Charles Schwab IRA Review 2024: Features, Fees, and More

The Bottom Line

With $0 account minimums and management fees, along with a wide range of account types and investment options, Charles Schwab is a low-cost trading platform suited to many different types of investors. Whether you’re just getting started or trying to boost your retirement game later in life, Schwab can help — though it doesn’t offer crypto trades, carries a low interest rate on uninvested cash deposits, and its customer support rankings are low relative to some of its competitors.

Best If You Want

With low fees and built-in planning tools and research, Charles Schwab Corporation is a great choice for those just getting their feet wet with investing—and veterans, too. The brokerage offers a wide range of account types, including a traditional IRA, Roth IRA, SEP IRA, and regular brokerage accounts.

Additionally, the Charles Schwab website is easy to navigate and user-friendly—as is the Schwab Mobile app, which enjoys a rating of 4.8 stars on the Apple App Store. The Google Play version has a slightly lower ranking, as does its Streetsmart Mobile app on both platforms.

Though Charles Schwab offers crypto exposure, it doesn’t allow you to directly invest in and trade crypto. The interest rate it pays on uninvested funds falls short of what competitors offer, as well.

Charles Schwab Fees

Charles Schwab shines when it comes to its fee schedule. There’s $0 minimum balance to open and maintain a Schwab brokerage account, including a Schwab IRA or Schwab Roth IRA. The company also offers a wide range of assets with free online trades, including all listed stocks and exchange-traded funds (ETFs), as well as thousands of mutual funds through Schwab Mutual Fund OneSource.

Schwab customers can expect to pay fees for the following transactions, though:

• Trading U.S. over-the-counter (OTC) equities: $6.95
• Options contracts: $0.65 per contract
• Broker-assisted trades: $25 service fee

Still, that means a lot of free trading options available for a free account, making Schwab a great choice for beginning investors or those who don’t have much money to spare, as well as active traders.

What You Can Invest In

Charles Schwab brokerage investors and IRA account holders can invest in a diverse range of assets, including:

• Stocks
• International stocks
• Fractional shares
• Bonds and fixed-income products
• ETFs
• Mutual funds
• Money market funds
• Options
• Futures
• Margin investments

Schwab Bank also offers deposit accounts, including a checking account, home loans, insurance products and other financial services, making it a one-stop shop for those with multiple financial goals.

Charles Schwab Account Minimums

Charles Schwab stands out from the crowd by offering a $0 minimum opening deposit for investment accounts, no maintenance fee, and $0 account minimum. It also offer $0 online stock and ETF trades. Because it has low fees and no account minimums, Schwab a formidable presence among brokerage firms for those looking to spend as little as possible on their retirement savings accounts.

There are, however, fees for broker-assisted trading, as well as options trading. Additionally, Charles Schwab offers investment management services, ranging from robo-advisor services for help with fund selection to personalized advice through human financial planners.

Schwab Intelligent Portfolios, a robo-advised wealth management option, doesn’t charge an advisory fee or commissions, but it does require a minimum investment of $5,000.

Schwab Intelligent Portfolios Premium, which includes an initial advisory consultation, carries a one-time $300 advisement fee, as well as a $30 monthly advisory fee and a $25,000 account minimum.

Higher tiers of personal advisement with interactive brokers and investment account managers come with fees assessed as a percentage of assets under management. Some carry minimum investments as high as $500,000, according to the company website.

Charles Schwab Customer Support

Schwab does make human support available to its customers in variety of ways, including a customer service phone number (800-435-4000), investment planning phone number (877-336-5388), and physical branches where account-holders can seek out personal support. However, your ability to work one-on-one with a financial advisor may be mediated by how much money you’re managing with Schwab, as well as what tier of asset management you choose.

In other words, for regular, free account holders, Schwab’s customer service may involve navigating a phone tree before speaking to a real human being. Additionally, Charles Schwab suffers poor customer service reviews on both TrustPilot (where it has 1.5 out of 5 stars) and the Better Business Bureau (where, despite its A+ BBB rating, it scores only 1.56 stars out of 5).

Charles Schwab IRA Account Types

Charles Schwab offers a range of individual retirement account types to choose from—alongside other types of investment accounts like brokerage and trading accounts, education and custodial accounts, and charitable giving accounts. For the purposes of this article, we’ll stick with the various iterations of the Schwab IRA that investors might choose from.

Schwab Traditional IRA

Traditional individual retirement accounts (IRAs) are funded with pre-tax dollars, which offer the account holder a tax break in the year contributions are made. The funds are then allowed to grow tax-free, though they are taxed as regular income in retirement. They also carry no income limitations for direct contributions.

Schwab Roth IRA

Like all Roth IRAs, Schwab’s Roth IRAs are funded with after-tax dollars—so although you won’t get a tax break in the short term, the long-term tax benefits are many. For one thing, Roth accounts mean account holders can take out tax-free funds once they reach retirement age (so long as the Roth five-year rule has been followed). Furthermore, Roth IRAs don’t carry required minimum distributions (RMDs) as do most other types of retirement plans, making them an attractive option for those looking to pass down a tax-free asset to their heirs.

Schwab Rollover IRA

If you’ve got an old retirement account hiding somewhere, rolling it over can help ensure you know where all of your retirement money is — and that you’re actively managing it so it can go to work for you. Once you’ve found your old 401(k), the process to roll over that 401(k) to an IRA can be daunting. Schwab’s rollover IRA simplifies the process and its specialists can walk you through step by step.

Schwab Inherited IRA

For those who inherit an IRA from a deceased loved one, Schwab offers an inherited IRA option that preserves the tax benefits of this account type.

Schwab Custodial IRA

Saving for a child who earns income? Parents can choose a Schwab custodial IRA to help them get a leg up on their retirement savings — or to put money toward qualified educational expenses or the purchase of their first home.

Schwab SEP IRA

SEP IRAs are designed for small business owners to maximize their employees’ retirement savings while also gleaning tax benefits for the business, as well as self-employed people saving for retirement. Schwab offers a Simplified Employee Pension IRA to eligible account holders.

Schwab Personal Choice Retirement Account

If you have access to an employer-sponsored retirement plan, you may be able to open a Schwab Personal Choice Retirement Account, which is a self-directed brokerage account that is hosted within an employer-sponsored plan. Schwab IRA investment options include most domestic stocks, as well as those on foreign exchanges, fractional shares, fee-free ETFs and mutual funds, and more. However, your employer will determine what types of investments are permitted.

Other Features

Because it’s one of the biggest names in the business, Schwab investors can benefit from tech giant’s host of other features, including checking and savings accounts, insurance products, trust and estate services, and even Charles Schwab credit cards. Though you may pay an annual fee of up to $695, you can get a host of travel benefits, including no foreign transaction fee. Schwab also has a credit card with no annual fee.

Considering a Charles Schwab IRA?

For those interested in getting their investment journey started without playing a single transaction fee or being beholden to a minimum deposit, Charles Schwab stands out among trading platforms. Although many brokerages offer free ETFs, not every trading platform can boast accounts with no fees or account minimums, along with $0 commission fees and no-fee mutual funds.

If you’re looking to fund your new Charles Schwab IRA with a 401(k) rollover, Capitalize can help. We’ve made it our mission to make this process easier for everyone. We can handle the entire process for you. Most of the process can be done online and our rollover experts will guide you through any of the manual parts. Get started with your 401(k) to IRA rollover in just a few minutes.