Charles Schwab Review – Satisfaction Guaranteed
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While choosing a broker ultimately comes down to your personal needs and financial goals, there’s a lot to love about Charles Schwab.
9/10
Cost
10/10
Features
9/10
Ease of use
8/10
Services
8.5/10
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 said, investment management can seem like something you need a financial advisor for, which can prolong how long it takes to set up an investment account. Investing can be daunting, so 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 the tools you need to get started as an investor and 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, knowing what investment options are available to you on a specific platform is a good idea. Each trading platform has pros and cons, 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. Learn more about one popular brokerage, Charles Schwab, in this review of the platform.
In this article
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 for any reason you're not completely satisfied, we'll refund any eligible fees or commission." This peace of mind is great for new and intermediate investors beginning to play with more complicated 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.
Charles Schwab acquired TD Ameritrade, which meant Charles Schwab customers now get the thinkorswim platform, which is a trading platform for self-directed investors.
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 several companies.
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How does Charles Schwab work?
Creating an account with Charles Schwab is simple and takes about 10 minutes. To start investing with Charles Schwab, navigate to its webpage and click the orange “Open an Account” button in the top-right corner.
From there, you’ll want to select the type of account you want to open. You can choose between a traditional brokerage account, an automated portfolio, or a retirement account (such as a Roth IRA).
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 and information about your employer to move forward.
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.
You’ll then be asked to verify your account with a confirmed security check via email or text. After you’ve confirmed your contact information, you’ll provide information about your current home address.
You then can 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 allows you to set 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.
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 to fund your account once it’s approved, whether 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.
How much does Charles Schwab cost?
Charles Schwab doesn't charge commissions on listed stocks and ETFs, options, and mutual funds. That 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 you can get started with a minimum investment of as little as $5 through fractional shares.
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 a $0.65 per contract fee.
Additionally, Charles Schwab offers thousands of no-load mutual funds with no transaction fee if you trade them online. Account maintenance fees are also $0 with Charles Schwab, adding to the brokerage’s attractive price point.
thinkorswim
Having acquired TD Ameritrade, Charles Schwab took over one of the best trading platforms on the market. Available as a desktop, mobile, and web platform, investors are privy to real-time insights and trading strategies
Great tools and information
Charles Schwab had its own tools that put the power in investors' hands. From simple screeners, Charles Schwab Equity Ratings, and watchlists to independent research from Morningstar and real-time charting, you can compare multiple stocks side-by-side and use over 100 criteria.
Schwab’s StreetSmart Central gives you access to even more information so you can know exactly what you’re investing in, regardless of whether 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 and 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, seven 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's 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.
Related: Best Robo Advisors
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Who is Charles Schwab best for?
Active traders. If you’re an active trader, you’ll love the robust tools offered in your brokerage account with Charles Schwab. StreetSmart Central offers powerful analytical tools that help you leverage various third-party sources to make investment decisions.
New investors who want to learn. While many dynamic tools are 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?
DIY investors. Charles Schwab has a lot up its sleeves, but you might want to use a different platform if you are an experienced or DIY investor. If robo-investing isn't for you, you should look for other options.
Pros and 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 make 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. Merrill Edge
Brokerage | Stock and options commissions | ETF commissions | Options per contract fees | 24/7 customer service |
Charles Schwab | $0 | $0 | $0.65 | Yes |
Fidelity | $0 | $0 | $0.65 | Yes |
Merrill Edge | $0 | $0 | $0.65 | Yes |
Fidelity
On the surface, Fidelity and Charles Schwab are very similar in 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.
Merrill Edge
Merrill Edge also stacks up nicely compared to the other brokerages on this list. 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.
Related: Best Brokerages for Beginners
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.
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- Averaged Stock Pick Return over 593% (vs. 165% for the S&P)
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- 30-Day Membership-Fee-Back Guarantee
- Joy Wallet Reader Deal: The Motley Fool is offering 50% off its top stock-picking service for new members (Limited Time)
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 Charles Schwab offers 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 it, too. With a move in 2019 to eliminate fees on ETF commissions, Charles Schwab remains a major player in the investment world, making it an ideal choice for anyone looking for a reputable brokerage. Suppose you’re interested in getting started investing or learning more and taking a more active role in managing your portfolio. In that case, Charles Schwab is a great brokerage to start investing with and growing.
Some investors may opt for a different brokerage even with a glowing review. 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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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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