E*Trade versus Charles Schwab - compare IRA, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better?


Overview of Charles Schwab and E*Trade

E*Trade and Schwab have a lot of similar brokerage services. But before you open an account with one of them, be sure to study their differences first. This article will help you do just that.


Broker Fees

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Charles Schwab $0 $76 ($0 to sell) $0 + $0.65 per contract $0 $0
Etrade $0 $19.95 $0 + $0.65 per contract $0 $0


Services

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Charles Schwab
Etrade


Trading Software

Although both Schwab and E*Trade have investment professionals who are willing to make trading decisions for you, if you decide to do everything yourself you’ll need to be aware of what software is available to you.

At Schwab, there’s a user-friendly website with a trade bar. It provides vital security data, such as volume and bid-ask spread. One thing we don’t like about it is that it can’t actually submit orders to the exchanges. You’ll have to use order forms on web pages for that. These are simple enough and provide everything you need.

If you add futures trading to your account, you’ll have access to StreetSmart central, a browser system. It has the same type of trade bar, although the web order ticket offers more complex order types.

The software we like most at Schwab is the company’s desktop program. Called StreetSmart Edge, this one offers a lot of great features, not least of which is a simulated trading feature, great for beginners.


StreetSmart Edge


We also like direct-access routing (just 2 venues, though), Level II information, and multi-leg derivative strategies.

Looking at E*Trade, we see a lot of the same great resources. However, the broker’s website doesn’t have a trade bar, although compared to Schwab’s deficient one, it’s not a huge failure.

We like E*Trade’s very user-friendly website, which makes navigation a breeze. A browser platform called Power E*Trade offers many good features. We found Bloomberg TV, advanced charting, and an economic calendar.

Active traders can gain access to the brokerage firm’s desktop software E*Trade Pro. It offers sophisticated option tools, direct routing, and Level II data. The one weakness E*Trade has here is that Schwab doesn’t impose any trading minimums on its desktop system.


Etrade Pro


Schwab has branched out to artificial intelligence by developing a skill for Alexa on Amazon’s Echo devices. E*Trade has not rolled anything out just yet.


Mobile Devices

While we were impressed with both firms’ PC trading tools, we were even more impressed with their mobile apps. E*Trade actually offers two. The first is the regular (and older) app. Despite being the older of the two, we think it is the better one. For example, charting can be done horizontally. On the second app (called Power E*Trade after its PC cousin), a chart cannot be rotated horizontally.


Fidelity Investments vs Etrade


Other great mobile features at E*Trade include streaming financial news, advanced order types, watchlists, option chains, and Level II data.

Moving onto Schwab, we get just one app, and this may actually be an advantage, depending on how much simplicity you’re looking for. Bloomberg business news is free of charge, and there are many news articles as well. A chart on the app can be shown in horizontal mode for better studying. The software also provides many graph styles and multiple technical indicators.


Etrade vs Schwab


We appreciate the incorporation of Touch ID on both apps, which speeds up the login process.


Banking Features

While both companies in our examination are usually thought of as brokerage firms, they actually operate FDIC-insured banking units; and they offer some pretty good perks that aren’t always available through traditional banks.

For example, Schwab offers a checking account that provides not just free checks and a debit card, but also unlimited ATM fee reimbursements. The forex fee is 0%. Checks can be deposited to the account via a mobile check deposit tool on its app. It currently pays 0.35%, a decent figure. Schwab Bank also offers a savings account that pays 45 basis points per year. Neither account has any fees or minimum balance requirements.

E*Trade offers two checking accounts, one of which offers ATM fee refunds. This one carries a minimum balance requirement ($5,000) to avoid a monthly fee ($15). E*Trade has a 1% foreign currency surcharge, and only applies its ATM fee refund policy to cash machines in the United States. (Schwab’s policy applies to any cash machine anywhere in the world). E*Trade’s second account has no account requirements, no fees, and no ATM perks.

E*Trade Bank’s savings account pays a very impressive 2.1% in interest. There is a $10 monthly fee if the account’s average balance drops below a grand.


Available Investment Vehicles

Logging into our E*Trade account, we found bonds, stocks, ETF’s, options, futures, and mutual funds. The company has closed its forex trading business, although it does host an IPO page.

At Schwab, we found equities, bonds, options, ETF’s, closed-end funds, mutual funds, annuities, and futures. One prominent strength that Schwab has here over its rival is global trading services. Outside of investing, Schwab also provides mortgages through its banking arm.


Customer Support Channels

We were able to contact both E*Trade and Schwab through multiple methods. We used phone calls to reach an agent, and we weren’t on hold very long. Both companies also offer online chat (no robo chat as of yet). With E*Trade’s, we have always received competent service, while Schwab erred by providing an incorrect answer once.

Both brokerage firms also operate nationwide networks of branch locations. Schwab manages 345 offices in multiple U.S. states. California has 64, and Oklahoma has 2. Most offices are open during the weekday, although some are by appointment only.

E*Trade currently has just 30 locations, which obviously puts it at a pretty significant disadvantage compared to its competitor here. Several states don’t have one location.

There are self-help sections on both brokers’ websites where the above customer service channels can be bypassed entirely. On Schwab’s site, there is a link to lock or unlock a debit card, among many other functions. On E*Trade’s site, we found a checkbook reorder form, and many other services.


Promotions

Etrade: At E*TRADE, get $0 trades + 65₵ per options contract.

Charles Schwab: Make $100,000 deposit and get 500 commission-free online equity and options trades.



Mutual Funds and ETF’s

Good resources are available for fund traders at both E*Trade and Schwab. The latter provides almost 5,900 mutual funds with 3,400 having neither load nor transaction fee. We found the broker’s screener easy to use, and it offered lots of search criteria.

E*Trade provides over 8,400 mutual funds; and roughly half of these carry no transaction fee and no load. Its fund screener is very good, although Schwab’s provides more search criteria.

ETF traders have good selections as well. Schwab offers roughly 270 funds that are free of commissions; whereas E*Trade provides almost 300 funds with zero trading fees.


Recommendations

If you trade infrequently, we’re going to suggest Schwab over E*Trade. StreetSmart Edge is available to all Schwab customers, whereas E*Trade Pro carries trading minimums.

For mutual fund investors, we suggest E*Trade due to its large list of funds. Same goes for ETF traders.

If you’re looking for in-person service, probably Schwab is your best bet; but check your area for an E*Trade location before opening an account. For online service, E*Trade is very good.

We recommend Schwab over its rival for IRA’s and retirement services. E*Trade imposes several unnecessary $25 IRA fees, which don’t exist at Schwab.

If you travel internationally, we definitely propose Schwab due to its 0% forex charge and unlimited global ATM fee refunds, neither of which are available at E*Trade.

If you want a guaranteed high rate of return, go with E*Trade’s savings account.

Bargain seekers should take a look at Firstrade Review.


Charles Schwab vs E*Trade Summary

Schwab and E*Trade are very close in most areas, but there are specific differences. If you’re aware of these before you open an account, you should be able to choose the right firm for your investment needs.


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