Charles Schwab Review 2023

Trusted by thousands of clients with some $7.38 trillion assets, Charles Schwab is easily one of the most recognized names in the investing space. And since its acquisition of TD Ameritrade, Schwab cemented its status as one of the best online brokers around. You can check out our full list of the best places to invest here. 

From banking to brokerage services, Schwab’s investment options (with some of the lowest-expense ratio mutual funds available), commission-free platform, and solid banking products are just a few reasons we love to use it.

If you’re thinking about opening an account, learn more about Schwab in this review as we break down its key features, banking, and investing options.

Why Choose Schwab?

Founded in 1971 by the titular Charles Schwab, the company offers a wide range of financial services, a powerful online brokerage platform, and are particularly known for their low fees and pricing.

In 2023, Schwab was named a top pick in our annual reader survey of the best stock brokers because of their low fees, robust options, and banking products. 

Let’s take a quick look at some of Schwab’s pros and cons: 

Perhaps Schwab’s greatest strength is the variety of secure, insured investment options for investors and traders of all levels. 

Newer investors might benefit from the simplistic interface, educational resources, and the $0 account minimum. Seasoned traders, on the other hand, will enjoy the $0 commission on stock, options, and exchange-traded funds.

Schwab has no shortage of account types, either. Individual and joint accounts, brokerage, Roth and traditional IRAs, specialized 529 education accounts, trusts, and charitables are among the many options you will find. Whatever your financial need, Schwab has you covered.

With competitive fee rates, extensive educational resources, a dedicated trading platform, and account types to suit your specific needs, Schwab is a solid choice for banking and brokerage alike.

For all the good, every broker has its flaws, and Schwab is no exception. 

While investment and trading options are plentiful, those seeking direct cryptocurrency or Forex exposure will have to look elsewhere (although cryptocurrency futures and crypto-exposed company stocks, such as Coinbase’s COIN, do allow for indirect exposure.)

It is also worth noting that while Schwab does offer fee-free fractional shares, they are purely limited to S&P 500 companies. These “Stock Slices” are available for as little as $5, and also allow you to invest in mutual funds with a minimum of $100. 

Their primary mobile apps, Schwab Mobile and StreetSmart Mobile, are also less than stellar, suffering from dated UIs and scarce quality-of-life features.

What Kind of Charles Schwab Account Should I Open?

Charles Schwab does a fantastic job of helping investors understand their options and services to find something that suits their exact needs.

Let’s take a similar approach and see what kind of accounts might be best for you:

Best For: Banking

Charles Schwab Bank Investor Checking Account

• Unlimited ATM fee rebates worldwide
• No hidden fees or account minimums
• 0.45% APY

A checking account through Schwab comes with a debit card that can be used worldwide with no foreign transaction fees. Coupled with unlimited ATM fee rebates, a Schwab checking account is a great option if you plan to travel or work internationally.

While the APY leaves a little to be desired, the peace of mind that comes from Schwab’s security guarantee (promising to refund any losses due to unauthorized activity) may well be worth the trade. Schwab also has purchased additional insurance beyond the FDIC’s $250k guarantee. So you can be assured that Schwab prioritizes the safety of your funds.

Another key benefit to opening a investor checking account is that it comes with access to a linked brokerage account. 

Best For: Taxable Investing

Charles Schwab Brokerage Account

• $0 opening/maintenance fees, account minimum, and online equity trades
• Links with Schwab Mobile for easy management
• Stocks, options, bonds, mutual funds, ETFs, and more
• Access to online screening and evaluation research tools

With no account minimums, access to a wide range of low-fee trading options and robust trading platform, a brokerage account is your ticket to the wider world of investing through Schwab.

Opening a brokerage account through Schwab also qualifies you for 24/7 access to customer service representatives online or over the phone, as well as in some 300+ physical branch locations.

Schwab brokerage accounts have the option for cash or margin, and with a variety of trading tools on their web platform, allows active traders to borrow funds to capitalize on market opportunities.  

Best For: Hands-On Retirement Savings

Traditional IRA

• Best in class service
• No annual or closure fees
• Access to Schwab’s assortment of investment options

Consistently rated best in class, Schwab IRAs have no annual or closure fees. IRAs offer tax-deferred earnings, meaning you won’t pay any taxes until you withdraw the money in retirement.

What sets Schwab’s IRA accounts apart is their financial advisory services and expertise when guiding you through the investment process. Coupled with extensive educational resources on the subject, a Schwab account is a solid choice for those seeking to save for retirement.

Roth IRA

• No income limits for contributing 
• No RMDs (required minimum distributions)

A Roth IRA is funded with after-tax dollars, meaning that contributions are not tax-deductible. However, the earnings in the account grow tax-free, and withdrawals in retirement are also tax-free. 

With a Schwab Roth IRA, there are no required minimum distributions, meaning you can keep your money invested and growing (yes, tax-free) for as long as you want. 

Rollover IRA

• Simplified setup through Schwab’s free account transfer process
• Professional guidance and resources on the subject

Rollover IRA accounts are designed for individuals who have changed jobs and want to transfer funds from an employer-sponsored retirement plan (such as a 401(k)) to an IRA. Note that if you withdraw money from your employer-sponsored retirement plan before age 59 ½ without rolling it over into another qualified plan, you may be subject to a 10% early withdrawal penalty fee. 

Thankfully, Schwab simplifies the process with their seamless, fee-less, 3-step account transfers. And with qualified professional advisors always at the ready to help, Schwab is an excellent choice to navigate the intricacies of a Rollover IRA account.

Best For: Automated Investing And Retirement Savings

Schwab Intelligent Portfolios ®

• Robo-advisory service
• No advisory fee
• Premium option with your own (human) financial planner
• Requires $5,000 minimum investment

If you prefer a hands-off approach to your investments, you might benefit from a personal robo-advisor, courtesy of Schwab Intelligent Portfolios ®.

With a little input on your financial goals and risk appetite, your robo-advisor will build, monitor, and automatically rebalance your portfolio to maximize your investment potential. 

The notable advantage to this service is that Schwab charges zero management fees–virtually unheard of in the industry. I suppose this justifies the portfolio’s somewhat high bar of a $5,000 minimum investment.

For portfolios with $25,000 in assets, upgrading to the Premium version of this service gives you access to robo-advisory service as well as personalized guidance from a Certified Financial Planner. And all for a one-time planning fee of $300, plus a $30 per month advisory fee. Considering most CFPs charge $200-$300 an hour, that’s not a bad deal.

Best For: Education Savings

529 Education Savings Plan

• Education fund with tax benefits
• Available regardless of age or income level
• Higher contribution limits compared to ESA accounts
• Option to set up an account for yourself or your child

The Schwab 529 Education Savings Plan offers various investment options, designed to provide diversification across stocks, bonds, industry segments, and investment styles.

You can either choose a static portfolio based on your goals and risk tolerance, or if the account is for your child, an age-based option that automatically adjusts as they near college age.

You can also choose between actively managed or index funds, depending on your investment style. Actively managed funds are professionally managed and have the potential to outperform the market, while index funds are a lower-cost option that tracks market performance.

Education Saving Account (ESA)

• Pay for qualified education expenses with tax-free withdrawals
• $0 minimum to open an account
• Benefits from Schwab’s $0 commission fees and ETF trades

A useful supplement to a 529 plan if you are planning for your child’s education, ESAs can help you pay for education expenses through tax-free withdrawals. 

You can open an ESA account for any child under 18, and the funds can be used for either K-12 or higher education expenses.

Best For: Health Savings

Schwab Health Savings Brokerage Account

• Allows contributions for healthcare spending
• Can be used as a "Secret IRA"
• Individuals cannot open the account directly

Unlike Fidelity's HSA account, Schwab doesn't allow individuals to open this account directly. You have to do it through a provider like Lively.

Charles Schwab Mobile Apps

Currently, Schwab offers two mobile apps: Schwab Mobile and StreetSmart Mobile Edge.

This area is a rare miss for Schwab, and it would seem to be a lower priority. Compared to the competition, both Schwab mobile apps are very much behind the curve, and we can only hope that they will be updated soon.

Schwab Mobile

The Schwab Mobile app, while a pioneer in the space at its launch, seems to remain stuck in the early 2000s, with all the clunky interfaces and dull UI to match.

Aesthetics aside, Schwab Mobile offers all the expected features, such as: 

• Research and news section
• Quick, easy account management and money transfers
• Mobile check deposit
• Biometric login with fingerprint or face ID
• Customizable layout, modules, and watchlists

Schwab Mobile also offers options and active trading, albeit in limited form. It also features a surprisingly useful AI-powered “Schwab Assistant” that responds to voice commands, such as checking market news, or asking to speak with a live representative.

Schwab Mobile seems to be a case of function over form, but it is nonetheless a reliable and powerful app for mobile banking and brokerage.

StreetSmart Mobile Edge

While Schwab Mobile at least carries functionality alongside its outdated looks, the same cannot be said for StreetSmart Mobile.

I will be brutally honest, here: This app is in serious need of a major overhaul. Although marketed towards active traders, it seems to have more ‘features’ that would repel them rather than attract. Sluggish execution of trades, errors, misquotes, labyrinthine design, and lack of live market feeds are glaring downsides that remain unaddressed. 

Unless the app receives a major update in the near future, it would be best to stick to the desktop version for active trading needs.

Charles Schwab Educational Resources

Like most other full-service brokers, Charles Schwab does an excellent job of providing abundant resources for investors to educate themselves. In particular, we found at least three areas that set them apart from the competition:

1. Stock, ETFs, and Mutual Funds Research

Schwab crunches the numbers with in-depth ratings, reports, and screenings for your potential investments. These are available in article form and as downloadable PDFs.

2. Daily Market Commentary

One exceptional resource unique to Schwab is their daily commentary and market insights by their in-house panel of experts. In addition to daily broadcasting, they publish daily market updates to keep you informed and ahead of the curve.

3. Knowledge Center

In addition to a comprehensive library of articles, Schwab customers also receive free monthly webinars, as well as PDFs of archived webinars to view at any time. While the articles tend to be a bit dry, we highly recommend Schwab’s Choiceology podcasts.

While Schwab’s educational resources are comprehensive, they are rather one-sided and lack interactive learning capabilities. No paper trading, no quizzes, and no progress tracking.

Schwab Customer Service

Schwab's customer service is always top-rated. They have excellent online, phone, and in person support.

They have over 400 branches nationwide that allow people to handle tasks and meet with financial planners in person. Most of these branches are in larger metropolitan areas.

However, this makes it a better option compared to Vanguard, which doesn't have financial centers.

How Does Schwab Compare?

Charles Schwab is typically compared most to Fidelity and Vanguard, who round out the "big 3" direct to consumer investing companies.

Charles Schwab Review - Final Thoughts

Charles Schwab is a giant in the space, and their traditional banking and investment accounts give you everything you would expect plus heaps more.

Low fees, client-centric services, and even the rare satisfaction guarantee all make Schwab a strong contender against its competitors.

That said, being one of the oldest brokers in the space has taken its toll, and certain areas of their service (such as their mobile apps) are starting to show weathering. 

As a leader in the financial space, Schwab certainly has a strong reputation. However, their apparent adamance to sticking to a more traditional approach in recent years may see them lag behind their competition–such as Fidelity.

For seasoned investors simply seeking a solid, reliable name with whom to entrust their funds, Schwab is by no means a bad choice. Their dedication to security and insuring customer funds certainly gives peace of mind for investments and banking alike. I only hope to see them modernize sooner rather than later.