Name: Charles Schwab
Brand: Charles Schwab

Charles Schwab is a consistent advocate of the individual investor, whether it's seasoned vets or beginners making their first trade. The brokerage 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 this Charles Schwab review, we'll look at how the brokerage compares on commissions, fees, margin rates, trading platforms, and more.

Ratings Methodology

Charles Schwab

Our Rating:

Rating image, 4.5 out of 5 stars.

4.5/5

Bottom Line

Charles Schwab pioneered the low-cost brokerage model decades ago, and that legacy continues with its lineup of no-commission-fee offerings. The robust lineup of account types, investment vehicles, and high quality app round out the stacked feature set.

Fees:

$0 stock, ETF, and Schwab Mutual Fund OneSource® trades. No fees to buy fractional shares.

Account Minimum:

$0

Alternatives to Consider

We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.

Broker	Best For	Commissions	Learn More
Rating image, 4.0 out of 5 stars. 4.0/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	Easy fractional investing in stocks and bonds.	$0 commissions, 1%-2% crypto markups	Learn More for Public On Public's Secure Website.
Rating image, 4.0 out of 5 stars. 4.0/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	Low mutual fund fees.	$0 per trade	Learn More for J.P. Morgan Self-Directed Investing On J.P. Morgan Self-Directed Investing's Secure Website.
Rating image, 4.5 out of 5 stars. 4.5/5 Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor.	Long-Term Investors, Stocks and Options Traders	Commission-free; other fees apply	Learn More for ETRADE On ETRADE's Secure Website.

Charles Schwab review: The highlights

Before I moved my investments to a Solo 401(k) at another brokerage, and my husband went all-in on his employer's 401(k) plan, Schwab was our broker. It's been years since we made the switch, but that doesn't mean I've cut Schwab out of our lives. I've been infatuated with Schwab's fractional shares for the past few years.

$Schwab trading fractional shares screenshot$

Trading fractional shares

There was a time when the smallest investment you could make in a company was to buy a single share of its stock. The practice effectively blocked a huge swathe of people from investing in companies with valuable shares. Enter fractional share investing.

Schwab fractional shares are called Schwab Stock Slices™, and I can't tell you how surprised I've been by how easy the broker has made it to take part in the stock market without spending a small fortune.

As someone who spends her days explaining financial theories, it's been fun to see how seamlessly Schwab walks investors through the process. The broker manages to explain how it all works in a way that even the most novice investor understands.

The advantage of simplicity

To give you an idea of how easy the platform is to dive into, my three granddaughters each had their own Schwab accounts before the age of 5. They would sit with their fathers and scroll through their options, stopping only when a company name popped up that appealed to them.

They were naturally interested in companies with recognizable names, like Target or Disney, but that's okay. No matter where they've chosen to invest their allowances, they've learned about the power of compound interest and how closely risk is related to reward. Now that they're getting a little older, they're also learning about keeping investment costs low -- and that's where Schwab shines.

Finding investments

For a time, my granddaughters' Schwab portfolios performed so well that I copied whatever they bought. However, I've figured out how much fun it is to go my own way. I particularly appreciate that I don't have to wade through a lot of noise to find the information I need to make a solid decision.

As mentioned, my granddaughters gravitate toward companies they're familiar with. Their next step is to ask their dads to help them research that company's overall performance.

It may not be such a bad approach. After all, if a kid recognizes a company, it's probably doing pretty well.

Schwab has managed to compile an extensive menu of research tools without muddying the waters. It's easy to plug in the name of a company you're curious about and find the details needed to help you make an informed decision. The cool part is you don't need an advanced degree in economics to understand Schwab reports.

Let's say I'm trying to decide what to invest in next. One simple tool allows me to choose up to five stocks and/or indexes, and up pops a table that compares them side-by-side. Here's a small sample of what that single comparison table tells me:

Current price
5-year projected growth
Schwab's rating, along with ratings from companies like Morningstar and Argus
Description of past growth
Total dividend yield average
Gross profit margin
Financial strength of each company

These examples barely scratch the surface of the in-depth information I need to make an educated decision. Equally as impressive, the information is broken down in a way that even a first-time investor can understand.

In an old TV show called Dragnet, the lead character's famous catchphrase was "Just the facts, ma'am." And that's what Schwab gives me -- just the facts. I don't have to wade through pages of dry yet confusing statistics because Schwab breaks it down for me.

Monitoring portfolio performance

As someone who always feels slightly rushed, I appreciate the ability to quickly glance at my portfolio and know how many winners and losers I'm rocking. Schwab Slices™ spells it out in the most basic, easy-to-understand way possible.

Who would like Schwab?

Most of my personal Schwab experience has been with Schwab Slices™ -- and they're pretty great, but may not be for everyone. Schwab might be best for:

Someone looking to get their feet wet and learn more about trading.
A person hoping to become confident enough to make larger trades.
Kids learning about the power of investing and compound interest. While a parent officially "owns" the account, it's an excellent way for a child to learn while having fun.

If this all seems silly, you're probably better off sticking with whole stock shares (which Schwab also offers!). There's more risk involved, but there's also more reward.

Investment offerings

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

TIP

Other financial services

Schwab also offers several banking products and services beyond its brokerage platform:

Checking accounts
Savings accounts
CDs
Home loans
Credit cards (offered through American Express)

Commissions and fees

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 self-directed trading fees based on the type of investment.

Investment type or service	Commission/fee
Stocks and ETFs	$0
Options	$0.65 per contract
Mutual Funds	Up to $74.95 (thousands for free)
Futures	$2.25 per contract
Cryptocurrencies	Not available

Data source: Charles Schwab.

Margin rates

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

Margin balance	Margin rate
Less than $25,000	12.825%
$25,000 - $49,999	12.325%
$50,000 to $99,999	11.375%
$100,000 to $249,999	11.325%
$250,000 to $499,999	11.075%
$500,000 or more	Call 877-752-9749 for rate details

Data source: Charles Schwab.

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.

Charles Schwab promotions

Charles Schwab sometimes offers promotions that could save you money. Click below to go to our dedicated page covering current Charles Schwab promotions:

Charles Schwab Promotions

Research and education

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. Here are 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 from your online account. Offerings include Credit Suisse First Edition, Morningstar Morning Notes, Market Edge Daily Commentary, and more.

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. 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.

Interface

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, I don't actively trade in my account and therefore don't need many of the bells and whistles. If a robust platform is especially important to you, I'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 app's 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.

Customer service

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 when logged in to your account
In-person help at any of Schwab's 340 branches

Security

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.

About

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 deregulated 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 since then, 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.

Learn more about Charles Schwab

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Review sources

Our brokerage rating methodology

At Motley Fool Money, 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

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I Tried Charles Schwab: My Full Review