Charles Schwab Broker Review 2023

Founded 49 years ago in 1971 as Charles Schwab & Co. Inc., Charles Schwab (https://www.schwab.com/) is an American financial services company headquartered in Financial District, San Francisco, with over 345 physical branches, mainly in America and Britain. 

They are primarily targeting US clients, but there are about 40 other countries where Charles Schwab services are available. Examples of countries include Hong Kong, Singapore, Japan, United Kingdom, Germany, and Australia. However, the offered services may vary from country to country. For instance, UK and Hong Kong clients cannot trade with mutual or futures, only ETFs, bonds, options, and stocks are allowed.

Charles Schwab is regulated by several financial authorities, namely the Securities and Exchange Commission (SEC), Financial Conduct Authority (FCA), and Financial Industry Regulatory Authority (FINRA). Its veteran status in the financial services space and its size, expertise, and stability make Charles Schwab one of the top choices for trading and investing in US companies. 

About Charles Schwab 

Charles Schwab started as a fairly small discount brokerage firm. Over the years, it expanded into what it is now, a multinational investment services firm with $3.8 trillion assets and 12.9 million active brokerage accounts, 1.7 million corporate retirement plan beneficiaries, and 1.4 million banking clients1. 

Created in 1971 by its namesake Charles Schwab, the broker-dealer pioneered the discount sales of equity securities during the deregulation of the 1970s. The economic expansion during the 80s allowed the bank to invest in tech, digital record keeping, and automation, enabling more efficient services. Following the Digital Revolution, the institution offered online trades in 1994. This allowed them to eliminate account fees by 2005 and offer commission-free funds in 2011.  

The firm presently offers wealth management advisory, stock brokerage, and commercial banking services to large institutional and small retail clients. They have a robust online presence as well as hundreds of branches all over America. 

Charles Schwab prides itself on quality customer service centering on purpose and values, and their focus on “seeing the world through clients’ eyes” means that they deliver the value that clients want, and in turn, leads industry trends. 

Here is a really nice Charles Schwab review video;

Accounts You Can Open With Charles Schwab

Charles Schwab has many different accounts you can open, and creating an account is fully-digital, user-friendly, and fast.  

• Brokerage Individual Account – A brokerage account owned and used by one individual. 
• Brokerage Joint Account – A brokerage account owned and managed by two or more individuals 
• Corporate Account – An account owned and used by a legal entity such as a business or corporation 
• Retirement Accounts – Schwab offers five types of retirement accounts: Traditional, Roth, Rollover, Inherited, and Custodial IRA. Only available for US clients
• Education Account – The tax-advantaged and state-sponsored 529 College Savings Plan is an investment vehicle that funds its beneficiary’s higher education. The Education Savings account is tax-deferred and can pay for primary, secondary, or tertiary education expenses. 
• Custodial Account – A brokerage account managed by a custodian for a minor. The proceeds can be used for any purpose. 
• Estate Planning Accounts – Schwab One Trust accounts have all the features of a regular brokerage account, but with support for asset management and protection after your death. The Schwab One Estate account helps you carry out the services related to the execution of an estate. 
• Charitable Accounts – The Schwab Charitable account is a donor-advised account that helps you realize tax benefits related to gratuitous donations. 

Charles Schwab’sSchwab’s High Points 

Charles Schwab generally receives positive reviews and high marks on various review sites because of these reasons. 

• There are no commissions for online equity, ETFs, and penny stock trading transactions. Options also have a $0 base fee, but they carry a contract fee of $0.65 per contract, which is not that much and is in line with many other brokers. 

• Charles Schwab’s research offerings are pretty good. Their research services are probably one of the best in the industry and are hard to top. The firm combines its equity rating and reports from MorningStar, Market Edge, Ned Davis, and Credit Suisse. Their in-house expert team is excellent, and the market commentary found through its portal is engaging, timely, and fresh. 

• StreetSmart Edge, the firm’s flagship downloadable trading platform, is easy to learn and navigate while providing a lot of functionality for day traders and options traders. The program is also customizable; you can limit the data to the figures you actually need. The company also integrates with Alexa and Google Assistant – you can ask them both for stock quotes, values, updates, and more. 

• In addition to the site, there are several robust trading platform options, all free and available to every trading client. 

Are There Fees To Transact With Charles Schwab?

Here are the fees for most significant transactions you can do with Charles Schwab. 

• There are no fees charged for online equity, OTCBB (penny stocks), and ETF trades. 
• There are no per leg commission fees relating to options trades, but per contract fees amount to $0.65. 
• A 50 options contracts order amounts to $32.50. 
• A 500-share plus five contract-covered call trade amounts to $3.25 
• For mutual funds outside the No Transaction Fee program, commissions are $49.95. 
• No commission on the new fixed-income issues.  
• There is a $1 fee for secondary market bond trades with no markup on the bond itself. 
• As of January 2020, margin interest rates range from 9.325% for the lowest account balance bracket to 7.575% for the highest account balance bracket. 
• Futures transactions require $1.50 per contract per side. 
• Broker-assisted trades are $25 per trade across different asset classes. 
• There are no fees for inactivity, account transfer or closure, sending or receiving wire transfers, paper statements, trade confirmations, sending checks, or exercise/assignment. 
• There is a $25 fee for partial transfers of assets and $50 for full transfers. 
• There are no minimum balance requirements on its retail brokerage accounts. 
• Clients living in the US require no minimum deposit to create an account, but non-US clients need a $25,000 minimum deposit. 

Advantages of Transacting With Charles Schwab 

Charles Schwab has the following advantages over its competition. 

• Desktop and mobile platforms are free to use 
• Extensive research services 
• Large selection of funds 
• Low non-trading fees, and free ETF and stock trading 
• Fast and fully digital account creation 
• No deposit fee and user-friendly withdrawal process 
• Research interface is seamless 
• Great customer support 

Some disadvantages to take note of are as follows. 

• Low default cash sweep rate 
• High fees for some of its mutual funds 
• No demo account 

Conclusion 

Years of experience as a broker and a proven banking background lends itself well to the credibility, ability, and security of Charles Schwab as a financial services institution. Their expert team is ready to help you with any of your trading needs, and combining them with your knowledge, will help you on the path to becoming a successful online trader.