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About Charles Schwab
Charles Schwab is one of the few companies that tries to offer both "convenience" and "low cost" in one brokerage package. While it features inexpensive index funds and ETFs and charges zero trade commissions on most assets, it also has a network of more than 350 physical branches scattered throughout the United States.
As of Q2 2023, it manages more than $7.58 trillion in assets and has hundreds of billions invested in its index mutual funds and ETFs. In this review, we'll take a closer look at Schwab's products, services, and fees to help you decide if it's the right broker for you.
Charles Schwab: Overall Rating
| Feature | Insider rating (out of 5) |
| Fees | 5.00 |
| Investment selection | 4.75 |
| Access | 4.65 |
| Ethics | 5.00 |
| Customer service | 5.00 |
| Overall score | 4.88 |
Charles Schwab Pros and Cons
| Pros | Cons |
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Charles Schwab brokerage accounts start at $0 and have notoriously low fees compared to other brokerages. Schwab's website lists that passively managed mutual funds have an expense ratio ranging from 0.02% to 0.39%, and expense ratios for actively managed funds range from 0.22% to 1.25%. This brokerage account offers a large range of account options (including a robo-advisor option), and investment options (like mutual funds, ETFs, stocks, bonds, options, futures, margin loans, and more).
However, there are high minimums for certain account levels, such as Schwab Intelligent Portfolios ($5,000 minimum) and Schwab Intelligent Portfolios Premium ($25,000). Schwab brokerage accounts also only offer a limited selection of crypto assets, and traders can't directly invest in these assets. Instead, users can invest in Schwab Crypto Thematic ETF or the Additional ETFs & Mutual Funds portfolio, which invests in equities/future contracts related to cryptocurrencies.
Is Charles Schwab Trustworthy?
Charles Schwab has received an A+ rating with the Better Business Bureau. The BBB uses a grade range of A+ to F when assigning its ratings, and its ratings reflect its assessment of how well a company interacts with its customers.
BBB ratings don't guarantee that a company will perform well or be reliable. You may want to ask friends and family who have used Charles Schwab about their experiences, or read online customer reviews.
The app faced some backlash after it temporarily limited trading of Gamestop (GME) as Reddit users upended the market. Charles Schwab has closed more than 103 complaints in the last 12 months, according to BBB data.
Ways to Invest with Charles Schwab
Charles Schwab brokerage accounts offer both individual and joint brokerage account options so you can deposit funds and invest in stocks, bonds, mutual funds, ETFs, and more. It offers 24/7 customer support, access to online tools, investment research, and Schwab's mobile app.
Individual Brokerage Accounts
Schwab One brokerage account provides market access to folks looking to trade stocks, bonds, options, mutual funds, ETFs, and more. But you have to be approved first in order to buy and sell options. Schwab also offers account holders access to research, financial tools, and planning strategies.
Joint Brokerage Accounts
Folks usually open a joint brokerage account when they are looking to combine investments with a spouse or family member.
- Joint Tenants with Rights of Survivorship: Joint owners that have equal rights over the account. If one of the owners dies, the surviving account owner automatically receives all account funds.
- Tenants in Common: If one of the owners of this account dies, the share of that person's funds does not go to the surviving owner. Instead, the deceased person's shares go to their estate.
- Community Property: Participants must be a married couple. A brokerage account with equally split assets between participants. If one of the spouses dies, the surviving spouse receives that previous owner's account shares.
Individual Retirement Investment Accounts
Charles Schwab offers many types of retirement savings accounts, including:
- Traditional IRA: An individual retirement account funded by pre-tax dollars and is then taxed upon withdrawal when the user is at least 59 1/2 years old. Otherwise, the account charges a 10% penalty fee for early withdrawals. Account funds are invested in stocks, bonds ETFs, mutual funds, CDs, and more. It's free to open an account. The 2023 contribution limit is $6,500 for folks under 50 ($7,500 for 50 and older).
- Roth IRA: An individual retirement account funded by after-tax dollars. Withdrawals are tax-free and can be accessed once the account owner is at least 59 1/2 years old. Like a traditional IRA, funds are invested in stocks, bonds, ETFs, mutual funds, CDs, and more. It's free to open an account, and the 2023 contribution limit is $6,500 for folks under 50 ($7,500 for 50 and older).
- Rollover IRA: Folks can roll over funds from a previous employer's 401(k) savings plan (as long as the guidelines for the previous plan allow it). Rollover IRA accounts allow you to invest funds in stocks, bonds, ETFs, mutual funds, CDs, and more.
- Custodial IRA: A parent/guardian can open a custodial IRA on behalf of a child/dependent. Users can choose whether to open this account as a traditional or Roth IRA, after which the account functions the same as either a traditional or Roth IRA with the same contribution limits, withdrawal rules, and tax benefits.
- Inherited IRA: After the original owner dies, eligible individuals can inherit a traditional or Roth IRA as the current beneficiary. The funds remain tax-advantaged. The difference is that the new beneficiary may be able to withdraw funds before 59 1/2 without penalty. But keep in mind, those individuals are required to liquidate the account after 10 years.
Personal Choice Retirement Account
A Personal Choice Retirement Account (PCRA) is a self-directed, employer-sponsored retirement plan that lets you invest in a larger range of investment options, including thousands of different mutual funds and ETFs. Unlike traditional retirement accounts, a PCRA gets you more account flexibility and personal involvement.
This account is only recommended for folks who want to put a lot of time and effort into making their own investment decisions and are knowledgeable in investing/saving plans spaces. Also, Schwab doesn't allow its advisors to be appointed to PCRA accounts. But the site also states that you may be able to appoint a non-Schwab-issued independent advisor.
Automated Investing Account
It offers a robo-advisory service called Schwab Intelligent Portfolios, which chooses a custom blend of ETFs for you that lines up with your target asset allocation and offers automatic rebalancing and tax-loss harvesting. Your funds are invested in a portfolio of diverse low-cost ETFs, including Schwab ETFs.
To get started, you take a risk tolerance and goal planning questionnaire in order to determine how your portfolio is set up and the best way to invest your funds.
The premium version of this account gets you unlimited access to a certified financial planner for one-on-one advice and guidance. It also offers you more interactive online planning tools, such as the "what-if" Play Zone stress-test, and a customized goal roadmap.
College Savings Accounts
Schwab's 529 Education Savings plan invests in a diverse portfolio of mutual funds from multiple fund families so you (or a dependent) can save for future higher education costs. You can use 529 plan funds for tuition (including K-12 costs), school supplies, apprenticeships, trade schools, room and board costs, and more. A 529 plan account has multiple risk tolerance and investment strategy portfolio options; this includes the actively managed fund portfolio or the low-cost index fund portfolio.
You can also open an additional education saving account as a complement to your 529 plan account. Like the Schwab 529 Education Savings plan, you can use funds for K-12 expenses, tuition costs, and other education expenses. There's an annual contribution limit of $2,000 per beneficiary. However, contributions to this account are not taxable.
Custodial Accounts
A Schwab One Custodial Account allows a parent/guardian to open a savings account on behalf of a child/dependent for long-term growth potential. You can invest your funds in stocks, bonds, mutual funds, ETFs, and more. Funds from a custodial account can be saved and invested for future retirement savings, college tuition costs, or down payments.
The beneficiary can access the account when they reach the age of 18 or 21, depending on the state). There are no contribution limits, but you won't get the same tax advantages that 529 plan accounts have. Instead, only the first $2,500 of the beneficiary's unearned income is tax-free (but this only applies to beneficiaries who are younger than 19 or a full-time college student under 25). Also, there's no gift tax incurred for contributions up to $17,000 per year per beneficiary (or $34,000 for couples).
Small Business Retirement Accounts
- Individual 401(k) plans: Self-employed or owner-only businesses can save for retirement by investing in mutual funds and ETFs. This account offers higher contribution limits than a SEP-IRA or a profit-sharing plan ($22,500 for individuals under 50 in 2023 and $30,000 for those 50 and older). Contributions are also tax-deductible and earnings are tax-deferred. But like IRAs, you can't withdraw until age 59 1/2.
- Business 401(k) Plan: A customized, individually designed retirement plan for businesses, that allows employees to make large salary deferrals that grow tax-advantaged. Employees must be at least 21 years old and worked at least 1,000 hours in the last year.
- SEP IRA: A simplified employee pension plan (SEP plan) is a small business retirement plan set up by an employer or eligible individuals for tax-deductible contributions, tax-deferred earnings, and other investment planning tools and services. It doesn't cost anything to open an account or maintain it. Account owners can contribute up to 25% of your income (or 20% for self-employed individuals) or $66,000 for 2023 — whichever is less.
- SIMPLE IRA: A simple investment match plan for small businesses (100 employees or less) or self-employed individuals. Contributions are tax-deductible and grow tax-deferred. Plus, it offers employee-match contributions of up to 3%. Folks under age 50 can contribute up to $15,500 for 2023 (or $19,000 for folks age 50 or over).
- Personal Defined Benefit Plan: Self-employed individuals and small business owners who are age 50 or older can open this retirement account to make large contributions for short-term, high-risk investment strategies (at least five years). Contributions are 100% tax-deductible (within IRS limits) and grow tax-deferred. There's also no set contribution limit. Instead, limits are calculated by weighing several factors like age, compensations, and goal-retirement age.
- Company Retirement Account (CRA): Also referred to as a "pension trust" is actually a brokerage account that holds assets from a customized retirement plan. You should only open this account if you're a plan administrator or business owner already with a retirement plan. It allows you to invest in a large range of assets and access third-party research and tool and expert insight.
Socially Responsible Investing Accounts
Schwab Charitable is a donor-advised fund account that allows you to structure your charitable contributions with tax advantages. You can open a free core account or a professionally-managed account ($250,000 minimum). With this account, you can grow investments tax-free, itemize your deductions, and possibly eliminate capital gains tax on charitable contributions on non-cash assets. You can contribute cash, publicity traded securities, stocks, bonds, mutual funds, real estate, private equity, and more.
Trust and Estate Accounts
Schwab One Trust Account is an easy way to manage and protect your trust's assets for estates of any size. This account comes with all the benefits that the Schwab One brokerage account offers, as well as accessible asset management, distribution of assets after death, 24/7 customer service and support, and more.
If you're an executor or court-appointed administrated of estates, you can open a Schwab One Estate Account to manage and consolidate assets, access cash, pay taxes, and cover expenses. This account also comes with the same perks as the Schwab One brokerage account. And you can quickly distribute assets to beneficiaries, transfer titles to heirs, and get an accurate value on your estate for the IRS.
Investment Options
Savvy DIY investors can search for index funds and ETFs that offer low expense ratios. And Charles Schwab's offerings are some of the most affordable in the industry. For example, its S&P 500 index fund has an expense ratio of only 0.02%. The expense ratio on its Total Stock Market Index (SWTSX) is just slightly higher at 0.03%.
Many of Schwab's ETFs come with market-leading costs, as well. It's Multi-Cap Core (SCHB) and Large-Cap Core (SCHX) ETFs, for example, each have expense ratios of just 0.03%. Plus, over 4,000 of Schwab's mutual funds have minimum investment requirements of only $100 or less. And many of those funds also come with no transaction fees or loads, including all 200+ of its index funds.
It should be pointed out, however, that Schwab does also sell transaction-fee funds. And if you decide to purchase one of these funds, it could cost you up to $49.95 per buy, which is pretty high. (All of Schwab's mutual funds are free to sell, though.) Also, it should be noted that a short-term redemption fee of $49.95 could be charged on some mutual funds if they're held for less than 90 days.
In addition to free trades, Schwab has a powerful trading platform called StreetSmart Edge. StreetSmart Edge offers a wealth of stock data, news, charting tools, screeners, watch lists, and conditional order options to meet traders' needs.
Account Tools and Wealth Management
Traders get access to beneficial account tools when they open an account, such as Schwab's Portfolio Checkup tool, Schwab Stock Slices, and Charles Schwab's mobile app.
Wealth Management Tools
Charles Schwab offers many options if you're looking for investment advice and management. First, if you're just wanting to analyze a DIY portfolio, you can use Schwab's Portfolio Checkup tool at any time. It will evaluate your portfolio's performance based on your target asset allocation and will recommend adjustments if needed.
Finally, if you have complicated wealth management needs, Schwab can connect you with a local advisor near you via its Schwab Advisor Network. With Schwab's Private Client service, you can get a dedicated team to build and maintain your portfolio. You'll need at least $1 million to be eligible for Schwab Private Client and the advisory fees start at 0.80%.
Fractional Share Investing
Schwab Stock Slices allow users to buy fractional shares of individual stocks for as little as $5. Stock Slices make expensive stocks accessible to investors who have smaller amounts of money to invest.
For example, let's say you really wanted to invest in Amazon, but one share costs hundreds of dollars at the time you're considering bying. You may not have that much to invest right now. Or even if you had barely enough to invest, putting the majority of your investing pot into just one company is risky.
But with Schwab Stock Slices, you can invest $5, $10, $100, or whatever other amount you choose in any stocks that are part of the S&P 500. And you can buy up to 10 slices at one time.
For example, you could choose to invest $500 in four different companies ($125 a piece). Or choose to separate that $500 into 10 different companies at $50 a piece, even though it would cost you far more to buy one single share of each of those 10 individual stocks.
Schwab Stock Slices essentially give investors the power to build their own mutual fund, of sorts, out of blue-chip stocks with strong track records and/or dividends.
Capable Mobile Apps
Charles Schwab's mobile app experience is well-designed and feature-rich. Not only can you use the app to quickly check your account balances, but you can also use it to plan and execute trades.
If you're looking to do lower-level research on individual stocks and basic trading, the main app is just fine. However, if you're looking for more in-depth research and charting tools, you'll probably want to download Schwab's StreetSmart app.
Both the main Schwab mobile app and StreetSmart are available on the Google Play and Apple devices. You can log in with your Schwab username and password. Or for extra security and convenience, you can log in using your fingerprint or Face ID.
Charles Schwab Fees
Most Charles Schwab brokerage account options have $0 opening and maintenance fees and $0 account minimums. But there are a few portfolio options and account types that do charge higher minimums and fees.
| Account option | Account minimum | Fees |
| Brokerage accounts | $0 | Maintenance fee: None Commissions: $0 per online listed equity trade, and online Schwab ETFs |
| Retirement accounts | $0 | Maintenance fees: None Service fees: None |
| Personal Choice Retirement Account | $0 | Equity commissions: $0 online trades Broker-assisted trades: $25 Maintenance fee: May be charged |
| Schwab Intelligent Portfolios | $5,000 | Advisory fees: None Commission fees: None Tax-loss harvesting: Must have an account balance of at least $50,000 |
| Schwab Intelligent Portfolio Premium | $25,000 | One-time planning fee: $300 Advisory fee: $30/monthly Tax-loss harvesting: Must have an account balance of at least $50,000 |
| Schwab 529 Education Savings Plan | $0 | Maintenance fees: None Brokerage commissions: None Service fee: None Portfolio fee: range from 0.20% to 0.86% |
| Education Savings Account | $0 | Maintenance fees: None Service fees: None Commissions: $0 per online listed equity trade. $0 per online trade ETF, stocks options, and mutual funds |
| Schwab One Custodial Account | $0 | Maintenance fee: None Commissions: $0 online listed stock and ETFs Options trades: $0.65 per contract Traders through a broker: $25 Automated phone trades: $5 |
| Individual 401(k) Plan, SEP IRA, SIMPLE IRA | $0 | Monthly service fee: None Maintenance fee: None Commissions: $0 per online listed equity trade, and online Schwab ETFs |
| Schwab Personal Defined Benefit Plan | Start-up fees: starting at $2,250
| Annual service fees: $1,750 Commissions: $0 per online listed equity trade, and online Schwab ETFs |
| Schwab Charitable | $0 for core accounts $240,000 for professionally managed accounts | Minimum grant (both account types): $50 Annualized Administrative Fees: Varies by average daily value (ranges from 0.10% of assets to 0.60%) |
| Schwab One Trust Account | $0 | Monthly service fees: $0 Commissions: $0 per online listed equity trade, and online Schwab ETFs |
| Schwab One Estate Account | $0 | Monthly service fees: $0 Commissions: $0 per online listed equity trade, and online Schwab ETFs |
Other investment strategies, advisory options, and indexing minimums include:
- Schwab Wealth Advisory: $1 million enrollment minimum
- Schwab Advisor Network: $500,000 investment minimum
- Managed Account Select Equities strategies: $100,000 minimum
- Managed Account Select Fixed Income Strategies: $250,000 minimum
- Schroeder Strategies: $250,000 investment minimum
- Windhaven Strategies: $100,000 investment minimum
- ThomasPartners Strategies: $100,000 investment minimum
- Schwab Personalized Indexing: $100,000 investment minimum
Charles Schwab's large selection of account options and investment choices results in an extensive range of fees and charges deepening how you choose to invest. Therefore, make sure to do your own research before opening an account, selecting a portfolio, or funding an investment. Check out Schwab's full list of fees.
Charles Schwab FAQs
You don't need to meet any minimum account requirements to open a Schwab brokerage account, IRA, trust, education savings account, or custodial account. But Schwab Intelligent Portfolios, its standard automated investing account, has a $5,000 minimum. Its advisor-guided, automated account, Schwab Intelligent Portfolios Premium, requires at least $25,000. There are also certain plans, advisory options, and investment portfolios that require higher account minimums to open.
Schwab offers a variety of resources and accounts (e.g., Schwab Intelligent Portfolios) that help beginners get better acclimated to investing. These include its investing insights, market commentary, retirement savings blog posts, and podcasts.
Bank of America acquired Charles Schwab in 1983 for $55 million. Founded in 1971, Charles Schwab has been a leader in the discount brokerage industry for over 45 years. In fact, in 2020 Schwab completed acquisitions of several companies, including Motif and TD Ameritrade. The company also acquired USAA's brokerage business. Existing USAA clients can consult Victory Capital for mutual funds, 529 college savings plans, and ETFs.
Methodology: How We Reviewed Charles Schwab
We use Personal Finance Insider's rating methodology for rating investment products to compare and examine pricing, account types, investment availability, platforms, and overall customer experience when reviewing brokerage accounts. Top brokerage firms offer different platforms for different investment needs. Some are the best brokerage accounts for beginners and others are ideal for more advanced investors. Charles Schwab brokerage account was evaluated with a focus on how it serves in each category.
How Charles Schwab Compares
Charles Schwab vs. Fidelity
Charles Schwab and Fidelity Investments cater to all types of investors and traders. Both offer self-directed accounts, retirement accounts, automated investing accounts, and much more. But the two diverge when it comes to investment products, fees, and educational resources.
While Fidelity's basic automated investing account, Fidelity Go, has a $0 minimum requirement, you'll need at least $5,000 to set up Schwab's equivalent account (Schwab Intelligent Portfolios Premium). However, Schwab Intelligent Portfolios makes up for its higher minimum by charging $0 in advisory fees. You may pay up to 0.35% for Fidelity Go.
Fidelity offers bitcoin and ether for trading and custody services, although it is significantly more limited in its crypto selection compared to other investment platforms. However, Fidelity is a better option for crypto trading compared to Charles Schwab as Schwab doesn't offer direct crypto trading.
Charles Schwab vs. Vanguard
Like Charles Schwab and Fidelity, Schwab, and Vanguard also dominate in the online brokerage space. You can find several account types — including self-directed brokerage accounts, IRAs, automated investing accounts, and custodial accounts — at both companies.
But Schwab has a wider range of offerings and platforms (e.g., its advanced StreetSmart Edge trading platform) for all types of traders. Plus, its advisor-managed account, Schwab Intelligent Portfolios Premium, has a lower account minimum requirement ($25,000) than Vanguard's equivalent (Vanguard Personal Advisor Services), which requires a minimum of $50,000.
In addition, options traders will pay more for contracts at Vanguard. Schwab has a $0.65 contract fee, while Vanguard charges $1.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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