Charles Schwab does not charge per-trade commissions for stocks, ETFs, or options, but you may pay other costs depending on what you trade and how you trade it

Charles Schwab eliminated commission fees on stock and ETF trades in 2019 and extended that to options trades in 2020. This means you can buy or sell individual stocks, exchange-traded funds, and options contracts without paying a per-trade fee to Schwab itself. However, "no commission" does not mean "no cost." You may still encounter spreads, exchange fees, regulatory fees, and other charges depending on your account type and what you're trading.

The absence of commissions applies to trades placed through Schwab's standard platforms — the web platform, the Schwab mobile app, and StreetSmart Edge (Schwab's active trader platform). It also applies whether you place a market order, a limit order, or any other order type. The zero-commission structure is one reason Schwab became competitive with other brokers after 2019, when most major brokers followed suit.

Key Takeaways

  • Schwab charges no commission on stocks, ETFs, or options trades, but you still pay the bid-ask spread (the difference between buying and selling prices) on every trade.
  • Options trades carry an additional regulatory fee of $0.65 per contract, set by the Options Clearing Corporation, not by Schwab.
  • Mutual funds sold by Schwab itself (Schwab Funds) have no transaction fee, but mutual funds from other companies may carry transaction fees ranging from $0 to $49.95 per trade.
  • Margin accounts, cash management accounts, and accounts holding certain investments may carry monthly or annual fees separate from trading costs.
  • Schwab charges inactivity fees on some account types if you do not place trades or maintain a minimum balance for extended periods.

Costs you will encounter on every stock and ETF trade

The bid-ask spread is the primary cost you face on every stock or ETF trade, even though Schwab does not collect it directly. The spread is the difference between what buyers are willing to pay (the bid) and what sellers are asking (the ask). When you buy a stock, you pay the ask price; when you sell, you receive the bid price. That gap is money that goes to market makers and other liquidity providers, not to Schwab, but it is a real cost to you.

The size of the spread varies by stock. Highly traded stocks like Apple or Microsoft typically have narrow spreads of a penny or two per share. Lightly traded stocks, penny stocks, or stocks trading during market hours with low volume may have spreads of several cents or more. On a 100-share purchase of a stock with a 5-cent spread, you lose $5 to the spread alone before any other factors.

You do not pay this spread to Schwab, so it does not appear as a line item on your statement. It is built into the price you see when you place an order. Understanding spreads matters because they are often larger than the commissions brokers charged before 2019, especially on smaller trades or less liquid securities.

Options trading fees and regulatory charges

Options trades carry no commission from Schwab, but the Options Clearing Corporation (OCC) charges a regulatory fee of $0.65 per contract. This fee is set by the OCC, not by Schwab, and applies to every options contract you trade — whether you are buying or selling a call, put, spread, or any other strategy. On a 10-contract trade, that is $6.50 in regulatory fees alone.

Like the bid-ask spread on stocks, the OCC fee does not go to Schwab. It is a pass-through cost that Schwab collects and remits to the OCC. You will see it itemized on your trade confirmation and on your account statements. Some brokers advertise "free options trading" but still charge the OCC fee; Schwab is transparent about this charge.

Options also carry bid-ask spreads, just like stocks. The spread on an options contract is often wider than the spread on the underlying stock, especially for less-traded options or options with longer expiration dates. A spread of $0.05 to $0.10 per contract is common, and wider spreads are typical for less liquid options.

Mutual fund trading and transaction fees

Schwab's own mutual funds — branded as Schwab Funds — have no transaction fee when you buy or sell them through a Schwab account. Schwab offers a range of index funds and actively managed funds under this label, and trading them costs nothing beyond the fund's internal expense ratio.

Mutual funds from other companies (called "third-party" or "non-Schwab" funds) may carry transaction fees when you trade them through Schwab. These fees range from $0 to $49.95 per transaction, depending on the fund company and the fund itself. Schwab publishes a list of mutual funds with no transaction fee, but many funds do carry a fee. Before buying a mutual fund through Schwab, check the fund's transaction fee on Schwab's website or in the fund's prospectus.

Mutual funds also have internal costs called expense ratios, which are charged annually as a percentage of your holdings. These are separate from transaction fees and explore whether you hold the fund for one day or ten years. A fund with a 0.05% expense ratio costs $5 per year on a $10,000 holding; a fund with a 1.00% expense ratio costs $100 per year on the same holding.

Account fees and inactivity charges

Most standard Schwab brokerage accounts (individual, joint, IRA, and so on) have no monthly or annual account fee. However, some account types do charge fees. Schwab's Institutional Investor Account and certain advisory accounts may carry annual fees. Schwab also offers managed account services and robo-advisor services that charge advisory fees separate from trading costs.

Schwab charges an inactivity fee on some accounts if you do not place a trade or maintain a minimum balance for a set period. The specifics vary by account type and change over time, so check your account agreement or contact Schwab directly to learn whether your account is subject to an inactivity fee and what the threshold is.

Margin accounts (accounts that allow you to borrow money to trade) charge interest on borrowed funds. This is not a trading fee but a financing cost. The interest rate varies based on the amount you borrow and current market rates, and it accrues daily on your account statement.

Wire transfer and account maintenance costs

Schwab does not charge for incoming wire transfers, but outgoing domestic wire transfers typically cost $25. International wire transfers cost more. These are not trading fees, but they are costs you may encounter when moving money in or out of your account.

Schwab also charges fees for certain account services: closing an account early, requesting paper statements, or obtaining copies of old documents may carry fees. Most of these are not trading-related, but they are worth knowing about if you plan to use Schwab's services beyond basic trading.

Some Schwab accounts offer cash management features (like sweep accounts that move uninvested cash into money market funds). These accounts may carry monthly fees or interest-rate terms that differ from standard brokerage accounts. Review the terms of your specific account type to understand what fees explore.

How Schwab's costs compare to other brokers

Most major brokers — Fidelity, E*TRADE, TD Ameritrade, and others — also charge zero commissions on stocks, ETFs, and options. The bid-ask spread and OCC regulatory fee are unavoidable across all brokers because they are market-wide costs, not broker-specific charges. The real differences lie in mutual fund transaction fees, account fees, and the quality of research and trading tools each broker provides.

Some brokers charge higher mutual fund transaction fees than Schwab; others charge lower ones. Some brokers have higher margin interest rates or charge more for wire transfers. Schwab's strength is in its research tools, educational resources, and customer service, which are included at no extra cost. If you are comparing brokers purely on trading costs, the commissions are now equal, but the other fees and services differ.

Frequently Asked Questions

Do I pay anything when I buy or sell a stock on Schwab?

You pay no commission to Schwab, but you pay the bid-ask spread — the difference between the buying price and the selling price. On a stock with a 1-cent spread, that might be $1 on a 100-share trade. On a less-traded stock with a 10-cent spread, it could be $10. The spread is not a Schwab fee; it goes to market makers.

What is the $0.65 charge I see on my options trades?

That is the Options Clearing Corporation regulatory fee, set by the OCC and charged per contract. Schwab collects it and passes it to the OCC. It appears on every options trade you make, regardless of whether you are buying or selling. It is separate from the bid-ask spread on the option itself.

Why do some mutual funds have a transaction fee and others don't?

Schwab's own mutual funds (Schwab Funds) have no transaction fee. Mutual funds from other companies may carry fees set by the fund company, ranging from $0 to $49.95 per trade. Schwab publishes a list of no-transaction-fee mutual funds, but you should check before buying any fund outside that list.

Does Schwab charge a monthly fee just for having an account?

Most standard Schwab brokerage accounts have no monthly or annual fee. Some specialized accounts (like managed accounts or advisory accounts) do charge annual fees. Check your account agreement or contact Schwab to confirm whether your account type carries a fee.

Are there any hidden costs I should know about?

The main costs are the bid-ask spread (unavoidable on every trade), the OCC fee on options (unavoidable and transparent), and mutual fund transaction fees (listed before you buy). Margin interest, wire transfer fees, and inactivity fees are less common but possible depending on your account type and activity. Review your account agreement for the full list.