Charles Schwab Review: Top Branch Broker

Charles Schwab is a consistent advocate of the individual investor, whether it's seasoned vets or beginners making their first trade. It has aggressively slashed fees on its mutual funds, removed common account fees, and eliminated its per-trade commissions, making it one of the most affordable places to open an account and trade stocks, ETFs, and funds.

In the Charles Schwab review below, we'll show you how the brokerage compares on commissions, fees, margin rates, trading platforms, and more.

Author's note: I've been investing for more than 20 years, and became a Schwab user after the acquisition of TD Ameritrade, which I've used since college. I'm a particularly big fan of the thinkorswim trading platform, which Schwab thankfully retained after moving all TD Ameritrade accounts to its platform. I invest in stocks, ETFs, and occasionally use options strategies in my portfolio, and Schwab is a solid choice for all of them.

Charles Schwab is one of our favorite brokerages. It ranks among the best brokers we've seen in these categories:

When it comes to a variety of investment choices and account types, Charles Schwab is a clear standout. Here's a quick rundown of what is available

Investments

• Annuities
• Automated investing (robo-advisor)
• Bonds
• CDs
• ETFs
• Foreign currencies (Forex)
• Futures
• Options
• Mutual funds
• Stocks

Brokerage accounts

• 529 savings plan
• Business accounts
• Coverdell ESA
• Custodial accounts (UGMA, UTMA)
• Individual (taxable)
• Joint brokerage account
• Rollover IRA
• Roth IRA
• SEP IRA
• SIMPLE IRA
• Solo 401(k)
• Traditional IRA

To be sure, Charles Schwab wasn't the first investment platform to offer commission-free stock trades, but it was the first big brokerage to eliminate commissions on online stock and ETF trades, and it certainly helped spark the commission-free revolution of late 2019. Nearly all of Charles Schwab's competitors followed suit, slashing commissions to zero.

Here are Charles Schwab's trading fees based on the type of investment:

Margin rates

As of May 2024, here are Charles Schwab's effective margin rates by margin balance:

Investors who use margin as a key part of their trading or investing strategy will find that Charles Schwab margin rates are toward the middle of the brokerage pack. It isn't a particularly cheap place to trade with margin, but the costs are in-line with most of its peers.

Whereas large wirehouse brokers have large research arms to supply their research internally, most discount brokers instead offer research from third-party services like Morningstar and S&P, for example. Below, we'll run through a few notable research and screening tools available to Schwab brokerage customers.

• Several equity research reports: Schwab has research from several major providers. Brokerage customers get access to Schwab ratings and research, plus access to research from Argus, Credit Suisse, Morningstar, MarketEdge, and Reuters, among others.
• Daily market reports: Tap into a wealth of information by reading daily market reports, including Credit Suisse First Edition, Morningstar Morning Notes, Market Edge Daily Commentary, and more from your online account.
• Screeners: Charles Schwab is no slouch when it comes to fundamental and technical screeners for stocks, ETFs, and funds. Notably, its screening tools are available on its website and through its SmartEdge desktop trading platform.

Most large discount brokers offer more research and screening tools than ever before. It's fair to say that if you wanted to spend hours each day reading stock market research or tinkering with screeners, you wouldn't run out of research to read or screeners to play with, a statement that applies to virtually any of the household-name discount brokers.

Schwab also offers an extensive library of educational resources. For example, if you want to learn the basics of options trading, or how to buy stocks that trade on international exchanges, Schwab has you covered.

This discount broker has several platforms aimed at different types of investors. Basic trading functionality is available through its web-based trading platform, and it also offers a mobile app that facilitates trading on the go.

In addition, Schwab offers the thinkorswim advanced trading and charting platform on both desktop and mobile. Schwab acquired this from TD Ameritrade in 2022 and has integrated it into the Charles Schwab platform. It's known for its charting, which helps traders make data-informed investing decisions, especially options trades.

As long-term buy-and-hold investors, we don't actively trade in our accounts and therefore don't need many of the bells and whistles. If a robust platform is especially important to you, we'd recommend using a demo account to try Schwab's platforms out for yourself.

App

Schwab's mobile app is among the best available from a big brokerage house. It has an iOS rating of 4.8 out of 5 stars. While its Android rating of 2.3 out of 5 stars is lower than average, our research has found the ratings aren't aligned with the apps high quality overall. Many brokerage apps are slimmed down, less versatile versions of their online experiences. But Schwab's apps closely mirror its robust online experience, including for trading, account access and management, and banking.

Discount brokers can offer cutthroat commission prices because they eliminate many of the expenses associated with traditional brokerages. But big brokers still provide all the customer service you might need, whether over the phone, online, or through a branch office.

Schwab offers 24/7 support over the phone, as many discount brokers do. But thanks to its vast brick-and-mortar branch network, customers can also get help in person at offices scattered across the U.S. It has more than 340 branches in 46 states, so the vast majority of Americans live within a short drive of one of its offices.

Here are the various ways you can contact Schwab's customer service:

• Phone line open 24/7 to speak with an account specialist
• Live text chat with a specialist is available when logged in to your account
• In-person help at any of Schwab's 340 branches

Schwab uses some of the most advanced methods in the industry to keep client accounts secure. While accounts are protected by SIPC insurance in the event of the firm's failure, just like any other brokerage account, Schwab takes things a step further and guarantees that the firm will cover any losses due to unauthorized activity in your account.

Charles Schwab (the person) started an investment newsletter in 1963 and formed a broker-dealer securities business in 1971.

The company's current form truly began in 1975, when the SEC de-regulated brokerage commissions. Schwab did the opposite of what most full-service brokerage firms were doing and decided to create the first discount brokerage. It has achieved several other industry firsts along the way, such as the first 24-hour quotation service and the first 24/7 order entry interface.

Schwab ended up being acquired by Bank of America in 1983, but management bought the company back in 1987 and completed an IPO the same year. The company's discount model grew rapidly in popularity, and today Schwab is one of the largest brokerage firms in the world, with $8.85 trillion in client assets.

Keep reading about Charles Schwab on these pages:

At The Motley Fool Ascent, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and account types; however, we also take into account features like research, education, tax-loss harvesting, and highly rated mobile apps. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.

See our full methodology here: Ratings Methodology