2019 Charles Schwab or T. Rowe Price: online brokerage firm comparison, account fees, commissions, trading tools, pros and cons.

Charles Schwab Review T.Rowe Price Brokerage Review
Rating Charles Schwab rating 3-star brokerage firm rating
Stocks $4.95 $19.95
Options (per contract) $0.65 $1
Mutual Funds $76 $35
IRA Annual Fee $0 $20
IRA Termination Fee $0 $20
Full Account Transfer $50 Contact T. Rowe Price
Closing Account $50 Contact T. Rowe Price
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
Good
  • Great customer service via email, phone or chat
  • Excellent proprietary and third-party research at no charge
  • In person guidance, trading workshops at over 300 branches around the country
  • No inactivity fee, no account maintenance fee
  • Broad selection of investment products
  • No fee banking (checking, savings, debit cards)
  • Great interactive tools for mutual funds research
  • Free check writing with a minimum if $500 (for a standard account)
  • Free dividend reinvestment program
  • An array of premium services for high net worth investors
  • Mobile trading
Bad
  • High commissions on many mutual funds
  • Advanced trading platform is not available to everyone
  • Very high trading commissions
  • Poor trading tools/platform
  • Limited research
  • Limited services for a standard brokerage account
  • Account fees
Review Charles Schwab review » T. Rowe Price review »

Charles Schwab vs. T. Rowe Price Overview

Charles Schwab and T. Rowe Price are reputable and well-known investment companies. Both firms have been in the industry for a long time - over 30 years - and Charles Schwab is right now one of the five largest brokerage firms in the U.S. Both companies offer self-directed brokerage accounts as well as full-service managed accounts. Below is a comparison of their self-directed brokerage accounts.

Commissions

T. Rowe Price's $19.95 per trade stock and ETF commission is much higher than at the other leading brokerage companies. The broker reduces this commissions to $9.95 per trade for those who make over 30 trades in the prior 12 months and for account holders with over $100,000 in assets. Charles Schwab charges only $4.95 for the same trades - which is at least 50% less expensive than at the competitor.

In comparison, Ally Invest is charging $4.95 per trade for most clients, with the rate dropping to $3.95 for traders who make 30 or more trades in 90 days or have $100K account balance. Firstrade charges rock-bottom $0 commission with no requirements - this is the lowest rate among the U.S. discount brokers.

Charles Schwab's and T. Rowe Price's base cost for options is the same as their commissions on stocks. Schwab's per contract price on options is $0.65. This is lower than the $1.00 per contract fee charged by T. Rowe Price.

Mutual Funds and ETFs

T. Rowe Price is well known for its high-performance family of mutual funds which come with no commission to buy or sell. A surprisingly moderate $35 fee is charged at the broker for transaction-fee mutual funds.

Charles Schwab also offers a selection of mutual funds (called OneSource) with no commission. However, the cost of investing in mutual funds that are not on company's list is the highest among online brokers - $76 on buy side. There is no fee to sell these funds.

Schwab's and T. Rowe Price's mutual fund fees are higher than at some of their competitors. For example, Ally Invest and Firstrade charge only $9.95, and Etrade charges $19.95 to buy or sell mutual fund.

Like mutual funds, ETFs offer a great way to diversify investor portfolio, yet they are much easier to trade. That makes ETFs very popular among investors. A selection of 200 commission-free ETFs is offered at Charles Schwab. The competitor has none. The lack of commission-free ETFs is a big disadvantage for T. Rowe Price, especially considering that Fidelity offers 84 commission-free ETFs, Etrade - 101, TD Ameritrade -296, and Firstrade is at amazing 700!

Account Minimums and Fees

Charles Schwab and T. Rowe Price ask for a starting minimum investment of $1,000 and $2,500, respectively. It's certainly not the lowest amount but not a major sum either. For instance, TD Ameritrade has no minimum to open an account while Interactive Brokers asks for $10,000.

T. Rowe Price and Schwab both require $1,000 to open an IRA account. Most companies require zero minimum to start an IRA. Ally Invest, Etrade, Fidelity and Firstrade are among them.

In addition, there is a difference in account fees that brokerages charge. Schwab does not have account opening or maintenance fees. It doesn't charge an account termination fee either. On the other hand, T. Rowe Price has a $20 IRA termination fee and a $20 annual IRA fee, which can be waived at some instances.

Tools

Charles Schwab provides one of the best investment research tools in the industry. Its offering is beat only by Fidelity and TD Ameritrade. Broker's intuitive trading software competes well with the industry's leader - Thinkorswim trading platform offered by TD Ameritrade.

T. Rowe Price's research and trading tools pale in comparison to Charles Schwab's. If you take a look at the T. Rowe Price customer reviews you will notice complaints about lack of their website friendliness and ease-of-use.

Summary

Charles Schwab easily beats T. Rowe Price in every category, especially when it comes to pricing. Out of the two brokers we recommend Schwab to all investors. For anyone willing to shop around there are cheaper alternatives available.

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