Charles Schwab has been around since 1971 when it was incorporated as First Commander Corporation. In 1973, it became Charles Schwab & Co. The first Schwab branch made its debut in California in 1975. Today, Charles Schwab continues to be a leading financial institution with countless account holders throughout the U.S. and abroad.
Most people associate Charles Schwab Corporation with its investing products since it has a reputation as a brokerage firm. However, the bank also offers other products, like checking and savings accounts, home loans, lines of credit, credit cards, retirement accounts, and more.
If you are interested in Schwab’s investment services, you can enjoy low fees and high returns. To date, this global company has more than $7.13 trillion in total client assets with over 34 million brokerage accounts.
How Charles Schwab Works
As stated, Charles Schwab is known as a discounted online brokerage firm but offers other banking products as well. There are more than 400 Charles Schwab locations in major U.S. cities, but you can do all your investing and banking online through the Charles Schwab mobile app or website.
Schwab pays lower rates on accounts than other financial institutions. However, it may be a suitable option if you don’t want to pay a lot of fees, hope to bank and invest with the same bank, or travel frequently across the U.S. and internationally.
Since Charles Schwab doesn’t have an ATM network, like other banks, it will reimburse you for ATM fees. Plus, the bank won’t charge you if you make transactions in other countries. When it comes to customer services, Schwab excels with 24/7 online chat support. Phone support is also available Monday through Friday from 7:00 a.m. to 11:00 p.m. EST as well as on Saturday and Sunday from 9:00 a.m. to 10:30 p.m. EST.
Just like other reputable banks, Charles Schwab’s accounts are insured by the Federal Deposit Insurance Corporation or FDIC. The FDIC insurance is for up to $250,000 for individual accounts, or $500,000 for joint accounts.
In this Charles Schwab review, you’ll learn about the pros and cons of the bank, its various investment and account options, alternatives, and more. Our goal is to help you decide whether you’d like to bank or invest with Schwab.
Charles Schwab Pros and Cons
Before you jump on the Charles Schwab bandwagon, be sure to consider these benefits and drawbacks.
Pros
- Unlimited ATM fee reimbursements: Charles Schwab doesn’t have its own network of ATMs. But it will reimburse you for any ATM fees you may incur. These reimbursements are unlimited, so you can make as many as you’d like without paying hefty fees.
- Interest-bearing checking account: The Schwab checking account is unique in that it pays out interest. This means you can earn some extra cash just by keeping your everyday spending money in a Schwab account.
- No foreign transaction fees: Many banks charge fees for foreign transactions. Fortunately, Charles Schwab does not. This is great news if you travel abroad frequently for business or pleasure.
- No monthly service fees: Charles Schwab checking and savings accounts don’t charge any monthly service fees. Other banks impose these fees, which can range from $4 to $25 and add up quickly.
- No account minimum balance requirements: Most deposit accounts don’t have minimum balance requirements. You can keep them open, regardless of how much money you put in them.
Cons
- Limited banking products: Charles Schwab is primarily known for its investment services. Therefore, you’ll find a larger selection of banking products elsewhere.
- Must open a brokerage account: To take advantage of Schwab banking products, you’ll need to open a brokerage account. Other banks don’t impose this requirement.
- Below-average interest rate on savings accounts: Compared to other savings accounts, Charles Schwab accounts offer low annual percentage yields, or APYs. It might take you more time to meet your personal finance goals.
- No branch banking services: At this time, you can only bank with Charles Schwab online. This may be an issue if you prefer a traditional in-person banking experience. Schwab branches are mainly for investment services.
- No cash deposits: Schwab does not allow you to deposit cash directly into an account. You’ll have to make a deposit with wire transfers or checks.
Charles Schwab Online Banking Services
To help you determine if Charles Schwab is a good fit for your banking needs, here’s an overview of its online banking offerings.
Checking Accounts
The Schwab Bank Investor Checking account comes with no fees, no account minimums, and a competitive annual percentage yield or APY. If you travel frequently abroad, you’ll be happy to learn that it doesn’t charge foreign transaction fees either.
To keep your account secure and monitor it at all times, you can utilize the card lock and unlock feature, transaction alerts, and travel notices. If you need to deposit or withdraw money, you can do so for free, since Charles Schwab offers unlimited reimbursements or rebates on ATMs worldwide.
Savings Accounts
With the Schwab Bank Investor Savings account, you’ll find it easier to meet your short-term savings goals. As with the checking account, this savings account is free of monthly service fees and minimum balance requirements.
In addition, you can deposit checks from anywhere using the Schwab Mobile Deposit feature on the mobile banking app. You can also access your money with the Schwab Bank Visa Platinum Debit Card, which Schwab often refers to as the check card.
Credit Cards
As long as you open and maintain an account with Charles Schwab, you may be eligible for a few credit cards from American Express. The Schwab Investor Card comes with a generous welcome bonus, no annual fee, cash back rewards on everyday purchases, and access to the 24/7 Dining and Events Assistant.
While the Platinum Card offers more rewards and the chance to use your rewards on investing, it does come with an annual fee. All Schwab credit cards are insured by American Express National Bank.
Home Loans
Charles Schwab partners with Rocket Mortgage to offer mortgages. Whether you’re seeking a conventional mortgage, a government-backed mortgage, such as the VA loan or FHA loan, or a refinance you may be able to land a competitive rate and favorable terms. Home equity lines of credit (HELOCs) are available as well.
With the Mortgage First preapproval program, you can get pre-approved for your home loan before you begin the shopping experience. As a mortgage customer, you’ll work directly with the Schwab Bank and Rocket Mortgage team to turn your dreams into a reality.
How to Deposit and Withdraw Money
Charles Schwab offers a number of ways for you to deposit and withdraw funds.
Deposits
There are numerous ways you can make deposits into Charles Schwab deposit accounts. You may transfer funds from a Schwab brokerage account or Schwab checking account. Another option is to set up direct deposit into your savings account.
In addition, you may use the Schwab Mobile Deposit feature to make a deposit from anywhere on your mobile device, mail a check to Schwab Bank, or request a wire transfer from a different financial institution.
Withdrawals
To withdraw money from a Charles Schwab account, you have two options. The cheapest and easiest option is ACH. All you have to do is fill out an Online Transfer form and choose the right destination account. ACH withdrawals take one to two business days to process. If time is of the essence, you may be better off pursuing a wire withdrawal with the “Send a Wire” feature. Just keep in mind that you’ll have to pay a wire fee.
Charles Schwab Investing Products
Since Charles Schwab is known for its investment options, it only makes sense that we go over them too.
IRAs
Charles Schwab’s lineup of IRAs includes:
- Traditional IRA: This is a viable option if you’d like to save on taxes. But you will have to pay taxes on the funds you withdraw during retirement.
- Roth IRA: A Roth IRA may be a viable option if you’d like to make tax-free withdrawals during retirement
- Rollover IRA: With a Rollover IRA, you can roll over a retirement plan from a previous employer.
- Inherited IRA: An Inherited IRA might make sense if you’ve inherited an IRA or have a retirement account that’s sponsored by an employer.
- Custodial IRA: A custodial IRA can help you save for your child’s future with their earned income.
- Education Savings Accounts and Custodial Accounts: These accounts can be beneficial if you’d like to fund education costs or savings for your child.
Mutual Funds
Mutual funds from Charles Schwab come with a long list of benefits. You’ll be able to diversify your portfolio with stocks, bonds, and commodities without paying high trading fees. Plus, you can take advantage of professional management services and ensure you get the most out of your mutual funds.
Fixed Income Investments
If you like the idea of guaranteed returns, fixed income investments from Schwab, like U.S. Treasuries and corporate or municipal bonds and certificates of deposit or CDs, are worth exploring. This is a great way to add some stability to your portfolio and potentially save some money on taxes.
Cryptocurrency
Also known as crypto, cryptocurrency refers to any type of digital or virtual currency. Charles Schwab supports various crypto investments, such as Bitcoin and Ethereum. If you’re interested in crypto investing, you can take advantage of the Schwab Crypto Thematic ETF or third-party ETFs and mutual funds. Schwab warns that crypto prices are volatile and fluctuations may result in significant losses, so this type of investing is only ideal if you already have a diverse portfolio.
Environmental, Social, and Governance (ESG) Investing
If you’re looking for an investing strategy that considers both social change and economic returns, you should explore ESG investing through Schwab. The bank allows you to choose from hundreds of mutual funds, ETFs, and managed accounts. You can view ESG stock ratings through your Schwab One brokerage account and compare ESG funds via Schwab’s comparison tools. Plus, you may enjoy guidance from Schwab’s experts.
Charles Schwab Margin Loans
Margin loans act as lines of credit. They can allow you to borrow against the securities you already have in your brokerage account. This can be a great way to increase your borrowing power so you can buy more securities. Additionally, you may use the funds to cover short-term financial expenses that are unrelated to investing. The amount you can borrow with a margin loan will be based on the type of security and its particular requirements.
Charles Schwab Financial Planning
For professional guidance on how to manage your finances and meet your financial goals, financial planning from Charles Schwab might make sense. As a Charles Schwab client, you can enjoy a free financial plan that focuses on retirement.
If you’d like ongoing support from a Certified Financial Planner as well as digital planning tools and automated investing solutions, Schwab Intelligent Portfolios Premium may be worthwhile. In addition, you can work with a Financial Consultant, which is essentially a financial advisor, to create a financial plan and investment plan that’s ideal for your unique goals.
Charles Schwab Small Business Accounts
As a small business owner, you may benefit from several small business accounts with Charles Schwab. The bank offers a plethora of plans for all types of businesses, including 401(k)s and SEP IRAs for you and your employees.
With the Charles Schwab One Organization Account, you can enjoy no monthly services, low trade commission, and fast access to your money. Other small business solutions you can use to manage your business cash flow and cash investment include money market funds and CDs.
Charles Schwab Customer Service
Charles Schwab offers a number of outlets you can use for customer service. While Twitter and chat support is available 24/7, phone support is available every Monday through Friday from 4:00 am to 8:00 pm PT as well as on Saturday and Sunday from 6:00 am to 7:30 PT.
Note that there is a different customer service line for banking and brokerage customers. In addition to English, Schwab Bank provides customer service in Spanish and Mandarin or Cantonese.
Charles Schwab Banking App
Schwab Mobile is Charles Schwab’s mobile banking and investment app. You can download it on your iOS or Android device and enjoy convenient access to any Schwab account. The app allows you to transfer money between accounts, make mobile check deposits, and quickly glance at your balances and portfolio. It also comes with tools like online bill pay, security, and custom alerts.
Charles Schwab Reviews and Complaints
Charles Schwab has an excellent reputation as a leading brokerage firm. While it isn’t accredited by the Better Business Bureau (BBB), it does earn an A+ rating but 1.74 out of 5 stars. There are a couple hundred complaints about Charles Schwab with the CFPB, but most are regarding ATM issues or banking errors.
Fortunately, Schwab has responded to all the complaints in a timely fashion. Over the years, the company has earned numerous awards, including the highest score in the J.D. Power 2023 U.S. Full-Service Investor Satisfaction Study as well as the number one spot in the Online Broker review by Investor’s Business Daily.
How to Open an Account with Charles Schwab
Charles Schwab makes it fast and easy to open an account. You can go to the Schwab website and fill out an online application in 10 minutes or less. Another option is to call customer support at 866-232-9890. If you feel more comfortable opening an account in person, you can visit one of Schwab’s locations, which are limited and usually reserved for brokerage customers.
Alternatives to Charles Schwab
If you decide that Charles Schwab isn’t right for your online banking, brokerage accounts or investment needs, consider these alternatives, which are banks and online brokers.
Ally Bank
Ally Bank is an online bank with impressive interest rates that are ten times the national average. If you feel comfortable with online banking and want to earn as much as possible in interest, Ally is worth exploring. Just like Charles Schwab, Ally doesn’t charge monthly service fees or have minimum balance requirements.
Chase Bank
Chase Bank is owned by JPMorgan Chase and has a large ATM network of over 16,000 ATMs across the U.S., unlike Charles Schwab. Chase offers two savings accounts: the Chase Savings account and Chase Premier Savings account. Chase Saving has low monthly fees, while Chase Premier Savings offers a competitive interest rate on large balances.
Barclays Bank
Barclays Bank is a global bank with several banking products for U.S. customers. You can use its digital portal and highly rated mobile app to bank from any location. It offers higher interest rates on savings accounts than Charles Schwab, plus low withdrawal penalties on its CDs. Like Schwab, it offers 24/7 customer service.
Interactive Brokers
Interactive Brokers is another brokerage firm, similar to Charles Schwab. It also offers a desktop trading platform, and its trading fees also are similar to Charles Schwab’s fees in that they’re minimal. If you consider yourself an experienced or technical trader, you’ll likely be a better fit for Interactive Brokers and its various trading platforms and account types.
Capital One
Capital One is a national bank that is admired for its 360 Checking account, which is a step up from the basic Schwab checking account. 360 Checking comes with several perks, like a high interest rate, 24/7 mobile banking, and access to more than 70,000 fee-free ATMs. You won’t have to pay any monthly fees and can bank and socialize at Capital One cafes.
Discover Bank
While Schwab is known for its investment products, Discover Bank has a reputation for its credit cards. However, both institutions offer online banking products like checking accounts, savings accounts, and mortgage refinancing. Discover also offers a convenient mobile app and is part of a large ATM network of more than 60,000 fee free ATMs.
PNC Bank
PNC Bank is a large traditional bank with branches throughout the U.S. Several of its noteworthy products are the standard savings account, children’s savings account, and Virtual Wallet, which is a hybrid between a traditional checking and savings account. The Virtual Wallet is a unique offering that you won’t find at Charles Schwab or other financial institutions.
TD Bank
TD Bank might be worth exploring if you’d like a bank with many products and services, as well as no fees on international transactions. Just like Charles Schwab, it has a highly rated mobile app you can use to perform various transactions. If you bank with TD as a student or young adult, it won’t charge you any service fees or monthly maintenance account fees.
Wells Fargo
Wells Fargo is a major bank with thousands of branches and ATMs throughout the U.S. It offers a variety of products, such as checking accounts, savings accounts, credit cards, CDs, personal loans, and mortgages. If you prefer to bank at a brick and mortar location, Wells Fargo may be a suitable option, especially if there’s a branch near you.
Bottom Line
If you already have an investment account with Charles Schwab or hope to open one, Schwab online banking may be a solid choice. You can benefit from no account minimums and a wide array of products. But if you prefer unsecured loans or a bank with in person locations, you’ll need to find an alternative option.
Frequently Asked Questions
What types of accounts does Charles Schwab offer?
Charles Schwab offers several accounts. These include checking accounts, savings accounts, CDs, home loans, education and custodial accounts, small business accounts and more.
Is Charles Schwab FDIC insured?
Yes. Every Charles Schwab bank account is FDIC insured up to $250,000 per depositor, per account. This can protect your money in the event the bank fails.
Is Charles Schwab Bank secure?
Since most Schwab account holders manage their deposit accounts and investment accounts online or via Schwab’s mobile app, security is of utmost importance. Fortunately, Schwab uses security measures like encryption technology, voice ID, card lock and unlock, and alerts.
Does Charles Schwab offer money market accounts?
At this time, Charles Schwab does not offer money market accounts. However, CDs, educational and custodial accounts, and traditional savings accounts are available.
Is it a good idea to bank with Charles Schwab Bank?
You should consider a Charles Schwab deposit account if you already invest with Charles Schwab or would like to in the future. Charles Schwab might also make sense if you want easy access to your funds and want to travel without worrying about ATM fees.
What kinds of trades does Charles Schwab offer?
There are a number of trades and investment options available with Charles Schwab. These include stocks, mutual funds, exchange-traded funds or ETFs, index funds, bonds, CDs, fixed income, and even cryptocurrency.
Is Charles Schwab a good option for beginner investors?
Yes! Charles Schwab can help you if you’re new to investing and would like to benefit from broker assisted trades, as well as assistance with research and support. Note that Schwab doesn’t offer paper trading, which can be useful for beginners.
What is the Schwab Starter Kit?
The Schwab Starter Kit is specifically designed for new investors. It includes $101 of Schwab Stock Slices, short videos and detailed guides on investing, budget planners, and round the clock access to professional advisors.
Can Charles Schwab support small business owners?
Absolutely! Charles Schwab’s platform offers a number of small business products, such as retirement accounts for employees, CDs, and money market funds.
What types of IRAs does Charles Schwab offer?
You can choose from a variety of IRAs at Charles Schwab brokerage. These include traditional IRAs, Roth IRAs, Custodial IRAs, and educational accounts.
What is StreetSmart Edge?
StreetSmart Edge is Charles Schwab’s trading platform. It comes with various research tools to optimize your trading strategy, such as real-time market data and valuable information from the Securities and Exchange Commission. It also explains Schwab mutual fund OneSource, which lists the most cost-effective mutual funds. You can customize this web trading platform to meet the needs of your unique trading style.
Does Charles Schwab have a robo-advisor?
Absolutely! The bank’s automated investing service involves a robo-advisor. As long as you have at least $5,000 to invest, you can count on the robo-advisor to design and monitor your portfolio. As an automated investing customer, you can enjoy 24/7 live support for Schwab managed portfolios.
What are some alternative options to Charles Schwab?
If you decide that Charles Schwab isn’t right for you, you may want to explore Robinhood, Webull, and Vanguard. These options can help active traders make stock and ETF trades and trade stocks.
