Charles Schwab Review 2024

Why choose Charles Schwab

Charles Schwab, one of the largest stockbrokers in the US, may be the perfect choice for you if you’re interested in commission-free stock and ETF trading on US markets.

Apart from stocks and ETFs, Charles Schwab also offers funds, bonds, options and futures. It has solid trading platforms, the account opening is easy, and there’s no minimum deposit for US residents.

Among its drawbacks, fees for futures and some funds are high and the $25,000 minimum deposit requirement for non-US residents is a tall order for many investors.

Charles Schwab completed its acquisition of TD Ameritrade in 2020, and completed to move all TD clients to Charles Schwab by May 13th 2024. This means few changes for existing Schwab clients, but one advantage is that they can access TD’s excellent Thinkorswim trading platform.

Pros

Free stock and ETF trading
Outstanding research
Great customer service

Cons

High fees for some mutual funds
Only US/Canada markets available

Fees

Score: 4/5

Charles Schwab offers free trading for stocks and ETFs, as well as some mutual funds and bonds, while non-trading fees are low. On the negative side, futures and some fund fees are high.

Pros

Free stock/ETF trading
Free trading for some funds/bonds
Low non-trading fees

Cons

High fees for non-free mutual funds
High futures fees

We compared Charles Schwab’s fees with two similar brokers we selected, E*TRADE and Fidelity. These competitors were selected based on objective factors like products offered, client profile, fee structure, etc. See a more detailed comparison of Charles Schwab alternatives.

Commission-free stock and ETFs

It’s extremely great as Charles Schwab has commission-free US stock trading.

Charles Schwab stock and ETF commission
Broker	US stock
Charles Schwab	$0.0
E*TRADE	$0.0
Fidelity	$0.0

High margin rates

Charles Schwab USD margin rate fees are higher than the industry average. USD margin rate fees are calculated as follows: Base rate + 1.825% for loan balance below $25.000

Charles Schwab annual margin rates
Broker	USD margin rate
Charles Schwab	13.6%
E*TRADE	14.2%
Fidelity	13.6%

Low options commission

Charles Schwab US stock index options fees are about half of the industry average. US stock index options fees are calculated as follows: $0.65 per contract

Charles Schwab stock index options commission
Broker	US stock index options
Charles Schwab	$6.5
E*TRADE	$6.5
Fidelity	$6.5

Charles Schwab charges a $0.65 fee per contract.

No inactivity fee, no withdrawal fee

There are no inactivity or account fees. IRA accounts are also free and there are no minimum balance requirements for any of those accounts.

Charles Schwab inactivity, withdrawal and other fees
Broker	Inactivity fee	Withdrawal fee
Charles Schwab		$0
E*TRADE		$0
Fidelity		$0

There is no withdrawal fee if you use ACH transfer. Withdrawals to other banks by wire transfer cost $25.

Other commissions and fees

High mutual fund commission: trading mutual funds involves the following charges – Standard fee of $49.95, but up to $74.95 for buying, while selling is free; there are also around 4,000 free mutual funds.

High futures fees: US index futures fees are as follows – $2.25 per contract.

Low FX fees: All fees are built into the spread, so there is no separate commission charged. For example, the EUR/USD spread is 1.4.

Low bond commission: US treasury bonds come with the following charges – $0 for Treasury bonds; $1 per bond for corporate bonds with $10 minimum and $250 maximum.

Misc. fees compared with other brokers
Broker	Mutual fund	US micro e-mini stock index futures
Charles Schwab	$25.0	$22.5
E*TRADE	$20.0	$15.0
Fidelity	$37.5	–

Check out this article for a detailed analysis of all the fees, commissions and other charges levied by Charles Schwab.

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