Charles Schwab and Fidelity are two of the most popular online brokers, and for good reason. Both brokers offer services customers want at attractive costs, which helps them score well in Bankrate’s annual broker ratings.
Schwab was named Bankrate’s Best Broker Overall as part of the 2023 Bankrate Awards, while Fidelity was named the Best Broker for Beginners. Low costs, great customer service, and strong research and education offerings make these brokers suitable for virtually any investor.
But deciding which one is right for you depends on your individual circumstances and what you need from an online broker. Here’s how Schwab and Fidelity compare on some of the most common features.
| Broker category | Charles Schwab | Fidelity |
|---|---|---|
| Stock and ETF commissions | $0 | $0 |
| Option committees | $0.65 per contract | $0.65 per contract |
| Minimum account | $0 | $0 |
| Marketable securities | Stocks, ETFs, bonds, investment funds, options, futures | Stocks, ETFs, bonds, mutual funds, options, crypto |
| Account fees | $50 transfer fee | No annual, activity or transfer fees |
| Investment funds without transaction costs | ~4,300 | ~3,400 |
| Account types | Individually and jointly taxable, IRAs, small businesses (SEP IRA, solo 401(k), etc.), managed portfolio, custodial, charity, and trust, among others | Individually and jointly taxable, IRAs, small businesses (SEP IRA, solo 401(k), etc.), custodial, 529, HSA, managed portfolio, charities and trusts, among others |
| Mobile app | Schwab mobile app on the Apple App Store and Google Play Store | Fidelity mobile app on the Apple App Store and Google Play Store |
| Fractional shares | Stock slices – for purchases and dividend reinvestment | For purchases and reinvestment of dividends |
| Customer support | 24/7 telephone, chat and email, more than 300 locations | Telephone 24/7 accessibility, chat, e-mail, 200+ locations |
Schwab vs. Fidelity: Cost
Schwab and Fidelity are both doing a great job of keeping costs low for customers. You won’t pay any commissions on stock or ETF trades, which has become common in the industry after Schwab cut its commissions to zero in 2019.
In the mutual fund space, both brokers offer more than 3,000 funds with no transaction fees, which should provide plenty of choice for fund investors looking to save for retirement or other investment goals. Schwab’s offering of no-transaction-fee funds is larger than Fidelity’s, but you shouldn’t have trouble finding a fund that meets your needs with either broker.
Fidelity doesn’t charge account fees, so you don’t have to worry about getting paid. Schwab does charge a $50 transfer fee, which is less than the industry standard of $75 but still above Fidelity’s zero-fee policy.
Schwab vs. Fidelity: Account Minimum
Both Schwab and Fidelity have no account minimums, allowing new investors to open an account and fund it as soon as they are ready to start investing. You can access each broker’s educational resources before funding an account, making both places ideal for new investors.
Schwab vs. Fidelity: Marketable Securities
Schwab and Fidelity both offer the standard securities that should meet most investors’ needs: stocks, ETFs, mutual funds, bonds and options. Schwab also offers futures trading, which Fidelity does not, but that shouldn’t be a problem for most investors. Those interested in trading cryptocurrencies can find what they are looking for at Fidelity, but you are limited to the most popular cryptocurrencies. If you want to trade forex, you will need to use another broker.
Schwab vs. Fidelity: Account Types
Most investors will find the type of account they are looking for at Schwab or Fidelity. Both brokers offer the standard choices, such as individual and joint taxable accounts, IRAs (Roth, traditional and rollovers), small business retirement accounts (SEP IRA, SIMPLE IRA and solo 401(k)) and 529 plans. You can also choose from Schwab Intelligent Portfolios or Fidelity Go if you’re looking for a robo-advisor option.
One area where Fidelity stands out is in offering health savings accounts (HSAs), which some people use to save for health care costs. The accounts can function almost like an additional retirement account because the money can be used for any purpose once you reach retirement age.
Schwab vs. Fidelity: Fractional Shares
Both Schwab and Fidelity offer fractional shares on purchases and reinvested dividends, but with Fidelity you have a much broader list of stocks to choose from than with Schwab. Schwab’s fractional share program is limited to the companies in the S&P 500, while Fidelity offers more than 7,000 stocks and ETFs in its Fidelity Stocks by the Slice program. Fidelity’s minimum transaction starts at just $1, compared to $5 for Schwab.
Fractional shares offer investors the chance to buy expensive shares and ensure the full amount is invested, rather than having to wait to pay for a full share. Popular stocks like Alphabet, Amazon and Tesla have sometimes risen into the thousands of dollars for a single share in recent years.
Schwab vs. Fidelity: Customer Support
Schwab and Fidelity are both leaders in customer service. You can have questions answered by telephone 24 hours a day, 7 days a week, which is becoming increasingly rare in financial services. You also have a number of other options, including online chat, email, and online FAQ sections. You can also visit a branch in person, with Fidelity offering more than 200 locations and Schwab having more than 300. Investors should have no trouble getting their questions answered with either broker.
In short
The reality is that Schwab or Fidelity is an excellent broker choice for investors. The differences between the two are very minor and may only matter to those looking for very specific offerings, such as futures trading or a particular mutual fund.
Before selecting a broker, think about the features that are most important to you. If you like certain things about each broker, you can always open an account with both and use the broker that has the best offering in each category.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making any investment decision. In addition, investors are advised that the past performance of investment products does not guarantee future price increases.
