Are you looking for a stock brokerage firm that has a good reputation in the investing community? If so, Charles Schwab has got you covered. It is here that you will be offered excellent customer service, competitive trading platforms, and a wide range of commission-free exchange traded funds as well as transaction fee-free mutual funds. Offering its customers two trading platforms and a low minimum account balance, Charles Schwab is a great way to get the ball rolling for new and active traders.
Charles Schwab: Did You Know?
- The commission’s rate is $4.95
- The account minimum is $1,000
- Promotion: If you make a deposit of $100,000 or more, you can make 500 free trades.
When Is The Right Time To Use Charles Schwab?
- Charles Schwab is best if you’re a beginner investor or an advanced trader
- It can also be used if you are an investor who is seeking commission-free ETFs
- You can use it if you value no-minimum index funds
- If you are an investor who relies on premium research, Charles Schwab should be your go-to company
Areas in Which Charles Schwab Excels
Commission rates and fund expenses
As of 2017, Charles Schwab has changed its trading commission to $4.95 (originally it was $8.95), thus making it one of the lowest-cost online brokers. Considering the quality of Schwab’s trading platforms and investment selection, many investors look at this cost as a bargain. In addition, Schwab offers low expense ratios for index funds and ETFs. But wait, it keeps getting better! Charles Schwab recently removed mutual funds that carry loads or initial sales charges. If the company does not carry certain load funds, they will waive these charges.
Commission-free ETFs
NerdWallet has labeled Charles Schwab as the best online broker for beginners as it offers more than 200 commission-free ETFs. Additionally, Schwab offers an ETF Select List, which includes the top picks for the best funds in selected categories. These lists can be sorted by the following features: expense ratio, benchmark index, and Morningstar category.
Last but not least, there is the Schwab ETF Portfolio Builder tool, which walks you through the process of creating a diversified ETF portfolio on the basis of risk tolerance.
Customer service and support
Offering 24/7 phone support, Charles Schwab also has chat support and a large network of branches, where an individual can attend workshops and set up appointments with financial consultants. If you are looking for complete management, Schwab also offers a robo-advisor called Schwab Intelligent Portfolios.
Investment and account balance minimums
Lower than Fidelity and equal to Vanguard, Schwab has an account minimum of $1,000. If you agree to automatic monthly transfers of $100 or more, Schwab will disregard these minimums. However, if you are looking for a broker that requires no minimum, check out TD Ameritrade and OptionsHouse.
That aside, the real benefit here is that Schwab has removed investment minimums on all index funds. Therefore, even if you have a small amount of money and you keep up with your momentum with small investments, you can still get into one of these funds.
Available Research Engines
With hard to beat research offerings, Schwab provides its own equity ratings as well as reports from Morningstar, S&P Capital IQ, Market Edge, and Ned Davis. In regards to news and earnings reports, these will all come from Reuters and Briefing.com
Additionally, Schwab has easy to use investment screeners that let you save your screens. Select Lists can also be made by company experts and they will be released quarterly so you have a pre-screened selection of ETFs and mutual funds. It is important to note that the funds on the Select Lists are divided into categories, therefore you can easily see the company’s top picks in different areas.
Trading platforms
Offering two different trading platforms, the web platform and the company’s desktop platform, both options are available with no trade fees.
- If you a beginner investor, check out Schwab’s web platform, StreetSmart.com
- Available for Windows and as a cloud-based solution, Schwab’s desktop platform, StreetSmart Edge, is a step up in sophistication.
Designed for efficiency and simple navigation and customization, StreetSmart Edge has a variety of advanced features. This will be the platform that lets you create customized trading layouts and multiple charts of the same stock. In addition, there is a tool called the ‘Balances Bar’ which gives you an overview of your account and buying power. There is also an account detail window in which you can see your portfolio, orders, and trade history. This platform also includes a tool called ‘Symbol Hub’ which lets you quickly research a symbol, view streaming data, and place an order.
Furthermore, Schwab offers Trade Source, which is an online only feature that lets clients monitor their portfolio as well as the markets. Trading clients are also able to access research and view technical data. One feature of Trade Source is a trade ticket for stock, ETF and options orders.
Last but not least, there is a mobile trading app that closely reflects the functions of the web platform.
Disadvantages of Charles Schwab
Transaction-fee funds
Despite its extensive list of no-transaction-fee funds, if you’re looking for a fund that isn’t on the list, you’re going to end up paying for it at Schwab. Out of all the brokers that NerdWallet has surveyed, Schwab has the highest charge of a whopping $76.
What It Comes Down To
Here’s the bottom line: Charles Schwab is one of the best online brokers because it has low commissions, endless research opportunities, high-quality trading platforms and commission-free ETF selection. If you are a beginner investor, be prepared to fall in love with Schwab’s customer service, in-person educational support and advise, and finally, their no-minimum index funds.
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