Charles Schwab review: A one-stop shop for all types of investors

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• Charles Schwab offers low-cost index funds and ETFs with no account minimums or maintenance fees.
• Schwab charges $0 commissions on stock, ETF, or options trades, and offers free fractional trading.
• Schwab’s Intelligent Portfolios robo-adviser is free and offers automatic rebalancing and more.
• See Business Insider’s picks for the best online brokerage »

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Is Charles Schwab right for you?

Editor’s rating	4.9 out of 5
Fees	0% ($0 Schwab Intelligent Portfolios; $30/month Schwab Intelligent Portfolios Premium)
Account minimum	$0 ($5,000 for Schwab Intelligent Portfolios; $25,000 Schwab Intelligent Portfolios Premium)
Promotion	Get up to $500 when referred by an existing Schwab user.
Open account

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).

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 over 350 physical branches scattered throughout the United States.

Today, it manages $6.9 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.

Min. Investment $0; $5,000 Schwab Intelligent Portfolios ($25,000 Schwab Intelligent Portfolios Premium)	Min. Investment $0 ($100 for automated advice)	Min. Investment $0 ($3,000 Vanguard Digital Advisor and $50,000 Vanguard Personal Advisor Services)
Fees 0% ($0 Schwab Intelligent Portfolios; $30/month Schwab Intelligent Portfolios Premium)	Fees 0% (bonds, mutual funds, and other securities have trading fees)	Fees 0%; 0.15% to 0.30% for professionally managed portfolios ($20 annual account service fee for brokerage accounts and IRAs)
Investment choices Stocks, ETFs, options, futures, mutual funds, money market funds, bonds, and annuities	Investment choices Stocks, ETFs, options, bonds, mutual funds, and forex	Investment choices Stocks, ETFs, bonds, mutual funds, CDs, Vanguard ESG funds, cash options
Open an account	Open an account	Open an account

Low-cost index funds and ETFs

Savvy DIY investors love searching 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. Its 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 investing 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 sell transaction-fee funds as well. And if you decide to purchase one of these funds, it could cost you up to $49.95 per buy (all of Schwab’s mutual funds are free to sell). That’s pretty expensive, so I would recommend avoiding these funds if possible.

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.

Commission-free trades

In October 2018, Schwab announced that it would begin offering commission-free trading on all stocks, ETFs, and options. This was a huge announcement that forced other discount brokers to offer free trades to their customers to stay competitive.

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.

Fractional share investing

On May 5, 2020, Charles Schwab announced a brand new product called Schwab Stock Slices, which went live on June 9. With Stock Slices, you can 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. Well, at the time of this writing, one full share of Amazon would set you back over $3,000. You may not have that much to invest right now. Or even if you had, say, $3,400 to invest, putting $3,000 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.

Wealth management

Charles Schwab offers a large variety of options if you’re looking for investing 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.

Second, if you’d like Schwab to build your portfolio for you, you can use its robo-advisory service called Schwab Intelligent Portfolios. Schwab Intelligent Portfolios will choose a custom blend of ETFs for you that lines up with your target asset allocation and offers automatic rebalancing and tax-loss harvesting.

Besides the $5,000 minimum account size requirement, Schwab’s Intelligent Portfolios robo-adviser service is mostly free. There is no advisory fee and there are no commissions. However, if you’d like to add unlimited access to a Certified Financial Planner (CFP), you’ll need to sign up for the Premium tier, which costs $30 per month and includes a $300 one-time planning fee. Schwab Intelligent Portfolios Premium also comes with a minimum balance requirement of $25,000.

Finally, if you have complicated wealth management needs, Schwab can connect you with a local adviser near you via its Schwab Adviser Network. With Schwab’s Private Client service, you can get a dedicated team to build and maintain your portfolio. You’ll need at least $500,000 in investments to be eligible for Schwab Private Client and the advisory fees start at 0.80%.

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 as well.

Both the main Schwab mobile app and StreetSmart are available on the Google Play and Apple devices. You can login with your Schwab username and password. Or for extra security and convenience, you can log in using your fingerprint or Face ID.

Multiple account types

In addition to taxable accounts, Charles Schwab offers a large variety of specialty accounts. For starters, here are all of Schwab’s retirement account options:

• Traditional IRA
• Roth IRA
• SEP IRA
• SIMPLE IRA
• Rollover IRA
• Custodial IRA
• Individual 401(k)

You can also open a 529 college savings plan or education savings account with Charles Schwab. And each of the account types listed above come with no account minimums and no opening or ongoing maintenance fees.

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 opinion of how well a company interacts with its customers.

BBB ratings don’t imply that a company will perform well or be reliable. Therefore, it’s wise to conduct your own research in addition to the bureau’s findings.

In 2011, the United States Securities and Exchange Commission (SEC) charged both Charles Schwab Investment Management and Charles Schwab & Co., Inc. with providing misleading information about its YieldPlus Fund and for failing to enforce certain fund policies. The company agreed to pay more than $118 million to settle the charges.

The app also faced some backlash after it temporarily limited trading of Gamestop (GME) as Reddit users upended the market. Charles Schwab has closed 74 complaints in the last 12 months, according to BBB data.

Who should use Charles Schwab?

It’s difficult to find any major weaknesses in Charles Schwab’s product offerings or prices. Read any other reviews of Charles Schwab, and you’ll find that other writers have had a hard time identifying an investing need that Schwab isn’t able to meet.

But, if anything, Schwab’s weakness might be the very fact that it does try to handle the needs of every investor. In other words, the sheer amount of options and tools could be overwhelming for someone who’s new to this whole investing thing.

For example, while Schwab does have a robo-advisory service, it’s just one of dozens of products. And it may take you months or years to even discover that it exists. There are plenty of brokers that instead choose to specialize in particular areas, such as offering day trading tools, low-cost index funds, or robo-advice.

If any of those things are what you’re looking for in an investing platform, you may prefer one of these types of specialized brokers. But, as long you’re OK with doing a little digging, Schwab has all the investing options you might want at industry-leading prices you’ll love.

Clint Proctor is a freelance writer and founder of WalletWiseGuy.com, where he writes about how students and millennials can win with money.

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