Betterment vs. Charles Schwab Introduction
Charles Schwab and Betterment are very different brokerage firms. They use different software,
follow different investing approaches, and offer different asset lineups. Before opening an account at either firm, consider
our research.
Broker Cost
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0.65 per contract
|
$0
|
$0
|
|
Betterment
|
na
|
na
|
na
|
0.25%
|
0.25%
|
Services
Websites
Charles Schwab: Satisfaction guarantee, ACAT reimbursement, and $0-fee trades at Charles Schwab.
Betterment:
Get a 0.25% annual fee robo investing service with Betterment.
Which Firm Has the Better Investment System?
At Charles Schwab, investors can open both self-directed and advisory accounts. The broker continues to
provide self-directed trading in a wide range of products. These include:
- Stocks
- Futures contracts
- Forex
- Options
- Bonds
- Mutual funds
- Exchange-traded funds
- Closed-end funds
Betterment is no longer the exact opposite of Charles Schwab in this category. In addition to robo accounts, Betterment now offers self-directed investing accounts. Still, the company remains much more limited than Schwab in terms of products and trading tools.
Inside of managed accounts, Betterment offers a limited lineup of ETFs and model portfolios. Its self-directed accounts add stocks and ETFs, but the broader selection of funds and asset classes that Charles Schwab clients can access still is not available here.
Unlike Charles Schwab, Betterment charges an annual management fee on its managed portfolios. Pricing starts at $5 per month or 0.25% annually, depending on balance and recurring deposits. For an additional 0.40% on the first $1 million, and with a $100,000 balance, Betterment customers can access the company’s licensed financial experts.
Winner: Charles Schwab
Which Broker Is Better for Margin Trading?
Charles Schwab offers both cash and margin accounts within its self-directed service. It’s easy to switch an account from one setup to the other (go to My Profile under Client Services to find the cash/margin link).
The primary disadvantage of Charles Schwab’s margin service is the cost. The broker charges up to
11.825% for a margin loan right now.
Despite the weaknesses of Charles Schwab’s margin service, at least it has one. Betterment only offers cash accounts.
Winner: Charles Schwab
Which Brokerage Firm Has the Better Mobile App?
As a robo firm, Betterment still likes to emphasize simplicity. This focus is very clear on its mobile app. The interface is clean, but there really are not many advanced tools to speak of. There are links to connect both external and Betterment accounts to the existing account, and eligible Betterment Checking customers may also have access to mobile check deposit.
Over at Charles Schwab, we found two mobile apps. Both of them have mobile check deposit and so much more. One app is the main Schwab app, although that description is a little misleading. It has a lot of powerful trading and account-management features.
For example, the order ticket has separate buttons for sell short and buy to cover. Trailing and stop orders also make appearances. There are multiple duration choices on the order ticket.
And then there are lots of educational resources on the app, including news articles, market information, watchlists, alerts, and client-service tools.
Winner: Charles Schwab
Who Has Better Computer Software?
Betterment no longer uses a robo-only approach on its website. In addition to managed investing, the site now offers self-directed investing. Even so, it remains very basic compared to Charles Schwab’s software lineup. During our research, we did find the site easy to navigate.
Charles Schwab’s website is also easy to navigate. Unlike Betterment’s site, though, Schwab delivers tons of resources and tools. One example is its much stronger web-based trading and research setup.
Account-management tools are also better on the Schwab website than on the Betterment site. Examples of self-help tools that we found on the Charles Schwab website include tax-lot features, forms, transfers, and deeper trading controls.
Then there is the thinkorswim desktop application. Like its mobile app cousin, this software
is extremely advanced with many great trading tools. Examples include robust charting, real-time data, and advanced strategy tools.
Winner: Charles Schwab
Which Brokerage House Is Better for ETF Research?
Although Betterment offers ETFs in both managed and self-directed accounts, it doesn’t provide anything close to the online ETF research and screening tools available at Schwab.
Over at Charles Schwab, we found an ETF screener that can scan through thousands of funds based on many criteria. ETF profiles have quite a bit of information, including top 10 holdings, growth of $10,000, and an income estimator. Popular funds have pdf reports from major security analysts.
Winner: Charles Schwab
Which Firm Is Better in Miscellaneous Services?
Access to IPOs: Charles Schwab’s website has tools and education for IPO investing. Betterment does not offer IPO trading.
Fractional Share Trading: Betterment’s robo service does purchase funds in fractional shares, and its self-directed service also supports fractional investing.
Charles Schwab offers fractional shares for most stocks and ETFs.
Dividend Reinvesting Plan: Charles Schwab offers dividend reinvesting. Betterment’s self-directed accounts currently do not support automatic dividend reinvestment.
Extended Hours Trading: Charles Schwab, but not Betterment, offers extended-hours and 24-hour trading.
IRAs: Retirement accounts can be opened at both firms. Betterment offers Traditional, Roth, SEP, and Inherited IRAs, while Charles Schwab has the broader overall retirement lineup.
Cash Management Tools: Both firms have Visa debit cards with ATM fee perks, and both also offer paper checks or checkwriting.
Automatic Purchases of Mutual Funds: It’s possible to establish recurring purchases of mutual funds inside a Charles Schwab account.
Winner: Charles Schwab
Recommendations
Mutual Fund Trading: Charles Schwab is it.
Beginners: Betterment is simpler for hands-off investors, while Schwab is better for those who want room to grow into more tools.
ETF/Stock Trading: Charles Schwab with its excellent software.
Long-Term Investors & Retirement Savers: Charles Schwab has the larger selection of education
and retirement accounts. Plus, it has target-date mutual funds.
Small Accounts: Charles Schwab or Betterment self-directed investing.
Websites
Charles Schwab: Satisfaction guarantee, ACAT reimbursement, and $0-fee trades at Charles Schwab.
Betterment:
Get a 0.25% annual fee robo investing service with Betterment.
Charles Schwab vs Betterment Verdict
Charles Schwab is better than Betterment in most categories, although Betterment is much more competitive today than a robo-only comparison would suggest.
Updated on 4/17/2026.
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