Charles Schwab is a brokerage and banking platform, not a one-size-fits-all choice
Whether Charles Schwab is right for you depends on what you want to do with your money and how much hand-holding you need. Schwab is a real brokerage — you can buy and sell stocks, bonds, mutual funds, and exchange-traded funds (ETFs) — and it also offers banking products like checking accounts and savings accounts. It has no account minimums for most products, charges no commissions on stock and ETF trades, and offers educational content for people learning to invest. Those features work well for some people. For others, a different platform or a financial advisor might be a better fit.
The question "Is Schwab good?" really means "Is Schwab good for me?" This guide walks through what Schwab actually does, what it costs, and what kinds of investors and savers tend to find it useful.
Key Takeaways
- Charles Schwab charges no commissions on stock and ETF trades and has no account minimums, which makes it inexpensive to start investing with small amounts of money.
- Schwab offers both investing and banking services, so you can hold stocks and a checking account in one place, though you do not have to use both.
- The platform works best for people who want to pick their own investments or learn how to; if you want someone else to manage your money, a robo-advisor or financial advisor may be more useful.
- Schwab's customer service is available by phone, chat, and in-person at branch locations, which is unusual among online brokerages.
- You pay no trading commissions, but you do pay fees for certain services like wire transfers, and you earn interest on cash balances that varies with market conditions.
What you can actually do at Charles Schwab
Schwab lets you open a brokerage account to buy and sell investments, or a banking account to hold cash, or both. In a brokerage account, you can trade stocks, ETFs, mutual funds, bonds, and options. You can set up retirement accounts like IRAs and 401(k) rollovers. You can also open a regular checking account with a debit card and a savings account that earns interest.
The brokerage side has no commission on stock trades, ETF trades, or most mutual fund trades. The banking side offers no monthly maintenance fees on checking accounts and no minimum balance requirements. You can link your brokerage and banking accounts so money moves between them easily.
Schwab does not manage your money for you — you pick what to buy and sell. If you want a computer algorithm to manage your portfolio automatically, Schwab offers that as a separate service called Schwab Intelligent Portfolios, but it is optional. If you want a human financial advisor to manage your money, Schwab offers that too, but it costs more and is a different product.
Costs and fees you should know about
Stock and ETF trades cost nothing. Most mutual fund trades cost nothing. But Schwab does charge for some services. Wire transfers out of your account cost money — the amount varies depending on whether you are sending money domestically or internationally. Closing an account early does not cost anything. Certain investment products, like some mutual funds and bonds, may carry their own fees set by the fund or issuer, not by Schwab.
If you hold cash in a Schwab account, you earn interest on it. The rate changes based on what the Federal Reserve does with interest rates, so it is higher some years and lower others. Schwab publishes current rates on its website. You do not pay a fee to hold cash; the interest is just what the bank pays you.
If you use Schwab's advisory services — where a person or algorithm manages your investments — those come with separate fees, usually a percentage of the money you have invested. The basic Intelligent Portfolios service has no advisory fee, but Schwab Advisor Services does charge a percentage.
Who tends to find Schwab useful
Schwab works well for people who want to pick their own investments and do not mind learning how. If you already know what stocks or ETFs you want to own, or you are willing to research them, Schwab gives you a low-cost way to do that. The platform has educational articles, videos, and tools to help you research investments before you buy.
Schwab also works well if you want to keep your banking and investing in one place. You can deposit a paycheck into your Schwab checking account and move money to your brokerage account to invest, all without leaving the platform. This is convenient if you like having one login and one statement.
Schwab is less useful if you want someone else to make investment decisions for you. If you would rather have a financial advisor or a robo-advisor pick investments based on your goals and risk tolerance, you would be paying extra for that service at Schwab, or you might find a platform that specializes in it.
How Schwab's customer service compares
Schwab offers phone support, chat support, and in-person visits at branch locations. This is unusual — most online brokerages only offer phone and chat. If you have a question and want to talk to someone face-to-face, you can visit a Schwab branch. Phone support is available during business hours, and chat is available during extended hours.
Response times vary. During busy periods, you may wait on hold or in a chat queue. Schwab publishes average wait times on its website. The quality of support depends on the representative you reach, as with any company.
Schwab versus other brokerages
Other brokerages like Fidelity, E*TRADE, and TD Ameritrade also offer commission-free trading and low or no account minimums. The differences are usually in the details: which research tools they offer, how their apps work, what customer service looks like, and whether they offer banking services alongside investing.
Fidelity, like Schwab, offers both brokerage and banking services. E*TRADE focuses mainly on investing. TD Ameritrade (now being merged into Schwab) was similar to Schwab. If you are comparing platforms, the best approach is to look at what you actually plan to do — pick stocks, use a robo-advisor, trade options, or something else — and then see which platform makes that easiest for you.
What to consider before opening an account
Before you open a Schwab account, think about whether you want to pick your own investments or have someone else do it. If you want to pick your own, Schwab is worth considering. If you want professional management, compare Schwab's advisory services to other options.
Also think about what you want to invest in. If you plan to buy individual stocks, Schwab works well. If you plan to buy index funds or ETFs, Schwab works well. If you plan to trade options or futures, Schwab offers those, but you should make sure you understand how they work first.
Finally, consider whether you want banking and investing in one place, or whether you prefer to keep them separate. Some people like the simplicity of one account. Others prefer to use a bank for banking and a brokerage for investing. There is no wrong answer — it is about what works for your life.
Frequently Asked Questions
Does Charles Schwab have account minimums?
No. You can open a brokerage account or a banking account with no minimum deposit. You can start investing with as little money as you have, though some investments like certain mutual funds may have their own minimums set by the fund itself.
Can I use Schwab if I am just starting to invest?
Yes. Schwab has educational resources for beginners, no commissions on stock and ETF trades, and no account minimums. You can start with a small amount of money and learn as you go. The platform also offers a paper trading tool where you can practice buying and selling without real money.
Is my money safe at Charles Schwab?
Schwab is a registered broker-dealer and a bank, regulated by the SEC and the Federal Reserve. Cash in your account is insured by the FDIC up to $250,000 per account type. Securities like stocks and ETFs are held in your name and protected separately from Schwab's own assets.
What is the difference between Schwab's brokerage and banking accounts?
A brokerage account is for buying and selling investments like stocks and ETFs. A banking account is for holding cash and paying bills with a debit card. You can have both, and they can work together, or you can use just one.
Does Schwab charge fees for everything?
No. Stock and ETF trades are free. Checking accounts have no monthly fees. You only pay for specific services like wire transfers, or for investment products that carry their own fees. Most basic investing and banking at Schwab costs nothing.