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

Comparison Introduction

Traders looking for a good value in investing services have probably heard of both Charles Schwab and Etrade. With millions of accounts, these firms are some of the leaders in the industry. So which is better - Etrade or Charles Schwab? Let's find out.

Comparison Table

Fees and Account Minimums

Etrade’s and Schwab's charge for ETF or stock trades is $0. To trade options, both Etrade and Schwab clients pay an additional $0.65 per contract.

Placing a trade with a human broker at Schwab is $29.95, while Etrade charges a significantly lower $25.

Accounts at both firms come with no inactivity fees or account maintenance fees. Schwab and Etrade do not require an initial deposit. No-fee IRAs are available at both firms.

Overall, this category is pretty even.

Mutual Funds

Schwab has over 6,500 mutual funds available to trade. Over 3,500 of these are OneSource funds, which are no-load and no transaction fee. Mutual funds that do carry a transaction fee are a pricey $49.95 to buy, although they're free to sell.

Etrade has more than 10,000 mutual funds, all of which are free to trade.





Etrade wins this category due to no commission on mutual funds.

Promotions

Charles Schwab: Satisfaction guarantee and $0-fee trades at Charles Schwab.

Etrade: No commissions on stocks and ETFs.

Research and Education

Schwab has good research capability. Traders have access to third-party securities reports for free. Customers also have free access to the useful Schwab Equity Ratings, which analyze 3,000 U.S. stocks and grade them on an A, B, C, D, and F scale. The broker also issues report cards on mutual funds at no cost.

At Etrade, investors have access to in-person seminars, articles, and on-demand videos. Several financial topics are covered, such as options, equities, and IRA’s. The firm has excellent screeners for all major securities: stocks, options, bonds, and mutual and exchange-traded funds.

Pretty close in this category.

Customer Service

Schwab's customer service can be contacted via an on-line chat system. Customers can also contact the firm by phone, e-mail, or fax. The phone service is staffed 24 hours a day, 7 days a week. Schwab also provides customer service in Chinese. The broker provides phone numbers for customers traveling outside the U.S. Schwab has more than 325 brick-and-mortar locations across America.

Etrade also has branch locations, but just 30. Customers can contact the firm day or night via phone. Also available is an on-line chat system, fax, and e-mail. Using the web site, customers can perform a variety of customer service tasks, such as order a debit card or transfer funds.

Schwab wins this category due to its large number of retail locations.

Trading Tools

The Etrade web site is well designed and easy to use. The firm's Total Trade Ticket can be used to place orders for a variety of securities, such as mutual funds, stocks, and options. Advanced platform, Etrade Pro, is available for frequent traders, in both desktop and browser formats.





Schwab's web site is simple and easy to learn. Available within the web site is Trade Source trading platform. It's user friendly, but only offers limited trading information. The broker’s top trading platform is thinkorswim, available from the cloud or as a desktop application. thinkorswim is free of charge and is available to all clients.

Pretty even here.

Mobile Platforms

Schwab provides its customers with applications for Apple, Android, mobile web, and Kindle Fire. The app is user friendly and intuitive. Traders have the ability to transfer funds, get in touch with customer service, perform a mobile check deposit, pay bills, or place trades.





Etrade also offers mobile platforms for its customers free of charge. These apps can be used on iPad, iPhone, Apple Watch, Windows phone, Android phone and tablet, Amazon Fire phone, and Kindle Fire HD. The interface is trouble-free. Many valuable features are available, such as charts, videos, mobile check deposit, and bill pay.





Etrade wins this category due to its platform for Apple Watch and its CNBC video library.

Banking Features

Schwab operates an FDIC-insured bank that gives its brokerage customers a checking account. It comes with checks and a Visa debit card at no cost. ATM fees are reimbursed globally, and the account is insured up to $250,000. The firm recently made Schwab Bank the default core account in its brokerage accounts.

Etrade has an FDIC-insured bank that provides a checking account with the regular $250,000 protection. The account comes with a Visa debit card and checks, and can be linked to an Etrade brokerage account. The firm rebates ATM withdrawal fees only for customers who have a minimum balance of $5,000, or who have total balances across all Etrade accounts of at least $50,000.

Schwab wins in this category.

Promotions

Charles Schwab: Satisfaction guarantee and $0-fee trades at Charles Schwab.

Etrade: No commissions on stocks and ETFs.

Additional Features

At Schwab, investors can trade foreign stocks in a regular brokerage account utilizing the company's Global Investing Services desk. The broker also offers a separate international account where clients can buy and sell securities in twelve foreign markets using eight currencies.

Unfortunately, Etrade recently eliminated both its global investing and forex services. Nevertheless, it continues to offer futures services with a trading fee of just $1.50 per contract. Schwab has both forex and futures trading.

It's a win for Schwab.

Charles Schwab vs Etrade: Results

There were three ties, Schwab won three categories, and Etrade was victorious in three. It's a tie.

Open Charles Schwab Account

Open Schwab Account

Open Etrade Account

Open Etrade Account

Continue Reading

• Etrade vs Wells Fargo
• Schwab Referral Code
• Merrill Lynch vs Charles Schwab
• Etrade Wire Time
• Etrade Robo Advisor Review