CHARLES SCHWAB REVIEW 2023: SHOULD YOU SIGN UP WITH THE BROKER?

In 1971, Chuck Schwab founded Charles Schwab as a traditional broker with an investment newsletter. Four years later, in 1975, he recognized an opportunity to create a new brokerage business.

Due to new SEC regulations, Chuck decided to have a customer-focused approach, centering around client savings and excellent customer service. The company saw massive growth as time passed and started NYSE listing in 1981.

Charles Schwab homepage

Fast-forward to 2020: Charles Schwab acquired TD Ameritrade. So, I hope you liked that quick history lesson. Let’s move to where Schwab is now. The company currently has 30 million customers and over 350 locations around the US. Did you know Schwab has a revenue of $18.52 billion as of 2021?

That revenue certainly caught the eye of several major publications, further expanding its visibility. It has earned several accolades from Investors Business, Nerd Wallet, and Stockbrokers.com.  Most US brokers don’t allow traders from other countries. However, you are in luck with Charles Schwab, which offers trading services to more than 30 countries.

When you scroll to the bottom of the homepage, you can find the broker’s regulations. Charles Schwab has regulations from SIPC (Securities Investor Protection Corporation). Some may think, “Oh, just from one regulatory body?” Well, SIPC is a federal-mandated US regulatory body, meaning its authorization carries a lot of weight.

Charles Schwab regulations

Charles Schwab provides plenty of tradeable assets. Stocks, ETFs, Mutual Funds, Futures, Options, and Bonds are all available. Let’s talk a bit about the assets.

Stocks

• Amazon
• Apple
• AT&T
• Bank of America and 3000 other US stocks
• 12 Global markets stocks.

ETFs

• Invesco
• BlackRock
• Vanguard
• iShares, and 2000 more.

Mutual Funds

• Vanguard 500 Index
• Fidelity 500
• JP Morgan Market Fund
• Goldman Sachs, and 4000 more.

Bonds 

• US Treasury
• Municipal
• Corporate and more.

Unfortunately, Charles Schwab doesn’t provide forex pairs or crypto trading. However, you can invest in crypto through

• Crypto ETFs
• Crypto Coin Trusts
• Crypto Stocks
• Bitcoin Futures

Also, you get your hands on fractional shares — instead of buying a whole share of stock, you can buy a fraction. It is a “slice” of stock representing a portion of a share for as little as $5. I love fractional shares, as I can tap into stocks like Amazon and others with low deposits.

Charles Schwab products page

The broker provides commission-free trading of stocks and ETFs. For all other products, fees are

• For Options: $0.65 per option contract
• For Futures and futures options: $2.25 per contract fee
• For Bonds, $1 per bond, $10 minimum fee and $250 maximum fee per trade
• For Mutual funds: up to $49.95 depending on the fund
• For Broker-assisted trades: $25 service fee per transaction

Charles Schwab charges an average margin rate of 8.75%, ranging from 10.57% for accounts with less than $25,000 to 8.82% for those with more than $250,000. Some other brokers I reviewed, like E*Trade or TD Ameritrade, have lower margin rates.

Charles Schwab offers three trading platforms. They are

• StreetSmart Edge®
• Schwab.com
• Mobile app.

Let’s talk about them.

STREETSMART EDGE®

StreetSmart Edge® is the firm’s native trading platform. The StreetSmart Edge platform includes more advanced trading and research features, including

• advanced charting,
• watch lists, and
• high/low tools.

It also consists of an options trading module that can help you develop ideas and estimate the risk/reward of various contracts. When I first traded on the StreetSmart Edge, I liked it. It has everything I need as a trader, and the customization options make for a smooth trading experience.

StreetSmart Edge platform

SCHWAB.com

Shwab.com is a simple web-based platform. The platform makes it simple to execute trades and undertake basic research. Scwab.com gives real-time market data and the ability to choose investments based on your goals. It also offers expert evaluations, fundamental analysis, and basic price charts.

Schwab.com platform

MOBILE APP

Charles Schwab’s mobile app allows you to keep track of your portfolio and access real-time prices and market news. You can trade stocks, ETFs, options, and mutual funds using it.

Charles Schwab mobile app

WHAT TRADING INDICATORS ARE AVAILABLE?

As an active trader, you will need to use technical indicators to boost your trading success. Charles Schwab has plenty of trading indicators across all platforms. Some of the available indicators are:

• Support and Resistance
• Trendlines
• Volume
• Bollinger Bands
• Moving Averages, and many more.

Charles Schwab offers 12 account types. Yes, you read it right! The account types are astonishing. They are

• Brokerage & Trading
• Retirement
• Education and Custodial
• Charitable Giving
• Lending
• Small Business Retirement
• Checking and Savings
• Robo and Dedicated Advice
• Credit Cards
• Annuities
• Trust and Estate
• Insurance.

Some of these accounts are part of banking, while others are part of brokerage services. So, let me break it down for you.

1. BROKERAGE & TRADING

This is Charles Schwab’s trading account. The account has different levels:

• Schwab One Brokerage Account
• Brokerage Account + Specialized Platforms and Support for Trading
• Global Account
• Organization Account.

The Schwab One account is the simplest account type, most suitable for beginners. You can open every type of brokerage account with $0. However, if you want to trade on margin, you need a minimum deposit of $2000.

2. RETIREMENT

If you’re thinking of investing for your future, you can open a retirement account with Charles Schwab. It has the following account levels:

• Roth IRA
• Traditional IRA
• Rollover IRA
• Inherited IRA
• Custodial IRA
• Beneficiary IRA
• Personal Choice Retirement Account.

There is no minimum initial deposit required to open an account.

3. SCHWAB BANK CHECKING & SAVINGS

The Schwab Bank checking and savings accounts have the following levels

• Schwab Bank High Yield Investor Checking® Account
• Schwab Bank High Yield Investor Savings® Account.

Both accounts come with FDIC insurance of up to $250,000. There are no minimums or monthly fees for these accounts.

4. ROBO & DEDICATED ADVICE

Charles Schwab has plenty of options if you want to automate your investing. The levels include:

• Schwab Intelligent Portfolios Premium
• Schwab Intelligent Portfolios
• Schwab Wealth Advisory
• Schwab Advisor Network
• Managed Accounts.

If you’re searching for a Robo-advisor to manage your portfolio, the company’s Schwab Intelligent Portfolios service can help. And the best part: There is no management fee. If you want more specialized support from a trained professional, you can pay a very low monthly charge.

5. EDUCATION AND CUSTODIAL

You can start a tax-advantaged education fund with the education and custodial accounts. There are three types:

• 529 College Savings Plan
• Education Savings Account
• Custodial Account

6. CHARITABLE GIVING

Thanks to Schwab’s charitable account, you can give charity with proper tax management. The account manages all of the recordkeeping and tax reporting for you.

7. LENDING

The lending gives you multiple refinancing options for your mortgage or other loans. The different levels of the lending account include:

• Mortgage
• Refinance
• Home Equity Line of Credit (HELOC)
• Pledged Asset Line (PAL)

8. SMALL BUSINESS RETIREMENT

If you want to start a small business after retirement, you can work with Schwab’s multiple small business retirement accounts. The types of these accounts are

• Individual 401(k) Plan
• SEP-IRA
• SIMPLE IRA
• Personal Defined Benefit Plan
• Business 401(k) Plan
• Company Retirement Account

9. CREDIT CARDS

The credit account is part of the Charles Schwab business corporation, and issues American Express credit cards.

10. ANNUITIES

You can open an annuities account if you want a steady income stream until retirement. The various levels of annuities involve:

• Variable Annuities
• Fixed Indexed Annuities
• Single Premium Immediate Annuities
• Deferred Income Annuities
• Fixed Deferred Annuities

11. TRUST AND ESTATE

Schwab has three accounts which allow easier estate management while also allowing you to pay taxes:

• Schwab One® Trust Account
• Schwab One® Estate Account
• Schwab Personal Trust Services

12. INSURANCE

Schwab has three options of insurance accounts to provide you and your family resources in the direst situations:

• Life Insurance
• Disability Insurance,
• Long-Term Care Insurance

Account types

DOES CHARLES SCHWAB OFFER A DEMO ACCOUNT?

If you aren’t ready for live accounts, you need to open a paper trading/demo account. Yes, Schwab’s StreetSmart platform allows demo trading. You just need to choose the “demo” option instead of the live account option when logging into the StreetSmart platform. The paper trading account provides you with $100,000 in virtual cash.

The broker has a security knowledge centre with detailed information about its security measures. To secure information and assets, Charles Schwab uses:

• Multi-layered technology
• Secure processes and procedures,
• Trained specialists in security and privacy.

Charles Schwab also promises to refund you if you lose money from your account due to fraudulent activities. These safeguards are enough to instill confidence in anyone trading with Schwab.

Charles Schwab security

WHERE IS CHARLES SCHWAB LOCATED?

Charles Schwab’s headquarters is 3000 Schwab Way, Westlake, Texas, US. However, it has offices in various states.

WHO OWNS CHARLES SCHWAB?

Charles Schwab has no ownership currently. However, Bank of America acquired the firm in 1983.

There are three ways to fund your account.

• Wire Transfer
• Account Transfer
• Send a check

Wire transfer is the fastest method; it usually takes one day. All other methods can take 3-10+ business days, which is one drawback of using Schwab over other brokers with quicker deposit times.

Charles Schwab has the same withdrawal methods as deposits. Also, it takes the same amount of time. There are no additional fees for withdrawals or deposits.

Charles Schwab payment methods

There are several ways to contact the broker. You can call by phone, use live web chat, or visit a branch in person. They can also be reached by social media. There is an FAQ page on Schwab’s site where you can find all answers to your questions.

Charles Schwab contact page

Charles Schwab offers promotions for referring friends. You can get up to $1000 if your friends sign up with the broker through your referral code.

Charles Schwab promo

Although Charles Schwab currently doesn’t provide any bonuses, you can get a Starter Kit. If you fund your account, you can get $101 for the broker, split across the top five S&P 500 stocks.

Schwab Starter Kit

Charles Schwab does charge taxes on profits if you are from the US. Profits are taxed at different rates in different ways. The short-term gains are taxed at 10%, 12%, 22%, 24%, 32%, 35%, or 37%. Conversely, the long-term gains are taxed at 0%, 15%, or 20%. You can find all the info you need here.

Well, I can tell you what personally motivated me to open a Charles Schwab account. Firstly, I like commission-free trading. The fees are way less than some of its competitors. Secondly, the platform and the research stand out. The native platforms provide plenty of helpful options for beginners and pros.

Next, the customer support is superb. Whenever I have any problem, I can contact them knowing their response will be both prompt and professional. It’s no surprise that Charles Schwab is top of the food chain. Let’s see what others have to say:

Can a foreigner open a Charles Schwab account?

Yes, you can! Charles Schwab allows investors from 30 countries. You can open an account online or call the broker. You can find all the info you need on the broker’s international page.

How long does it take to open a Schwab International account?

You can open an account in less than 15 minutes. You need to have a valid ID and provide your details to open an account.

Is Charles Schwab good for Roth IRA?

Yes, it is. Schwab scores higher in education, trading tools, account types, tradable assets, and retirement services. So, it is a good choice for opening a Roth IRA.

Which is the largest brokerage firm in the US?

As of December 2021, Charles Schwab is the biggest broker in the US, with $7.6 trillion in assets under management.

Who is Schwab’s biggest competitor?

Charles Schwab’s competitors include BlackRock, TIAA, Goldman Sachs, and Morgan Stanley.

Is Charles Schwab better than Ameritrade?

It is true that TD Ameritrade scores higher in terms of platforms, tools, education, accounts, and overall trading conditions. However, as Schwab now owns TD Ameritrade, this gap will no longer exist.

FINAL THOUGHTS

Charles Schwab shines in platforms, assets, fees, and account types. However, there is always room for improvement. The broker can improve its funding methods and speed, as well as its margin rates. Also, there are currently no forex pairs or direct crypto trading available to traders on Schwab.

So, I’ll give it a 4.5/5. I hope this review was informative and time-saving for you. If you are looking for forex brokers other than Charles Schwab, you can check the complete list of brokers here.

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