Charles Schwab Review: Invest With Low Fees and Smart Advising

charles schwab review

In the world of investing, Charles Schwab is a well-known and respected name.

This reputation has carried over into the online world, where Charles Schwab offers investors the chances to trade using a high-quality platform. Schwab is also a player in the robo-advising space with its Intelligent Portfolios.

Charles Schwab recently dropped its trading prices and now has a low transaction fee. Additionally, the brokerage has manageable minimum requirements and hundreds of no-transaction-fee funds to choose from.

Whether you are a beginning investor or a seasoned veteran, Charles Schwab has something for everyone.

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Charles Schwab review

You can open almost any type of investing account with Charles Schwab. No matter your savings goals or investing style, Schwab has an account to fit what you’re looking for. Take a look at this Charles Schwab review and see the many accounts they have to offer.

Individual and joint brokerage

You can open your individual account and trade, or you can open the account with someone else (such as a spouse or parent) and share the assets. These accounts are taxable investment accounts and you manage capital gains and losses each year.

Retirement

You can open a Charles Schwab retirement account as well. Schwab offers both Traditional and Roth IRAs. You can also use Schwab to manage an inherited IRA or 401k or to roll your 401k into an IRA account.

If you have a small business, choose from SEP IRA, SIMPLE IRA, or Business 401k options. It’s even possible to set up a personal defined benefit plan with Schwab.

For business owners with more employees, it’s possible to use Schwab for an organizational retirement account, too.

Education accounts

If you want to help your child save for college, open a 529 account with Charles Schwab. The company also offers the Schwab One Custodial (UGMA/UTMA) account and Educational Savings accounts.

Trust

Investors interested in estate planning can open a trust for family financial arrangements or for charitable planning.

Other Charles Schwab products

No Charles Schwab review would be complete without mentioning some of the other products offered by the broker.

Schwab Intelligent Portfolios

Charles Schwab has ventured into the world of robo-advisors. With the Intelligent Portfolios, you can have Schwab manage your portfolio using ETFs. Intelligent Portfolios are created based on your risk tolerance and goals; Schwab automatically rebalances as needed and engages in tax loss harvesting when applicable.

There is a $5,000 minimum for this type of account. There are no advisory fees, account service fees, or commissions, but you might have to pay the expense ratios on your ETFs.

Bank accounts

While this Charles Schwab review is about investing accounts, it is worth noting that they offer bank accounts as well.

Schwab offers FDIC-insured checking and savings accounts that you can link to your brokerage account. These accounts have no minimums or fees and the yield is 0.10% APY on any account balance.

How to open a Charles Schwab account

It’s fairly straightforward to open a Charles Schwab account. If you have all of your information together ahead of time, it takes about 10 minutes.

To open an account, you’ll need:

  • Social Security number
  • Driver’s license number
  • Information about your employer
  • Bank account information for a funds transfer
  • Any information related to assets you plan to transfer

If you want to do a rollover account, you will need the brokerage or plan custodian information from your current account.

Once everything checks out and your money is transferred, you’re ready to invest.

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Charles Schwab app

If you want access to your investment account on the go, the Charles Schwab mobile app is a good choice. It’s not a particularly fancy app, but it has everything you need to check your account performance and execute trades no matter where you are. You can get this app for your smartwatch, as well as for your smartphone and tablet.

charles schwab account

Image credit: Charles Schwab

Charles Schwab account fees and minimums

Schwab recently reduced its flat trading fee to $4.95 per trade. This puts Schwab on par with the best-priced online discount brokers.

If you’re interested primarily in trading ETFs, the Schwab ETF OneSource account is a great choice. There are more than 200 commission-fee-free ETFs available to you. However, you still have to pay expense ratios. Choose ETFs with lower expense ratios to save money.

You can also trade mutual funds with Schwab. If you choose OneSource Funds, you can trade for free. There are more than 3,000 no-load, fee-free funds to choose from. Again, your only cost is the expense ratio.

However, if you chose to trade mutual funds that are not OneSource, the cost is $76 per buy. This is a rather high rate in comparison to other brokerages. If you want to trade mutual funds with your Charles Schwab account, be sure they are OneSource funds.

Schwab also offers options trading. Fees for options trades are $4.95 plus $0.65 per contract.

While some of Schwab’s accounts have $0 minimums, most of them have a minimum of $1,000. However, if you are willing to commit to a regular automatic investment in most accounts, you can have the account minimum waived.

Also, while there is no account fee for inactivity, Schwab does charge a $50 fee for closing the account.

Charles Schwab pros and cons

Charles Schwab is well-known for its free and extensive research tools. You can access Schwab’s own ratings, as well as look at ratings from companies like Morningstar. It’s easy to find relevant information and earnings reports from Reuters. Plus, there are stock screeners you can use to find investments that fit your needs.

On top of that, Schwab offers trading platforms that are easy to use and full of information.

charles schwab account

Image credit: Charles Schwab

Trading platform StreetSmart Edge is a desktop software also accessible through the cloud. You can easily track performances and execute trades as you see fit.

It’s also a plus that Charles Schwab dropped its trading fee. While the $1,000 minimum can be challenging for some investors, it’s a plus that you can avoid the fee by choosing to make a monthly investment.

For the most part, the biggest drawback to using Schwab is the high buy fee for mutual funds that aren’t OneSource. This is easy to avoid, however, by steering clear of the expensive funds and sticking with the extensive list of no-fee, no-load funds.

Also, if you decide to open a linked bank account, your yield is going to be a modest 0.10% APY. That’s fairly average for a typical savings account, but the money in those accounts won’t earn nearly as much as it could if you were to invest it.

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Charles Schwab contact and customer service

Because Charles Schwab is a full-service brokerage, you can call 24/7 with your questions. Their main customer service number is 800-435-4000. If you decide to make trades with the help of a broker over the phone, you will pay an extra fee. However, just getting help with questions is free.

Charles Schwab also offers an online chat that is responsive and just as easy to use as the phone. But if you prefer to chat in person, Charles Schwab has branches around the country where you can meet with financial consultants and even attend free workshops.

Charles Schwab is a great choice for investors. It’s easy and inexpensive to sign up for an account. There are a wide variety of offerings for investors, whether you’re a beginner or seasoned pro. Plus, with the Intelligent Portfolios, it’s possible to take advantage of robo-advising if you want someone else to manage your portfolio.

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