with its brokerage as low as possible. From low expense ratios on many of its securities to no commissions for online trades of ETFs, equity, and OTCBB trades, it certainly delivers on this promise in many ways. That being said, if you’re doing options trades, you will be charged a $0.65 fee per contract. Charles Schwab also has a $0 account minimum, and through fractional shares, you can get started with a minimum investment of as little as $5.

Charles Schwab features

Charles Schwab is a fully-featured brokerage for investors of all stripes, but there are a few features that pretty much everyone will appreciate about using Schwab as its brokerage.

Low costs

Pricing is something every investor wants to know about since high fees can eat into your investment returns and limit your spending power in the future when you need it most. Charles Schwab offers commission-free trades for Charles Schwab ETFs, stocks, and options, although you’ll pay $0.65 per contract fee.
Additionally, Charles Schwab offers more than 4,000 no-load mutual funds which have no transaction fee as long as you’re trading them online. Account maintenance fees are also $0 with Charles Schwab, adding to the brokerage’s attractive price point.

Great tools and information

Charles Schwab puts the power in investors' hands with a variety of award-winning tools that help you more actively take control of your portfolio. From simple screeners, Charles Schwab Equity Ratings, and watchlists to independent research from Morningstar and real-time charting, you’ll be able to compare multiple stocks side-by-side and use over 100 different criteria to do so.
Schwab’s StreetSmart Central gives you access to even more information, so you can know exactly what you’re investing in, regardless of if you’re on a custodial account or working on a personal IRA. Access to Market Edge, for example, gives you even more third-party resources to leverage in your portfolio management through Schwab.

Satisfaction guarantee

Not many brokerages come with a satisfaction guarantee, but Charles Schwab does. If for any reason you’re not happy with the platform, it’ll work with you to correct the problem and even refund you your fee or commission. This includes fees in the pricing guide for individual investors as well as several advisory services, including Schwab Managed Portfolios, Schwab Intelligent Portfolios Premium, and Schwab Private Client.

Customer support when and where you need it

Charles Schwab offers customer support 24 hours a day, 7 days a week. In addition to offering online support via live web chat and over-the-phone support, investors can also visit a brick-and-mortar location in their area to get help with their accounts.

Robo-advising through Schwab intelligent portfolios

If you’re interested in automated investing, Schwab intelligent portfolios will help you build and manage your portfolio using personalized information about you, your finances, and your goals. Each robo-advisor through Schwab has the same commitment to keeping costs low—and you’ll even have the opportunity to discuss your portfolio with a live advisor should you need to.

Who is Charles Schwab best for?

Active traders. If you’re an active trader, you’re going to love the robust tools offered as part of your brokerage account with Charles Schwab. StreetSmart Central offers powerful analytical tools that help you leverage a host of third-party sources to inform your investment decisions.
New investors who want to learn. While there are a lot of dynamic tools packed into Schwab’s brokerage, it’s still very newcomer-friendly. If you’re new to the platform you can use Charles Schwab’s robo-advisors to help get the ball rolling, and then learn more about different strategies and investment options using the resources and tools provided through the platform.

Who shouldn’t use Charles Schwab?

Futures traders. If you want to trade futures, you’ll have access to that asset class via your Charles Schwab account, but you’ll need to create a separate account just for futures trading. You’ll be using the StreetSmartCentral aspect of Schwab to manage these types of trades rather than its All-in-One Ticketing System.

Pros & cons

Pros
  • Great customer service. The customer service of Charles Schwab is impressively reachable, with a deep knowledge base to help you learn and answer your questions before you even need to speak to an agent.
  • Powerful investment tools. The calculators, estimators, and other analytic tools offered through Charles Schwab are both powerful and easy to use. This means that you can get the data you need to inform your investment decisions without jumping through extra hoops.
  • Satisfaction guarantee. The stock market is incredibly volatile, so knowing that you have a satisfaction guarantee to protect you if you make a mistake or something goes wrong is valuable peace of mind that not many investment brokers offer.
Cons
  • Money market funds aren’t automatically swept into. If you have uninvested cash in your brokerage account, Charles Schwab doesn’t automatically sweep it into a money market fund for safekeeping, so you’ll need to make sure you’re used to double-checking that your uninvested cash is where you want it to be.
  • Separate interface for futures. While it’s more of an annoyance than a full-fledged drawback, it still is a nuisance to have to manage two separate accounts for futures trading through Charles Schwab.
  • New investors could get overwhelmed by research. This is another minor quibble, but if you’re new to investing it’s easy to get overwhelmed or inundated by the amount and depth of research Charles Schwab offers. This is ultimately a good thing as you grow in comfortability around investing; however, if you’re just starting this can make the platform more daunting than it truly is.

Charles Schwab vs. Fidelity vs. TD Ameritrade vs. Merrill Edge

BrokerageStock and options commissionsETF commissionsOptions per contract feesSatisfaction guarantee24/7 customer service
Charles Schwab$0$0$0.65YesYes
Fidelity$0$0$0.65NoYes
TD AmeritradeTD Ameritrade$0$0$0.65NoYes
Merrill Edge$0$0$0.65NoYes

Fidelity

On its surface, Fidelity and Charles Schwab are very similar in terms of costs and customer service. That being said, Fidelity doesn’t have Schwab’s satisfaction guarantee, nor are the investment tools as robust at Fidelity as they are at Schwab. That being said, based on this comparison chart, it’s clear that Fidelity and Schwab are major competitors.

TD Ameritrade

TD Ameritrade is another major player in the world of online brokers, by and by-and-large offers many of the same perks of the other brokerages in the above chart. That being said, TD Ameritrade’s analytical tools aren’t as dynamic as Charles Schwab’s—and it also doesn’t offer a similar satisfaction guarantee.

Merrill Edge

Merrill Edge also stacks up nicely compared to the other brokerages on this list. While Schwab offers 300 banking locations, Merrill Edge offers about 4,000 more than that. That being said, if you don’t plan on getting in-person assistance for your account, you’d probably rather have Schwab’s satisfaction guarantee than the ability to go to a physical location—especially with how many traders are using their phones and computers these days.

FAQs

Is Charles Schwab a secure platform?
Yes. Charles Schwab prides itself in keeping its users' personal information and financial information safe and secure. In fact, it offers a Schwab security guarantee, which, according to its website, means that it will “cover any losses in any of your Schwab accounts due to unauthorized activity, as part of our SchwabSafe security measures.”
When are deposited funds available to trade?
If you’re electronically depositing funds from one of your bank accounts, you’ll likely be able to access those funds for same-day trading. That being said, Charles Schwab’s website does note that in rare cases “incoming deposits may not be immediately used for certain securities and are subject to a holding period of up to 5 business days.”
Can I invest with my Charles Schwab credit card?
Charles Schwab offers two different credit cards which have rewards that allow you to deposit cash-back earnings into your Charles Schwab brokerage account. However, you’re not able to use a credit card (be it a Charles Schwab American Express or any other Mastercard, Discover, or Visa) to purchase stocks directly on the platform.

The bottom line

Every platform has its pros and cons, but there’s a lot to love in Charles Schwab. Whether you’re just starting or are an advanced investor, the tools offered by Charles Schwab allow you to make the most of your portfolio. This makes Charles Schwab an ideal choice for investors who intend to grow in their understanding and use of a brokerage, rather than just take a passive approach to portfolio management.
With a fully-featured mobile app for trading on the go, Charles Schwab’s StreetSmart Edge tools give you everything you need to play an active role in managing your portfolio, even as they offer robust robo-advisor tools to help manage your portfolio, too. With a recent move in 2019 to eliminate fees on ETF commissions, Charles Schwab continues to be a major player in the investment world, making it an ideal choice for anyone looking for a reputable brokerage. If you’re interested in getting started investing or learning more and taking a more active role in managing your portfolio, Charles Schwab is a great brokerage to start investing with and growing with.
Even with a glowing review, some investors may opt for a different brokerage. While choosing a broker ultimately comes down to your personal needs and financial goals, there’s a lot to love about Charles Schwab to make it a top contender in your search for online brokers.

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