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Charles Schwab vs. Fidelity Investments

Charles Schwab and Fidelity are well-respected powerhouses in the brokerage sedulousness. Both offer customizable trading platforms, mobile apps, and low costs to millions of clients. As of Dec. 31, 2020, Schwab had 29.6 million strenuous brokerage accounts and $6.69 trillion in customer assets. Fidelity is larger still, with 36 million brokerage accounts and $11.1 trillion full customer assets (as of June 30, 2021).While these two brokers have a lot in common, we’ll look at some of their differences to lend a hand you determine which one is the right fit for your investment and trading needs.

  • Account Minimum: $0
  • Fees: $0 for stock/ETF trades, $0 with the addition of $0.65/contract for options trade
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  • Account Minimum: $0
  • Fees: Free stock and ETF pursuit, $0.65 per options contract
Read full review

Usability

Charles Schwab makes it easy to open and wherewithal an account, and you can do so online, via mobile app, by phone, or at one of its 360+ branches. Fidelity also has a straightforward account opening process, but the paperwork to add account properties like options trading or margin can be time-consuming.

Both brokers offer reasonably easy-to-navigate websites with cover tools, portfolio analysis, news, educational content, and basic order tickets, as well as customizable desktop stands.

Schwab and Fidelity offer similar experiences regarding the trading experience, costs, research tools, customer serving, and security standards. Most investors would do fine with either broker in this context. The choice may come across down to your preferred trading instruments: only Schwab offers futures trading, and only Fidelity subsidizes forex. It’s worth noting that Schwab also offers more international trading opportunities.

Trade Know-how

Desktop Trade Experience

Schwab and Fidelity offer straightforward web-based trading platforms. While Fidelity’s web podium is easier to use, the quotes are delayed by 15 minutes unless you sign up for real-time quotes.

Each broker also offers a desktop swop platform: StreetSmart Edge from Schwab and Active Trader Pro from Fidelity. These platforms offer profuse functionality than their web-based counterparts, with more customization options, more order types, and beat charting. StreetSmart Edge has about 40 technical studies, while Fidelity has more than 60 on Functioning Trader Pro (both amounts are relatively low by industry standards). Overall, traders will find similar tools on either party line, so the edge here purely from a trading experience is too close to call.

Mobile Trade Experience

Data tides in real-time on both brokers’ mobile apps, and you can stream quotes on multiple devices simultaneously. You can trade the same guild types and asset classes as the brokers’ respective web/desktop platforms, except for individual bonds, which aren’t close by on Fidelity’s app. Both brokers offer news and research on the app, but neither supports drawing tools for charting.

The apps receive identical ratings on the App store, but Fidelity has far more reviews: Schwab has 4.8 stars from about 492,000 re-examines, while Fidelity has a 4.8-star rating from some 1.7 million reviews. Overall, we found that either app should fit the needs of unconstrained investors, but only Schwab’s app supports conditional orders, which could be an important distinction for active traders.

Run of Offerings

Schwab and Fidelity offer all the usual trading products, including stocks, ETFs, bonds, and mutual breads. However, only Schwab provides access to futures and crypto (albeit, only Bitcoin futures), and it has more chances for international trading. At the same time, you can trade forex only at Fidelity (the company doesn’t post any information there this asset class on its website, so you have to call for details). Ultimately, a preference for one broker over the other may move along disintegrate down to the brokers’ range of offerings.

Charles Schwab vs. Fidelity Range of Offerings
Asset Charles Schwab Fidelity
Shorten Sales  Yes Yes
No-Load, No-Fee Mutual Funds  4,220 3,457
Bonds  Yes Yes
Futures/Commodities  Yes No
Futures Options  Yes No
Complex Options  4 get goings 4 legs
Robo Advisory Yes Yes
Cryptocurrency  Bitcoin futures only No
International Exchanges 60 25
Forex  No Yes
Fractional Shares  Yes Yes
OTCBB and Penny Stereotypes Yes Yes

Order Types

Both Schwab and Fidelity support the usual order types on their web and desktop platforms. Tranquillity types include market, limit, stop limit, and conditional orders like one-cancels-the-other (OCO) and one-triggers-the-other (OTO). However, sole Schwab supports advanced order types on its app, which gives Schwab the edge here.

Trading Technology

Schwab usages a proprietary wheel-based router for order management purposes. Most stock orders and multiple exchange-listed options get routed to third-party wholesalers, which weights execution quality with the company’s cost savings. The company reports a net price improvement of $0.62 per equity commitment up to 99 shares. Its average execution speed is 0.07 seconds if you trade 1-99 shares and 0.05 for orders of 100 to 2,000 apportionments—above that, the speed drops back down to 0.07 seconds. The broker accepts an average of about $0.09 per hundred allocates in payment for order flow.  

Meanwhile, Fidelity’s smart order routing technology seeks the best price handy and can access all types of market venues, including dark pools, exchanges, and market makers. The company reports a net expense improvement of $2.64 per 100-share equity trade—well above the $0.48 industry average. Fidelity has an usually execution speed of 0.04 seconds, and it does not accept payment for order flow for stocks or ETFs (it does meet an average of $0.2514 per options contract).  

Overall, Fidelity wins in the trading technology department due to its price improvement, implementation speed statistics, and lack of payment for order flow on equity trades.

Costs

You’ll find similar costs at Schwab and Fidelity. Both give birth to $0 commissions for online equity, options (both have a per-contract fee of $0.65), ETF, and OTCBB trades. You’ll pay $49.95 at either stockjobber to buy mutual funds outside the no-fee list. Broker-assisted transactions are $25 at Schwab and $32.95 at Fidelity. 

Margin rates are indistinguishable for both brokers at balance levels up to $499,999. Above that, Fidelity’s margin rates drop, but you have to requirement ready for pricing at Schwab (so we can’t compare). Some of the other typical account costs are cheaper at Fidelity. For example, Fidelity doesn’t concern paper check, domestic wire, or account transfer fees—but you’ll pay these at Schwab. Overall, these cost contradistinctions give Fidelity the slight edge here, but the brokers are essentially the same for actual trading costs.

Account and Into Amenities

Schwab and Fidelity offer comparable account and research amenities, including everything you would expect from a gigantic broker. At either broker, you’ll find portfolio margining, stock loan programs, dividend reinvestment programs, and a train of screeners—with the option to screen using ESG/SRI factors. Both brokers also offer numerous financial adding machines and tools, trading idea generators, and streaming news from various sources. Overall, both brokers experience similar offerings, but Schwab has a slight lead due to its large selection of in-house and third-party market reports.

Portfolio Criticism

Charles Schwab’s and Fidelity’s portfolio analysis offerings are similar. You can access real-time buying power and margin communication with either broker, plus real-time unrealized and realized gains. You can link holdings from outside your account to get a culminate picture of your finances. Both offer tax reports, but only Schwab lets you calculate the tax impact of future pursuits, which gave Schwab a slight edge in our ratings.

Education

Schwab and Fidelity offer a respectable range of instructive content, including articles, videos, webinars, and live events. Schwab also hosts several educational podcasts, while Fidelity requires live coaching sessions with the “Trading Strategy Desk,” where you can discuss questions with a professional traffic coach. Overall, we found that Schwab has better educational offerings if you want to learn about life devises (e.g., living in retirement). At the same time, Fidelity offers more investor and trading-specific content.

Customer Service

Schwab and Fidelity suggest flexible customer service, with 24/7 phone line support and access to live brokers and brick-and-mortar subdivision offices for in-person support. You can count on reliable customer service from either broker.

Security

Schwab and Fidelity’s shelter are up to industry standards. You can log into the apps using biometric (face or fingerprint) recognition, and both brokers protect against account wastings due to unauthorized or fraudulent activity. 

Schwab carries excess Securities Investor Protection Corporation (SIPC) insurance made by London insurers with an aggregate limit of $600 million, limited to a combined return to any customer of $150 million, take ining cash of up to $1.15 million. Fidelity’s excess SIPC insurance has a per-customer limit of $1.9 million on uninvested scratch with a total aggregate limit of $1 billion. Overall, investors can be confident in the security standards of either go-between.

Our Verdict

Schwab and Fidelity are both robust brokerages with strong trading platforms that can serve the necessities of every level of investor. Because Schwab and Fidelity offer a similar experience, choosing one over the other isn’t unceremonious. Most investors would do fine with either broker when it comes to the trading experience, costs, check out tools, customer service, and security standards. The choice may come down to the asset classes each broker weathers: Only Schwab offers futures trading, and only Fidelity supports forex (16 pairs). Additionally, Schwab volunteers more international trading opportunities. 

If the assets argument doesn’t apply to you, however, know that we picked Fidelity as our finest overall broker for 2021, marking the third year it has won this category. Although they are small differences, Fidelity’s elimination of most account wages, rejection of payment for order flow, and the automated cash sweep into a money market fund just boasted a deeper commitment to lowering costs for investors while also improving returns.  

Methodology

Investopedia is dedicated to providing investors with unbiased, complete reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, filing the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile skill and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring arrangement.

In addition, every broker we surveyed was required to fill out an extensive survey about all aspects of its platform that we hardened in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of its platforms at our offices.

Our team of hustle experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing tenets for users at all levels. Click here to read our full methodology.

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