Charles Schwab Review – Is Charles Schwab Safe? Fees & Minimum Deposit Explained
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Charles Schwab is one of the most prominent names in the brokerage industry. This platform integrates tons of financial services and supports multiple investment products across both US and international markets.
If you are wondering whether this long-standing broker is the right fit for your investment needs, then this Charles Schwab review is a must-read. Within it, we explore the many markets supported by this platform, investment products available, regulatory standing, fees, and minimum deposits required.
Based in California, Charles Schwab is one of the oldest brokers in this space – not least because it has been around since the 1970s. This provider offers you a full line of financial assistance, allowing you to open checking and savings accounts, while also giving you access to trading and investment services. It supports a plethora of markets – from stocks, ETFs, mutual funds, and derivative instruments such as options and futures.
Following the emergence of the fintech industry, Charles Schwab was among one of the first few conventional firms in the US that adopted a commission-free pricing model for the online trading of stocks and ETFs. However, if you are to use broker-assisted services, this will invariably result in additional fees. You can also use the platform to invest in intelligent portfolios and benefit from the expertise of robo-advisors.
On top of this, Charles Schwab also allows you to open trades with a buy or sell order, giving you the opportunity to profit from rising and falling markets of securities. Furthermore, it integrates a variety of trading platforms that you can access via the web version, desktop software, or a mobile app. The products offered by this broker appeal to a wide range of investing styles, from novice to advanced.
In terms of security, Charles Schwab is regulated by the SEC, CFTC, and FCA. It also has insurance schemes in place that protects your funds in case of unauthorized access. This broker also provides its users with a satisfaction guarantee – meaning, if you are not completely content with the service offered, Charles Schwab will refund your eligible fee or commission.
Our Charles Schwab review found that the broker offers the following advantages and limitations to investors and traders.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. 67% of retail investor accounts lose money when trading CFDs with this provider.
Our Charles Schwab review team found that this broker gives you access to 30 different global exchanges. This can be highly appealing to those who want to diversify and gain exposure to international stock markets via a single platform.
Charles Schwab allows you to trade stocks listed on not only US exchanges, but also international markets. You can go either long or short on close to 3,000 different shares via this broker. Apart from domestic companies, the platform also makes it possible for you to access American Depositary Receipts (ADRs), and foreign ordinaries.
Stocks of companies listed in Europe, Canada, Hong Kong, Thailand, Taiwan, and several other regions can be traded via this broker. However, take note that you cannot make investments in all supported foreign markets. For instance, while you can trade some shares in China, Hungary, South Korea, and the Czech Republic, it is not possible to invest in all companies based in these locations.
Remember that being based in the US, Charles Schwab does not support CFD trading. As such, if you want to engage in short selling, you are essentially borrowing shares from the broker. To do that, you have to establish a margin account that holds cash, or other eligible equities are collateral. As with other forms of obtaining financing, you are charged interest on the value of the outstanding shares.
Charles Schwab stock slices is a feature that allows you to buy fractional shares via this broker. For those unaware, this means that you do not have to purchase one whole share of a company. Instead, you can purchase equities corresponding to the amount you want to invest. This can be particularly helpful if you want to own stocks of firms such as Amazon, which is trading at well over 3,000 USD.
This way, you end up with a fraction of a share, or more than one – depending on how much you invest. You can buy stocks of up to 30 US companies this way, in a single transaction. Unlike trading, you will be a stock owner – meaning, you can hold and sell shares independently. The broker also allows you to earn dividends, in proportion to the percentage you own.
Currently, Charles Schwab slices are available only for US companies listed on the S&P 500 Index. The minimum amount required to invest is 5 USD, and the maximum is 50,000 USD per transaction. There is no limit to how many shares you can purchase this way, or how often. The equities you buy can be found in your brokerage account upon completion of the purchase.
When you invest in a mutual fund, you are essentially putting your money in a company that pools capital from many investors to buy stocks, bonds, and other securities. These are professionally managed, allowing you to gain broad exposure without having to constantly monitor the performance of the assets yourself.
One key point to note about mutual funds is that you can buy or sell them only once per day. Our Charles Schwab review discovered that this broker has put together an extensive list of mutual funds at your disposal:
You can either do the market research yourself to handpick the mutual funds that meet your needs, or choose to use the portfolio builder tool to diversify your investments based on your personal financial goals and risk appetite.
An Exchange-Traded Fund (ETF) is an investment vehicle similar to that of mutual funds; however, the main difference is that ETFs can be bought and sold throughout the day on public stock exchanges.
For instance, the Schwab 1000 Index tracks the largest 1,000 stocks in the US, giving you exposure to a large percentage of large-cap companies in the domestic market.
For those who prefer derivatives, Charles Schwab also provides you with access to options and futures. These instruments can be complex to speculate on, especially if you are a beginner. Not only that, but you also need to be approved by the broker before you can trade these instruments on the platform.
The types of options and futures available to you also depend on your approval level. Nevertheless, our Charles Schwab review team found that the broker offers an extensive set of tools and charts for you to devise strategies. There are screeners and idea hubs that allow you to pick the right securities based on whether you are bullish, bearish, or neutral.
You can also use the probability calculator to evaluate the potential profit and loss scenarios of an option or future before you place a trade. Unlike other US-listed assets listed on this platform, trading options and futures come with additional costs, which we will discuss later in this Charles Schwab review.
Although Charles Schwab does include cryptocurrencies within its list of investment products, this does not mean that you can directly invest in digital assets such as Bitcoin, Ethereum, or Cardano. Instead, you can gain exposure to this market indirectly via the following methods:
As you can see, if you are looking to trade or invest in cryptocurrencies directly, Charles Schwab is not the right broker for you. Instead, you might want to consider another platform like eToro, which allows you to invest in dozens of digital currencies from just $25 and on a spread-only basis.
Our Charles Schwab review team found that this broker also offers a flexible lending solution for those who want to borrow funds to purchase additional securities or meet their short-term financial needs. You can start to borrow as little as 2,000 USD this way, by collateralizing eligible investments that you already hold in your Schwab account.
You can get up to 50% of the value of these investments – which is in line with the SEC guidelines on margin lending. As long as you maintain the minimum requirement of 30%, you can take your time to pay back the loan. However, you will have to pay interest which is based on your debit balance and the base rate charged by the broker.
As we covered earlier, Charles Schwabs gives you access to not only US companies but also to stocks listed in 30 other foreign markets. If you open a standard brokerage account, then you can place trades via these exchanges, albeit, markets are settled in US dollars.
On the other hand, if you choose to engage in the international marketplace, you can choose to open a global account. In doing so, you can place trades online, and in other fiat currencies. Needless to say, this comes with more flexibility, but you can only access 12 of the supported foreign markets.
Note that both these accounts are for US residents only. That is to say, global investing is not a feature for non-US users. If you are from another country, then you need to register on Schwabs International which gives you access to US equities.
As we established earlier in this Charles Schwab review, the broker supports a large variety of investment products. Apart from the ones listed above, you can also gain access to the following securities, some of which are offered via interaction with the Charles Schwab banking services.
No matter which investment product you choose, Charles Schwab offers you plenty of resources to learn about the specific security, instrument, and its market movements.
There is a reason why Charles Schwab is considered one of the best brokers in the financial space. It not only gives you access to different securities and markets, but it also provides you with tailored solutions to manage your investments.
In this section of our Charges Schwab review, we will see what investment management services are offered by this broker and how you can benefit from them.
Charles Schwab Intelligent Portfolios is an automated investment advisory service that uses robo-advisors to prepare a tailored portfolio based on your needs. This tool uses an advanced algorithm to build, monitor, and rebalance your portfolio.
You can choose from a selection of 51 ETFs, three investment strategies, and six different risk profiles that vary from conservative to aggressive growth. The broker also provides you with historical average returns and asset allocations of its existing portfolios, so you are fully equipped with relevant data to make the right decision.
All you need to do is choose your goals, initial investment amount, and how much you think you can save every month. Based on these answers, the robo-advisor suggests a portfolio and tracks its progress against your objectives. You can change the parameters in case your financial standing changes. You can also set the duration, as well as how much money you would like to withdraw every month.
You can get started with these intelligent portfolios with a minimum of 5,000 USD. There are no advisory fees and no commissions. However, you will have to pay for the operational costs when investing in ETFs. To provide you with sufficient levels of liquidity, a part of your portfolio is also placed in an FDIC-insured deposit at Schwab Bank.
This premium product is more or less similar to the Swach Intelligent Portfolios tool we discussed above. However, it comes with the following differences:
As you can see, the main difference here is that you get expert advice from a consultant to plan your portfolio based on your individual conditions. This can be tremendously helpful for people who are unsure about the risk profile that matches their financial standing.
Unlike intelligent portfolios that cater to your specific requirements, Schwab-managed portfolios are already predesigned. However, these are regularly rebalanced to align with ever-changing market conditions.
There are two options available to you within this category of passive investment tools:
Both these allow you to diversify your investments in one go. However, you need to make a minimum initial deposit of 25,000 USD to get started. In addition to this, you also have to pay services fees, depending on how much you have invested. The most you will pay is 0.90% – and this is lowered as your stakes increase.
Although the above-mentioned products might appeal to the majority, or Charles Schwab review found that this broker has a few more management solutions.
This will get you access to highly tailored services, such as:
As is evident, no matter your investment needs or preferences, this broker has a solution for you. Such an extensive list of products is what sets Charles Schwab apart from the rest of the market. However, those with a small budget won’t be eligible to open a guided account, as most plans require at least six figures to get started.
Schwab.com is the proprietory web trading platform of Charles Schwab, allowing you to execute and manage your trades from one place. It comes integrated with tons of research tools, making it possible for you to have all the information you need at your fingertips.
Here are some of the features accessible via this tool:
Schwab.com also features the tool All-In-One Trade Ticket, which allows you to buy and sell multiple assets such as options, futures, stocks, and ETFs, from one place.
If you would rather use a desktop application, Charles Schwab has designed StreetSmart Edge for that purpose. This is even more advanced than the previously discussed web trader and links several tools such as screeners and watchlists. You can also customize the layout, allowing you to develop an interface that best fits your style.
StreetSmart Edge is available to download on both Windows and macOS devices. The software also allows you to access interactive Trade & Probability calculators, and a wide set of trading orders to adjust your positions based on your strategy. You can even access news and videos from a number of supported channels, as seen in the image above.
The mobile app of Charles Schwab is no less powerful than the desktop or web platforms. It packs more or less the same features, allowing you to place trades and monitor your positions at a glance. You can also obtain breaking market news, real-time analysis, and in-depth charts on the go.
As with the desktop program, you can also customize your experience to see the summary that you need or set the hierarchy of the screen. In addition to this, you can also set text alerts and push notifications so that you are always updated about your accounts and investments.
Another aspect that is unique to the Charles Schwab mobile app is that you can deposit a check directly to your Schwab bank or Schwab brokerage accounts simply by uploading a photo. You can also securely transfer funds between these two or pay bills directly via the app.
Moreover, Charles Schwab ensures secure data transfer encryption technology. You can also add more protection by setting up facial recognition, standard passcode, or fingerprint scan to access the app safely.
Charles Schwab is a well-established broker that combines not only investment and trading products but also other financial solutions. This includes financial solutions for:
However, since this Charles Schwab review focuses on its brokerage solutions, we will take a closer look at what accounts are offered under this specific category.
This is the standard brokerage account you can create on Charles Schwab, which allows you to:
This account is geared more towards advanced trading and comes with support for:
You can sign up for these accounts by providing your full name, address, and social security number on Charles Schwab.
This is designed for US residents who seek to trade in 12 of the supported countries in their local currencies. Similar to a standard account, there is no order or deposit minimum required. However, you will have to pay commissions that vary depending on the markets you are trading in.
Additionally, in order to open a global account, you need to send in an application to Charles Schwab. Alternatively, you can also include this as an add-on, if you already have a brokerage account with the provider.
Charles Schwab also caters to organizations, offering flexibility and products required to manage investments.
These accounts come with:
However, to open an organization account, you need to meet a minimum deposit of 250,000 USD.
If you are not based in the US, then you can access the services of Charles Schwab via an international account. You can do this by sending in an application and the required supporting documents, including:
If approved, you need to make a minimum deposit of 250,000 USD to start using the services of Charles Schwab. The fees applicable for international users are the same when using this broker.
It is worth mentioning that Charles Schwab offers you some of the most comprehensive trading or research tools. In fact, the analysis instruments and intelligent screeners available on this platform are rarely found in the online investment arena.
There are several watch lists you can set up, aside from third-party research tools and probability calculators. You can see samples of these without even having to sign up on the platform, which can be helpful in knowing exactly what you are paying for. There is also a knowledge center where investors and traders across all levels can find useful information on how to achieve their goals.
There are different ways for you to fund your Charles Schwab account:
Unfortunately, there is no option to fund your account using a debit or credit card, or support for e-wallets such as PayPal. Foreign checks are accepted, but these have to be mailed to Schwab and cannot be deposited via online payments.
Charles Schwab One and global accounts do not have any minimum balance requirements. However, depending on your payment method, there might be some transfer limits involved. For instance, you need to deposit at least 1 USD when making an electronic transfer from Schwab bank, and the maximum you can send is 100,000 USD.
Charles Schwab does not charge you any fees to open or maintain your account. However, if you are to use the brokerage or investment services, other charges might apply, as follows.
Charles Schwab does not charge you any commissions for online trading of US-listed stocks, ETFs, and Schwab Mutual Fund OneSource. However, if you are placing broker-assisted trades, then it comes with a 25 USD service charge.
Commissions for options and futures contracts are calculated as follows:
Our Charles Schwab review found that these rates are standard for international accounts too.
If you are in the US and looking to gain access to international markets, then the commissions are calculated differently, and in the respective local currency.
As we mentioned earlier in this Charles Schwab review, the broker facilitates margin lending and charges you an interest rate based on the loan amount:
These margin rates can fluctuate during the period of your loan. The interest is calculated daily and posted on a monthly basis.
Being one of the largest brokers in the US, Charles Schwab has left no stone unturned in ensuring that the platform offers you the utmost safety and security with your investments.
The provider is regulated by the most well-respected, market-leading financial authorities in the US
All this points to the fact that Charles Schwab is a completely legitimate broker that takes the safety of customers’ funds seriously. There have been no reports of any data breaches disclosed on the website, and the platform is also secured as per industry standards.
One unique selling point of Charles Schwab is that it has branches across the country, where you can drop in and get customer service in person. This service is offered by only a handful of other brokers, such as TD Ameritrade, which is currently a part of the Charles Schwab Corporation. If it is crucial for you to be able to talk to an expert in person, then Schwab is well worth considering.
For those who prefer receiving customer support online, you have the option to chat with a broker via the website. There are also several phone numbers listed that you can use to call a representative. In addition to this, you can also find an FAQ section categorized based on the relevant topic, which offers clarifications on many common queries.
Charles Schwab is a full-service brokerage that offers you an extensive set of products at competitive rates. However, the platform still has the reputation of being a conventional financial institution.
To help put things into perspective, in this section, we compare Charles Schwab against the popular broker eToro – a fully-online social trading platform that serves over 20 million global clients.
As we have already established, Charles Schwab is regulated in the US and the UK, by reputable financial authorities. In other words, the platform offers you a safe environment to engage in investment and trading.
But eToro is not behind Charles Schwab by any means when it comes to the security offered. In fact, this broker is governed by not only the SEC in the US, but also holds licenses from the FCA in the UK, ASIC in Australia, and CySEC in Cyprus.
Make no mistake about it, eToro is one of the best brokers out there for beginners. The platform is extremely user-friendly, allowing you to buy and sell assets easily. However, it still offers several indicators and chart reading tools for advanced trading. Although Charles Schwab has a highly sophisticated interface, it can be overwhelming for novice traders and investors.
Charles Schwab is known for offering a wide variety of investment products. However, it lacks support for one of the most popular asset classes these days – cryptocurrencies. Although there are indirect ways to gain exposure to this market, there is no way to directly invest in digital assets.
However, on eToro, you can buy, sell and trade multiple cryptocurrencies. Additionally, the broker also gives you access to stocks across international exchanges, including the NYSE, Toronto Stock Exchange, LSE, Euronext Paris, and more. There is also support for commodities, indices, forex, ETFs, and more.
Charles Schwab allows you to fund your account using wire transfers or checks. On the other hand, eToro is much more flexible in this regard. The broker allows you to make payments via credit/debit card payments and e-wallets such as PayPal and Neteller. This feature can be crucial for many users, who do not often use checks or time-consuming online transfers.
In terms of fees, eToro also charges you zero commissions for stocks and ETFs, like Charles Schwab. However, unlike Charles Schwab, eToro extends its 0% commission offering to all of its international markets – covering stocks based in Europe, Asia, and more. In the case of Charles Schwab, access to international markets comes at a premium.
As with Charles Schwab, eToro offers you different passive investment tools. However, the main difference is that you do not have to make a large initial deposit to take advantage of this. For instance, in the Copy Trading feature, you can start by investing just 200 USD. With this tool, you can choose an experienced trader to follow, and trades they carry out will be replicated in your account, in proportion to your stake.
You also have another version of managed portfolios on eToro – called CopyPortfolios. These are similar to ETFs, insofar that they carry a diverse selection of strategies and target markets, rebalanced by professionals based on broader economic conditions.
When it comes down to choosing a broker, there is no one-size-fits-all solution. There is no denying that Charles Schwab is one of the most reputed platforms in this space. It offers a wide array of products, which cater to various needs and different trading styles.
There are also tons of intelligent tools and passive strategies available, that can take your investment goals to the next level. All that being said, we found that eToro is by far the better option.
This platform is heavily regulated and offers you access to both US and international markets on a 0% commission basis. Furthermore, eToro supports fractional investments of just $50 on all of its supported stocks – and the platform itself is super user-friendly.