A Review of Charles Schwab Online Investing Broker

by Investing School on March 7, 2012

Charles Schwab is a venerable old man in the investing world. Having been around for a very long time, Schwab has made the transition to the Internet smoothly and is standing right alongside many other, younger companies. Aside from their acquisitions of smaller rivals such as OptionsXpress, one might wonder if this traditional firm has the moxie to make it with the new kids on the block. Here are some answers to that question.

Application Process

Online reviews report that the application for a new account with Charles Schwab is anything other than simple. Difficulties with setting the password took several minutes to overcome. Unnecessary information is requested. Finding the page which allows you to enter your bank account information is challenging; it is located under a special tab called MoneyLink. It takes 3 days to complete enrollment and a phone call was still required to ‘activate’ the new account and it will still take several days before your transferred funds are available.

Money which you haven’t invested earns interest, but finding out just how much you are earning may take a lot of patience. On the up side, you do get checks and a debit card, and a phone call from customer service to help you out and answer questions you might have.

Pricing Structure

The price structure is simple with Charles Schwab, and a bit lower than some of the other investment firms online. You won’t need to try to figure out what your fee will be, which is great if you are a straightforward kind of investor. This also means there is little advantage to being an active trader just so you lower your fees.

  • Equities: $8.95 per trade
  • Options: $8.95 + $0.75 per contract
  • Broker Assisted: +$25 per trade
  • Platform/Maintenance Fees: $0
  • Margin Rates: 8.5% – 6.0%
  • Mutual Funds: $49.95
  • Bonds: $0 – $1 per bond
  • Automated Phone Trades: +$5


Another area where Charles Schwab has not caught up with the competition is tools. They provide the standards: watch lists, charts, analysis and free streaming quotes – but they lack a mobile app and other more advanced tools. You can access everything you need to invest, but not much more.

Research tools are better. You can glean info from many of the industry pundits like Standard & Poor’s, J.P. Morgan and Credit Suisse. Additionally, if you complete 3 or more trades each month you will gain access to StreetSmart Edge. This is an advanced platform that offers more tools in a single window. You will have to call customer service to set it up though.

The Word Online

Online Charles Schwab has great reviews. Users are happy with the service, ease of use and customer service. Very few complaints turn up at all.

The Pros and Cons

Charles Schwab has much going for it. There is a low minimum balance required, exceptional customer service, lots of local offices so you can get personal assistance and they offer normal banking services such as checking and credit cards. There are many funds you can choose from and high quality research to read.

On the down side, commissions aren’t rock bottom, and the trading tools aren’t as advanced as they could be. The lack of smart phone apps will bother some customers.

To Sum It Up

Charles Schwab is a solid, customer-friendly investment firm. It still needs to improve its battery of tools. For long term investors or those who want a more traditional personal touch, it is a good choice.

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