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Schwab Vs Fidelity: The Best Commission Brokerage For You

Making a comparison between Schwab vs Fidelity, two of the most popular commission brokerages in the country, will surely not be easy as both offer impressive websites and downloadable platforms that are filled with great features, research, newsfeeds, and educational tools to help users become financially knowledgeable.

Schwab vs Fidelity best commission brokerage

Apart from the above-mentioned, both Schwab and Fidelity offer various mobile platforms, downloadable platforms, as well as full-featured websites that are aimed at regular traders. How impressive both Schwab and Fidelity are is not surprising given the fact that both are ranked as among the top brokers in the country.

If you are seriously thinking about getting into investing, you better check these two out. But you do not need to go elsewhere because that is precisely the reason why we are doing this comparison review. Hopefully, by the end of this, you get to decide which between Schwab and Fidelity is the best choice when it comes to investing.

Meanwhile, here’s an interesting fact about investing in the United States. This, we thought, is worth sharing especially if you are new in this kind of business.

A report published by Quartz says that more Americans have invested in the stock market as of the year 2019. The highest ever — Compared to years ago when only 30% of American people owned a form of stock, as of 2019 (when the articles were published), it has jumped to more than 50%! That’s a pretty good number. Still not as much as we expected, but still high enough compared to previous years.

Still according to the report, some of the reasons why such change has something to do with the following:

  • The rising popularity of index and mutual funds makes stock market investing easier and safer.
  • The increased popularity of 401(k)-type retirement plans in the 1990s, which gave many Americans easy access to the stock market. In fact, in most cases, they are automatically invested in the stock.

Furthermore, the report says that the composition of the 50% Americans who invested are retired people, as well as those who have a defined-benefit pension plan. Also among them are low-income Americans who lack access to a retirement account or can’t afford to contribute.

Regardless of who invested and their reasons for investing, the fact that more and more people are into it is a good sign.

Now, if you are someone who is new to all of these and wanted to be one of the more than 50% who got themselves into investing – here’s one important thing to know, it is vital that you choose the right company to help you with your investments. This will help make investing easier and a breeze for you.

Having said that, as mentioned, we are going to compare Schwab vs Fidelity. We are going to look into how both fair in the industry.

In particular, we are going to present to you the following:

  • A quick comparison between Schwab and Fidelity
  • A brief backgrounder about the two
  • Notable features that are unique to Schwab as well as Fidelity
  • Minimum Initial Deposit
  • Fees and commissions
  • Investments Offered
  • Mobile app accessibility
  • Education and security

In the end, we are going to share our thoughts – our final verdict on which among the two is the best option.

But before we start our own review on both Schwab and Fidelity, here’s a very useful video from Arvabelle regarding these two popular commission brokerages. Watch the whole video by simply clicking the play button below:

SCHWAB VS FIDELITY: QUICK COMPARISON

Before we go into a more detailed review, here’s a quick comparison between Schwab and Fidelity. This hopefully gives you an idea regarding the similarities and differences between the two investment companies.

ITEM FOR COMPARISON SCHWAB FIDELITY
Min. Investment $0 $0
Stock Trades $0/trade $0/trade
Options Trades $0.65/contract $0.65/contract
Mutual Funds Yes Yes
Investment Types Stocks, OTC/Penny Stocks, ETFs, Mutual Funds, Bonds, Options, Forex, Cryptocurrencies, Futures Stocks, OTC/Penny Stocks, ETFs, Mutual Funds, Bonds, Options, Forex, Cryptocurrencies, Futures
Accounts Taxable, Joint, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, SIMPLE IRA, Trusts, Coverdell, 529, Custodial, Checking, Savings Taxable, Joint, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, SIMPLE IRA, Solo 401(k), Trusts, Coverdell, 529, Custodial, Annuities, Checking, Money Market, CDs
Broker Assisted Trade $25 $32.95
Virtual Trades None Yes
No Fee ETFs 200 91
Auto Trading None None
Accessibility Web Based, iPhone App, Apple Watch, Android App Web Based, iPhone App, Apple Watch, Android App
Customer Service Support Phone: 24/7; Live Chat: 24/7; Email; Branch Offices Phone: 24/7; Live Chat: 24/7; Branch Office

SCHWAB VS FIDELITY: BRIEF BACKGROUNDER

One way to be able to decipher which commission brokerageis better than the other is by checking out their history. Thus, here’s a brief backgrounder so we are able to get to know more about Schwab and Fidelity.

ABOUT CHARLES SHWAB

Charles Schwab & Company or more commonly known as Schwab was founded back in 1971. It is located in San Francisco. The company is tagged as the original investment discount brokerage firm.

They owned such title after they have introduced low-cost stock trading back in the 1970s. Eventually, the entire industry adopted this. Years after, Schwab continues to lead in the industry.

Schwab lives through their purpose, which states (as published on their website):

“Our purpose is to champion every client’s goals with passion and integrity. This purpose drives us to help our clients take ownership of their financial futures, helping people at all levels of income and every stage of life because investing in the future is one of the most important things people can do for themselves and their families. We believe it is critical to the health of our communities and to our society.”

True to its purpose, the company has earned the trust of its more than 9 million clients. Along with that, they have $2.6 trillion in assets under management. Moreover, Schwab operates through 300 branches throughout the United States. In addition, the firm provides its clients with in-person contact with the company apart from an extensive online and phone accessibility.

Schwab offers individual and joint brokerage accounts, custodial accounts, trust, and estate accounts, 401(k)s, Coverdell and 529 college accounts,  as well as traditional, Roth, Simple and SEP IRAs.

ABOUT FIDELITY INVESTMENTS

Fidelity Investments, popularly known as Fidelity is a privately-owned investment management company that was established in 1946. Initially, it was only a mutual fund company. However, over the years, Fidelity has eventually offered a range of services including fund distribution and investment advice, wealth management.

At Fidelity, they promised to “innovate and challenge the status quo in order to deliver more value to our customers.”

Furthermore, they aim to always follow what their founder has once said, “Take intelligent risks, rather than follow the crowd.”

Based in Boston, Massachusetts, Fidelity has become one of the largest investment management firms in the country. It has over 26 million customers, $6.5 trillion in total customer assets, and more than $2.4 trillion in global assets under management.

Apart from the company’s investment services, Fidelity also provides retirement services and life insurance.  In fact, it has already served more than 23 million accounts for both its retail and institutional investors. In addition, it also boasts having over 140 retail locations all over the country.

Similar to Schwab, Fidelity Investments also offers individual and joint brokerage accounts, trust and estate accounts, 401(k)s, and traditional, custodial accounts, Coverdell and 529 college accounts, Roth, Simple and SEP IRAs.

SCHWAB VS FIDELITY: NOTABLE FEATURES

Now that we already have an idea about the history of both Schwab and Fidelity, let’s move on to checking out some notable features that are unique to both commission brokerages.

SCHWAB

– Schwab Intelligent Portfolios

To be able to participate in Schwab Intelligent Portfolios, you will need at least $5,000. What is does it that it makes use of an advanced algorithm. It also uses the management services of Charles Schwab Investment Advisory, Inc. to be able to create a portfolio of low-cost ETFs, which extends across as many as 20 different asset classes, which includes real estate as well as commodities.

– Personal Portfolio Review

With at least $25,000 in your account, you can take advantage of Schwab’s portfolio consultation. This helps you become more knowledgeable when it comes to your goals, as well as helps in evaluating your existing investments that are related to your goals. This feature also provides specific recommendations as well as the next steps. In addition, Schwab also offers 24/7 customer service to assist you with your day-to-day investment needs.

– Tax-loss harvesting

Schwab provides you with tax-loss harvesting as long as you have at least $50,000 with them. Tax-loss harvesting is an ideal investment strategy that helps minimize capital gains, which in turn enables you to set aside more of your investment earnings.

– Charles Schwab Bank

Yes, Schwab does have a banking arm. Just like any bank, it provides full-service banking. Thus, enabling you to the bank where you invest. Charles Schwab Bank provides checking through the Schwab Bank High Yield Investor Checking Account. What’s nice about is that it does not only pays interest but also requires no minimum account balance and no account fees.

More so, the account provides unlimited fee rebates from ATMs worldwide. Now, that’s really a standout, right?

– Portfolio Management Services

If you are someone who needs help in managing your investments, Schwab does have a lot of different services available for you like Diversified Managed Accounts and Schwab Managed Portfolios. In addition, the firm also offers fully managed accounts and also more specialized programs like Thomas Partners’ dividend growth strategy and their Windhaven Strategies — both focusses in global diversification.

FIDELITY

– Fidelity Active Trader Pro

This feature lets you see real-time streaming market data, as well as advanced charting and real-time profit-and-loss estimates on hypothetical transactions, in one-click trading. This makes it ideal for investors who prefer doing it themselves.

– Fidelity Investment Rewards Visa Card

While Fidelity does not offer a bank account, they do offer a Fidelity Investment Rewards Visa Card. This card lets you deposit the cashback rewards directly into your brokerage account through the Credit Options Plus Cashback feature. If you are familiar with microwaving, it’s something similar to that.

– Fidelity Portfolio Advisory Service

Fidelity Portfolio Advisory Service is provided to those with a minimum investment of $50,000. This advisory service is ideal for investors who need help in managing their portfolio. Strategic Advisers, Inc. is Fidelity’s registered investment adviser.

– Fidelity ZERO Index Funds

As stated, this feature entitles investors to zero fees regardless of how much investment they have with Fidelity. Fidelity does have two new funds namely the ZERO Total Market Index Fund, which mirrors the total return of a large range of exchange-listed U.S. companies, as well as the ZERO International Index Fund that corresponds to the total return of foreign developed and emerging stocks. Neither of the two requires any minimum investment.

SCHWAB VS FIDELITY: MINIMUM INITIAL DEPOSIT

Any investors will surely want to know this. It’s safe to say that it is fundamental if you want a commission brokerage to manage your investments.

With Schwab, the firm requires a minimum initial deposit amounting to $1,000. As with the IRA, you can open one without anything as long as you enroll with Schwab’s Automatic Investment Plan for at least $100 per month.

As with Fidelity, they do not require a minimum investment, which makes it a winner between the two if you are to gauge the best based on this aspect.

SCHWAB VS FIDELITY: FEES AND COMMISSIONS

Another important thing that every investor needs to know when dealing with commission brokerages is annual fees, as well as commissions.

For your reference, here’s how much you need when dealing with either Schwab or Fidelity:

SCHWAB

Schwab does not charge either account fees or inactivity fees.

Meanwhile, here’s how much the commissions are based on the account type:

  • Stocks and ETFs — $4.95 per trade
  • Preferred stocks and REITs — $4.95 per trade
  • Options — $4.95 + $0.65 per contract
  • Mutual funds — $76 to buy, but no fee to sell
  • Schwab OneSource Funds — No fee
  • US Treasury Securities — No fee
  • Other fixed income securities — $1.00 per bond, with $10 minimum and $250 maximum

In addition, Schwab also offers more than 200 ETFs at $0 commission.

FIDELITY

Just like Schwab, Fidelity does not charge either account fees or inactivity fees.

As with commission, here’s how much Fidelity charges:

  • Stock and ETFs — $4.95 per trade
  • Options — $4.95 per trade + $0.65 per contract
  • Mutual funds — $0 – $49.95 per trade
  • Bonds and CDs — No fee on new issues, $1.00 per bond on a secondary issue

In addition, Fidelity does offer 91 commission-free ETFs.

SCHWAB VS FIDELITY: INVESTMENTS OFFERED

As an investor, you have to be fully aware that there are various investment types out there. Thus, it is important that you know exactly what you want and where to put your money into.

To give you an idea, Schwab offers just about every investment security there is, which includes stocks, as well as bonds, exchange-traded funds (ETFs), options and real estate investment trusts (REITs). More so, Schwab also offers over 3,000 no-load/no transaction fee mutual funds. Mutual funds are ideal for any investor who invests most or all of his or her portfolios in funds.

Just like Schwab, Fidelity also offers stocks, bonds, ETFs and options. In addition, they also have over 4,700 mutual funds offered by both Fidelity and non-Fidelity sponsors.

SCHWAB VS FIDELITY: MOBILE APP ACCESSIBILITY

In this day and age, mobile app accessibility is very important. People nowadays prefer anything mobile.

Good thing is, both Schwab and Fidelity offer their own Mobile Apps.

Schwab is available in Apple iOS and Google Android. They are also available on Apple Watch.

As with Fidelity, it is also available in both Apple iOS and Google Android. However, based on customer reviews, Apple iPad seems to work better because it has more functionality as compared to an iPhone.

SCHWAB VS FIDELITY: EDUCATION AND SECURITY

Schwab provides 4 to 7 hours of video content every trading day through their Schwab Live Daily. It is available for both clients and non-clients alike. They also have the Schwab Learning Center, which covers a broad and deep range of educational content focusing on different skill levels.

When it comes to security concerns, Schwab’s security guarantee covers losses in any Schwab accounts due to unauthorized activity. The firm does also supports the Symantec VIP app and physical tokens for two-factor authentication.

Meanwhile, Fidelity does have an online Learning Center, which provides useful articles, infographics, videos, as well as webinars. Just like Schwab, Fidelity has a security guarantee, wherein you will get reimbursed should an unauthorized activity happens. The firm also offers two-factor authentication via the Symantec VIP app.

FINAL THOUGHTS ON SCHWAB VS FIDELITY

Both Schwab and Fidelity do offer amazing features for their members. To be honest, it is not surprising at all given the fact that both are among the best in the industry.

To choose one between the two is quite a challenge because both are really good! We thought perhaps you should look into your investment preferences instead to be able to pick the perfect commission brokerage.

Just a quick run-through, Schwab is ideal for investors who need help in managing their portfolios, while Fidelity is good for self-directed investors, especially those who trade on a regular basis.

Again, it’s hard to pick between the two. While we did a very insightful comparative review between Schwab vs Fidelity, at the end of the day, we got to let you pick your choice based on what your needs and preference are.

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