Pros / This broker offers solid educational resources and customer support.
Cons / Schwab requires a minimum balance of $1,000 to begin making trades.
Verdict / With a large offering of commission-free ETFs and low commissions, Charles Schwab is a good choice for new investors, though it lacks the expanded tools that benefit advanced traders.
Charles Schwab is a well-established bank and investment broker. One advantage of investing through Schwab is the convenience of having your banking and investing accounts in one place.
The Schwab.com trading platform includes all of the basic tools to begin investing. This is a quality platform, though not as complete as others we reviewed. Investors of all levels will find the stock screening tools useful. There are a wide range of options and criteria to help you filter down and find stocks to invest in. Charting tools are limited when compared to other platforms, both in terms of the number of analytic studies and the features.
Advanced traders may find StreetSmart Edge a more useful platform. This offers more extensive trading tools, including Recognia, a third-party screening service that has pre-populated recommendations. StreetSmart Edge also makes it easy to create exit points and conditional orders by having a trading ticket immediately accessibly on the right rail of the platform. You can also set StreetSmart Edge to demo mode to test out the program and practice trading.
You can use the mobile app to view quotes and read market news, buy stocks online and keep an eye on your watch lists and option chains. Schwab’s app also has the same research tools as the main platform, a powerful feature not common with all apps. The only drawback to Schwab’s app is that you can’t set up alerts.
Charles Schwab has some of the lowest commissions of the brokers we reviewed. Each trade for stocks and ETFs is a flat $4.95. The cost for option trading is $4.95 for commission plus $0.75 per contract. If you would like assistance when completing a trade, there is a $25 broker-assisted fee on top of the commission and contract fees. In general, this stock broker charges slightly higher fees than other services. You also must have $1,000 to open an account, while many services do not require anything in advance to open an account.
Charles Schwab offers over 200 different commission-free ETFs. These can be a good choice for beginning investors. Keep in mind that though you don’t pay a commission, these investments aren’t completely free. These funds all have expense rations, which is an annual fee for management and upkeep. The expense ratios on Schwab ETFs range from 0.13% to 0.03%.
This company offers educational resources and training to help you get up to speed on stock trading. This training includes tutorials and videos that take you step-by-step through the platform. Even if you're not a first-time investor, you will still be able to take advantage of the webinars, blogs and training courses.
Charles Schwab provides a variety of investments suitable for traders and investors. Trade commissions are competitive, albeit higher than some services, including the broker-assisted fee. The online platform contains good trading tools, and you can access your account and place trades from the most popular mobile devices. Charles Schwab has a well-established and trusted name, and the service it provides is solid, but some of its fees make it more expensive than the best online stock brokers.