Investing has become increasingly accessible, thanks to the products and services provided by leading brokerage firms like Fidelity and Charles Schwab. Both companies offer a range of services and features that cater to different types of investors. It’s great to have options, but for new investors, it can be challenging to understand which brokerage firm is a more suitable match when considering Fidelity vs. Schwab.
The following is an in-depth comparison of Schwab vs. Fidelity, focusing on fee structures and other costs, account minimums, account types, customer support, the investing platform and customer experience, services and features, and tradable securities. Additionally, we’ll discuss which company might be the best fit for various investor profiles.
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Fee Structure and Costs
Fidelity
Fidelity is known for its competitive fee structure. It offers $0 commission on online stock, ETF, and options trades. For options trades, a $0.65 fee per contract applies. Fidelity has no account fees or minimums for retail brokerage accounts, which makes it accessible for beginners. Mutual fund investors will find Fidelity’s proprietary funds attractive and there are more than 3,300 no-transaction-fee mutual funds to choose from. Fidelity charges $32.95 for broker-assisted transactions and doesn’t charge for wire transfers. Interest rates on margin loans currently range from 9.25% to 13.575%, but change periodically. Fidelity also offers several index funds that don’t charge an expense ratio which is a unique service.
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Schwab
Charles Schwab also offers $0 commission on online stock, ETF, and options trades, with a similar $0.65 per contract fee for options trades. The firm does charge $50 for a full transfer out of assets which Fidelity does not charge. Schwab has over 8,000 no-transaction-fee mutual funds to choose from. Schwab charges $25 for broker-assisted transactions and $25 for outgoing wire transfers. It’s $15 if completed online. But Schwab does not charge account fees or have minimum balances for standard accounts. Interest rates on margin loans currently range from 11.825% to 13.575%, but change periodically.
Comparison of Fidelity vs. Schwab
Both Fidelity and Schwab have similar structures when it comes to commission-free trading and low-cost options trading. Although there isn’t a significant difference in fees, Schwab may be a better option for investors looking for a wider variety of no-load and no-fee mutual funds.
Account Minimums
Fidelity
Fidelity does not require a minimum deposit for opening most of its accounts, making it highly accessible for new investors. This applies to individual brokerage accounts, retirement accounts, and even college savings plans.
Schwab
Charles Schwab also offers no account minimums for its standard brokerage accounts. For other accounts, such as Schwab Intelligent Portfolios, a $5,000 minimum is required, and for Schwab’s Managed Portfolios, the minimum can be higher.
Comparison of Schwab vs. Fidelity
Both firms offer no minimums for standard accounts, which is favorable for new investors. However, specific managed accounts at Schwab may require higher minimums compared to Fidelity’s offerings.
Account Types
Fidelity
Fidelity provides a comprehensive range of account types, including individual and joint brokerage accounts, traditional and Roth IRAs, rollover IRAs, SEP and SIMPLE IRAs, custodial accounts, 529 college savings plans, and trust accounts.
Schwab
Schwab also offers a broad spectrum of account types similar to Fidelity’s, such as individual and joint brokerage accounts, various IRAs, custodial accounts, 529 plans, trust accounts, and other specialized retirement accounts.
Comparison of Fidelity vs. Schwab
Both Fidelity and Schwab offer a wide variety of account types to meet different investor needs. Schwab offers futures trading but Fidelity doesn’t. Fidelity allows investors to directly buy and sell cryptocurrency while Schwab provides exposure by offering a range of cryptocurrency ETFs and mutual funds that trade cryptocurrency rather than hold it directly.
Another difference between the two firms and their account offerings is that although they both offer fractional shares, Schwab limits it to shares of companies listed on the S&P 500 Index and Fidelity allows fractional investing for over 7,000 stock and ETFs.
Customer Support
Fidelity
Fidelity is renowned for its excellent customer service. It offers 24/7 phone support, live chat, and a network of physical branches where investors can receive in-person assistance. Fidelity also provides extensive online resources, including webinars and educational materials.
Schwab
Charles Schwab provides strong customer support, with 24/7 phone support, live chat, and a large network of branches. Schwab is well-regarded for its customer service and offers a comprehensive suite of educational resources, including workshops and online courses.
Comparison of Schwab vs. Fidelity
Both companies excel in customer support with 24/7 availability and extensive physical branch networks. Although both firms have received mixed reviews on platforms like TrustPilot, the choice comes down to personal preference and the quality of individual experiences with customer service representatives.
Platform and Experience
Fidelity
Fidelity’s trading platforms, including Fidelity.com and Active Trader Pro, are highly regarded for their user-friendliness and solid features. Fidelity.com is intuitive and suitable for most investors, while Active Trader Pro is designed for advanced traders with comprehensive charting and analysis tools and who trade at least 36 times or more in a rolling 12-month period.
Schwab
Schwab offers the StreetSmart Edge platform, known for its customization and advanced trading tools. However StreetSmart Edge is being phased out and replaced with the Thinkorswim platform. Schwab also provides a powerful mobile app for trading on the go.
Comparison of Fidelity vs. Schwab
Fidelity’s Active Trader Pro is comparable to Schwab’s StreetSmart Edge in terms of advanced features. However, the Thinkorswim is considered the top platform for investors who are active traders.
Services and Features
Fidelity
Fidelity offers a wide range of services and features, including financial planning, wealth management, robo-advisory services (Fidelity Go), and access to professional investment advisors. It also excels in retirement planning services and provides comprehensive tools for retirement readiness.
Schwab
Similarly, Schwab’s services include financial planning, robo-advisory services (Schwab Intelligent Portfolios), and access to personal financial consultants. Schwab offers a notable feature called Schwab Intelligent Income, designed to help retirees manage their cash flow. They also provide extensive resources for retirement and estate planning.
Comparison of Schwab vs. Fidelity
Both Fidelity and Schwab offer excellent services and features, including financial planning and robo-advisory services. Schwab’s Intelligent Income, which helps seniors plan their retirement income needs with tax-smart withdrawals, is a unique tool that may appeal to retirees specifically, while Fidelity’s comprehensive retirement tools are highly rated.
Tradable Securities
Fidelity
Fidelity offers a wide range of tradable securities, including stocks, ETFs, options, mutual funds, bonds, CDs, and international securities. Fidelity’s mutual fund selection is particularly extensive, with thousands of funds available, including Fidelity’s no-fee mutual funds.
Schwab
Schwab provides access to a broad array of tradable securities, including stocks, ETFs, options, mutual funds, bonds, futures, and forex. Schwab’s mutual fund lineup includes thousands of funds from various providers, and they offer low-cost Schwab funds.
Comparison of Fidelity vs. Schwab
Both firms offer extensive choices in tradable securities, catering to diverse investor needs. Schwab’s inclusion of futures trading and commodities other than precious metals (Fidelity offers precious metals) may appeal to advanced traders, while Fidelity’s mutual fund selection, including no-fee funds, and popular cryptocurrencies may be more attractive for mutual fund investors.
Fidelity vs. Schwab: Which Company Should You Choose?
Choosing between Fidelity and Schwab depends on your specific needs and preferences as an investor. Both firms offer a robust set of services, excellent customer support, and competitive pricing. Here’s a breakdown to help you decide:
- For Beginners: Both Fidelity and Schwab are excellent choices due to their $0 commissions, no account minimums, and extensive educational resources. Fidelity’s no-fee mutual funds might give it a slight edge for those interested in mutual funds.
- For Advanced Traders: Schwab’s StreetSmart Edge and Thinkorswim platform and access to futures trading may appeal more to advanced traders. Fidelity’s Active Trader Pro is also highly rated, but Schwab’s platform may be preferred by advanced traders.
- For Retirement Planning: Fidelity excels with its comprehensive retirement planning tools and no-fee mutual funds, making it an excellent choice for those focused on retirement savings. Schwab’s Intelligent Income feature is beneficial for retirees needing cash flow management.
- For Wealth Management: Both firms offer excellent wealth management services. Fidelity’s extensive advisory services and Schwab’s personalized financial consultants are both strong points.
- For Mutual Fund Investors: Fidelity’s no-fee mutual funds offer a unique advantage, while Schwab also provides a wide selection of low-cost funds.
Both Fidelity and Schwab are top-tier brokerage firms that cater to a wide range of investor needs. The choice ultimately depends on specific preferences and requirements, but both provide excellent platforms, services, and support to help investors achieve their financial goals.
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Nadia Tahir is a freelance writer and content creator. She mostly writes in the areas of lifestyle and personal finance. She also enjoys writing on her blog about motherhood at This Mom is On Fire.