Charles Schwab review 2024: A comprehensive look at its investment services

Our Verdict

Our Verdict

Charles Schwab is a comprehensive online brokerage with a range of services tailored to investors of all levels. Their platform offers a basic web-based investing option, along with a more advanced desktop platform for active traders. They excel in customer service and provide extensive in-house research, including their own investment ratings.

Pros

• Availability of ESG ETFs
• Robo-advisor and AI capabilities
• Strong ETF research tools and scanners
• Commission-free trading for stocks and ETFs
• Diverse platform options cater to a wide range of customers

Cons

• Lack of fractional-share ETF trading
• Margin rates are comparatively high
• Low interest rates on uninvested cash
• No direct access to cryptocurrency investments

4.5

Our ratings take into account a product's cost, features, ease of use, customer service and other category-specific attributes. All ratings are determined solely by our editorial team.

Starting price

No minimum

Fee to buy Amazon stock

Spread-only

Pricing system

Commission-free trading on U.S.-listed stocks, ETFs, and options, as well as on Schwab mutual funds.

Who would benefit from choosing Charles Schwab?

Charles Schwab appeals to a wide range of investors with its user-friendly web-based platform and advanced desktop option for active traders. Their exceptional customer service and extensive in-house research, complete with a proprietary investment rating system, set them apart in the online brokerage space.

Despite its strengths, Charles Schwab does have some limitations. The platform does not support cryptocurrency or forex trading, and trading futures requires accessing a separate platform, adding complexity. Additionally, customizing the desktop platform can be time-consuming.

Overall, Charles Schwab is a solid choice for most investors, including active traders who are willing to invest the time to maximize the platform's capabilities.

Charles Schwab commissions and fees

Charles Schwab offers competitive trading commissions, including free online trades for stocks, ETFs, preferred stocks, REITs, Treasuries, and thousands of mutual funds through Schwab Mutual Fund OneSource. They do charge fees for other investments, such as options, futures, bonds, CDs, and mutual funds not part of Schwab Mutual Fund OneSource.

The brokerage discloses that it accepts payment for order flow, a practice that some argue may result in customers receiving less favorable prices for securities. However, Charles Schwab emphasizes that client trade execution is their top priority, ahead of potential rebates for order flow.

Margin rates for borrowing investments are middle-of-the-pack, starting at 8.325% for loans up to $25,000 and decreasing with higher borrowing amounts. While competitive with large brokers like Vanguard and Merrill Edge, Charles Schwab's rates are surpassed by some online brokers like Interactive Brokers and Robinhood.

In terms of account fees, Charles Schwab is competitive, with no monthly maintenance or inactivity fees, no minimum balance requirement, and no fees for transfers to outside accounts, checks, or mobile deposits. Other minor fees include a $25 wire transfer fee and a $39 security reorganization fee.

Charles Schwab platform and technology

Charles Schwab provides flexible trading platform options, including a simple web-based platform for basic trades and research. This platform offers real-time market data, filtering options, expert ratings, fundamental research, and basic price charts.

For more advanced trading and research needs, Charles Schwab offers StreetSmart Edge, available as a downloadable desktop tool or through a dedicated online web portal. This platform provides sophisticated trading capabilities and research tools, such as advanced charting, watch lists, high/low tools, and an options trading module.

One of the strengths of the Charles Schwab platform is its customization. While initially simple, you can tailor the platform to your strategies as your trading skills develop, enhancing its functionality.

However, if you're interested in trading futures, you'll need to use the separate StreetSmart Central platform, which can be cumbersome for traders who switch between futures and other asset classes.

The Charles Schwab mobile app is more basic, offering essential features like placing trades, monitoring accounts, checking market news, and viewing basic charts. Additionally, the app includes the Schwab Assistant trading tool, allowing users to make trades, receive quotes, and get answers to investment questions via voice commands.

Charles Schwab range of offerings

Charles Schwab offers a wide range of tradable assets, including stocks, bonds, ETFs, mutual funds, options, futures, penny stocks, and fractional shares of S&P 500 stocks. They excel in their selection of zero-commission mutual funds through the Schwab Mutual Fund OneSource program.

For investors interested in international markets, Charles Schwab provides access to equity trading in over 30 foreign markets and the ability to trade using seven different currencies in 13 foreign markets.

In addition to investment options, Charles Schwab offers cash management services that allow you to earn interest on your uninvested balance. They also provide access to investment advisors, including in-person support at their 300 branches nationwide.

However, there are a few areas where Charles Schwab's offerings are lacking. They do not offer forex trading or direct investments in cryptocurrencies. Clients seeking exposure to cryptocurrencies can explore trading Bitcoin futures or investing in trusts that target cryptocurrencies, such as Grayscale.

Charles Schwab research and education

The Charles Schwab website offers a diverse range of research and educational resources created by a team of experts in financial planning, investment, trading, and tax. They regularly publish articles, infographics, slideshows, and videos covering the latest market news and trends. Additionally, their knowledge center features numerous educational articles on topics such as investing, estate planning, insurance, and saving for college.

In addition to these resources, Charles Schwab produces several financial podcasts, publishes a magazine, and hosts live webinars where clients can ask trading questions. Their local branches also organize in-person events and seminars.

However, one resource that Charles Schwab does not offer is paper trading, a feature provided by other leading brokerages that allows users to test new trading techniques without using real money.

Charles Schwab customer service and security

Charles Schwab provides customer service around the clock via phone and live chat, with additional support available through email or in-person visits to their local branches. In our evaluation, Charles Schwab demonstrated outstanding customer service, with quick response times and knowledgeable representatives.

Their phone service was particularly impressive, with short wait times to connect with a live representative who efficiently addressed our inquiries. To access phone support, you'll need to provide your account number or Social Security number, and they also employ voice recognition technology for added security.

Live chat support was similarly efficient, with prompt responses to our questions. While email responses took a bit longer, ranging from a few hours to up to three days, the quality of the replies was consistently high.

In terms of account security, Charles Schwab offers robust measures. In addition to voice recognition for customer service calls, they utilize firewalls, two-factor authentication, 128-bit encryption, and mobile security features. Clients also benefit from the standard $500,000 of Securities Investor Protection Corporation (SIPC) insurance, along with an additional $150 million of insurance for investments and $1.15 million for cash through Lloyd’s of London and other insurers. Moreover, Charles Schwab provides 100% coverage against losses in your account due to unauthorized trades.