Compare Charles Schwab versus Fidelity: IRA, commissions, fees, trading tools, differences, pros and cons. Which online broker is better?

Charles Schwab vs Fidelity

If you are trying to decide on a quality, full-service broker, there are many great options to choose from. Two popular broker choices are Charles Schwab and Fidelity. Both offer a complete suite of financial services, and you can utilize either broker for your personal finance goals.

To make an informed decision about which broker is best suited to your needs and expectations, there are several areas of interest to consider.

Use our comparison of Charles Schwab and Fidelity to see how these two brokers stack up against each other.

Comparison Table

Charles Schwab Review Fidelity Investments Review
Rating Charles Schwab rating Fidelity Investments rating
Stocks $0 $0
Options (per contract) $0.65 $0.65
Mutual Funds $49.95 ($0 to sell) $49.99 ($0 to sell)
Initial Funding Requirement $0 $0
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
Account Closing Fee $0 $0
Trading Experience & Technology brokerage ratings brokerage ratings
Mobile brokerage ratings brokerage ratings
Research Amenities brokerage ratings brokerage ratings
Portfolio & Analysis Reports brokerage ratings brokerage ratings
Customer Service and Education brokerage ratings brokerage ratings


Funding Options

As it is one of the first experiences with any broker, let’s begin with the funding options available at Charles Schwab and Fidelity.

The funding experience is quite similar at both brokers. You can deposit with checks, set up direct deposits, link to an outside bank, and initiate wire transfers at Charles Schwab and Fidelity.

It is also possible to transfer all or part of an investment account from another broker. These types of transfers are usually known as ACAT transfers, and both Schwab and Fidelity offer them. However, note that Fidelity calls these types of transfers ‘Transfer of Assets’, or TOA for short.

Again, the ACAT (or TOA) process is similar. To initiate an investment account transfer, account holders should fill out a transfer form and send it to the broker they wish to transfer funds from. The forms can be found here Schwab and Fidelity.

Available Securities

At both Charles Schwab and Fidelity, you have the pick of the litter when it comes to securities and financial products. That said, there are some distinct differences between the two that you should be aware of.

At Charles Schwab, investors can buy into mutual funds, ETFs, money market funds, and bonds. Also available, are stocks (both domestic and foreign), OTC stocks, options, futures, and futures options.


Schwab Products


At Fidelity, mutual funds ETFs, bonds, CDs, domestic stocks, foreign stocks, OTC stocks, and options are also available. Fidelity provides access to precious metals.


Fidelity Products


The main difference between security offerings at these two brokers is the option to trade futures at Schwab. If that is something that interests you, Schwab would be an obvious choice. If the lack of futures is not a concern, however, Fidelity offers a wider selection of international stocks and OTC market stocks.

Margin Rates

For traders looking to borrow money from the broker, margin rates are identical at Schwab and Fidelity for low balances at 9.825% APY.

Investor Services

Another important consideration when choosing a broker is the types of services offered to investors. Whether you’re looking for robo-investing, financial advice, portfolio management, or anything in between, you’ll want to make sure that the broker you select can meet your needs.

Investors at Charles Schwab can take advantage of the available advice solutions. There are several services in the advice category, including automated investing, private account management, and financial planning.


Charles Schwab vs Fidelity


Depending on your needs, you can use either the premium investor services or the free offerings. In most cases, the free versions are comprised of web tools and calculators, while the premium versions allow access to a financial advisor.

Fidelity offers a bit more in terms of investor services. You’ll find services related to managed accounts for investors holding at least $250,000, as well as robo-investing, wealth management, and financial planning.


Fidelity vs Schwab


Between the two, it is easier to get access to financial guidance at Fidelity. However, neither broker is lacking in the investor services area.

Investor Education

Keeping up-to-date with all the latest investment related information and techniques is also a key component of successful investing. Both Charles Schwab and Fidelity offer a host of investor education opportunities. Which one is better? Let’s compare.

At Charles Schwab, The Knowledge Center is cleverly divided up into sections to make it easier for investors with different needs to find what they are looking for. You can find guidance related to investing during and for different life stages, preparing and responding to life’s many milestones (home buying, career change, marriage, and retirement), and general investment techniques and strategies.

The knowledge center also provides guidance on market movements, available securities, and taxes. In addition, investors can listen to a variety of podcasts covering the latest financial news and global events, read online news content, and attend Schwab’s educational webinars.

At Fidelity, investors can access investor education in the Fidelity Learning Center.

The Fidelity Learning Center includes information about personal finance, investment products, as well as investment strategies for different market conditions and for varying goals.

Like Schwab, the learning center is nicely organized and finding the resources that you need is an easy task. In contrast to Schwab, however, the majority of the learning content is geared more directly to the world of financial markets. While Schwab directs you to the financial products that you may want to consider based on particular needs, Fidelity’s approach seems more directed at trader education.

Through a variety of resources, both recorded and live, Fidelity covers topics ranging from placing your first trade to opening advanced, multi-leg options strategies.

One area that sets Fidelity apart from Schwab are the multi-week classes that they offer to their customers.

Trading Platforms

When it comes to trading platforms, the best choice may come down to personal trading style.

Desktop

Charles Schwab has bought TD Ameritrade, a partnership that puts one of the most popular trading platforms around in its corner: Thinkorswim. However, the transition has still not taken place. Today, traders at Schwab will use Schwab’s StreetSmart platform.


Schwab or Fidelity


Fidelity’s platform is no slouch, although it does feel a bit outdated. Active Trader Pro has many powerful tools that investors can take advantage of.


Fidelity or Charles Schwab


Charting in both platforms is well done, and there are many technical indicators to choose from. Order entry, including advanced order entry, is also available in both platforms. Market news and insights come though as needed on both platforms as well, but Fidelity’s insights come from a larger pool of news organizations.

StreetSmart and Active Trader Pro are comparable in many ways as full-featured desktop investment platforms. However, if we were to consider the recent addition of Thinkorswim to Schwab’s lineup of tools, the broker with the better trading platform would be Schwab.

Mobile Access

The mobile access offered by both Schwab and Fidelity are comparable in many ways, though there are some notable differences.

The mobile app for Schwab provides access to nearly every part of the investment experience. Fashioned after the webpage, the mobile app has a similar look and feel that investors should be familiar with. Notable features include watchlist building, current news and market insights, trade facilitation, and mobile check deposit. Another useful feature is the included voice control. By simply speaking to the app, investors can make basic trades, get price quotes for specific stocks and ETFs, get answers to market-related queries, and more.


Schwab versus Fidelity


Fidelity’s mobile app also offers many useful features. Investors can buy and sell securities, manage an existing portfolio, create detailed watchlists and carry out market-related research. Also available, is the mobile check deposit option, learning center access, and voice control. Where Fidelity’s mobile app outperforms is in the ‘first to market’ offerings. These include mobile tax form support, an integrated notebook, and the ability to connect the app to an Apple Watch.


Fidelity versus Charles Schwab


If we had to choose between the mobile trading experience from Schwab or Fidelity, the app that comes out on top is Fidelity’s new mobile app, the ‘Mobile beta experience’.

Fees and Commissions

Another important consideration for choosing a broker is the cost associated with investing. Both Charles Schwab and Fidelity offer zero-commissions stock and ETF trading. However, there are some other expenses that should be considered.

Broker assisted trades, mutual funds, bonds, options contracts, margin interest rates and IRA fees all comes with fees. In general, the fees and commissions that you will experience at both brokers will be quite similar, but depending on your investment style and strategies, there may be some differences.

To read more detailed information about the fees for each broker, go here for Schwab and here for Fidelity.

Alternatives



Fidelity vs Charles Schwab Summary

To summarize, Charles Schwab and Fidelity are similar in many ways, but there are some key differences that may sway your decision one way or another.

Charles Schwab offers a superior desktop trading experience (thanks to the inclusion of Thinkorswim), futures trading, and a well-organized investor education section.

Fidelity offers a better mobile experience, lower cost account advisory services, and more in-depth lessons for traders of all experience levels.




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Updated on 1/26/2022.