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Account minimums and investment minimums

Account minimums and investment minimums

Schwab Index Funds, Mutual Funds, Target Date Funds, Monthly Income Funds, and MarketTrack Portfolios have a minimum investment of $100 if you set up an automatic monthly investment. Otherwise, you’ll need $1,000 for a brokerage account. SEP IRAs, SIMPLE IRAs, and individual 401(k)s do not have a minimum deposit requirement. If you want the highest level of service associated with personalized investment advice, account minimums range from $25,000 to $500,000.

Rates

There are no fees to open or maintain a Schwab IRA. Online stock trades are $8.95 each. Bond traders are commission-free for new issues of US Treasury securities. CDs, corporate bonds, municipal bonds, and government agency securities cost $1 per trade. Schwab OneSource ETFs are commission-free; other ETFs cost $8.95 per trade online. Broker-assisted telephone exchanges have a $25 service charge in addition to the usual fees.

You can buy and sell Schwab OneSource mutual funds without paying any commission. Schwab charges a $49.95 short-term redemption fee on OneSource funds held for 90 days or less. Transaction fee funds for funds outside of the Schwab system cost $76 to buy and nothing to sell. Schwab Smart Wallets have no advisory fees, commissions, or account services.

expense ratios

Expense ratios for mutual funds and ETFs vary by fund. Schwab’s index funds have expense ratios ranging from 0.09% to 0.29%, and each fund’s expense ratio is below the industry average for that fund category. Schwab’s OneSource mutual funds, which have no loads or transaction fees, have expense ratios ranging from 0.09% for the Schwab S&P 500 Index Fund to 1.06% for the Strategic Value Dividend A Fund. Federated, which invests in stocks with a high dividend or dividend growth potential. Schwab’s Select List mutual funds, which are no-load, no-transaction-fee funds designed to generate income, have expense ratios ranging from 0.69% to 1.32%. MarketTrack portfolios have expense ratios of 0.

Schwab Target Funds have an expense ratio of 0.48% to 0.82%, with the expense ratio increasing further into your retirement date. Each of these funds is slightly less expensive than the category average. Personalized portfolio management and advisory services have different levels of expense. Clients with at least $100,000 in Schwab who use the Charles Schwab Investment Management Service, for example, pay a fee of 1.35% of assets under management; the fee decreases with higher asset levels.

Reputation

JD Power’s 2015 Self-Directed Investor Satisfaction Study, which surveyed more than 3,700 investors who make investment decisions without the help of a personal financial advisor, gave Charles Schwab high ranks across the board. The agency received five out of five for overall satisfaction, customer interaction with the company, helpfulness, ease of access to account information, marketing charges, and fees, and information resources (research, analysis, and tools). ). It got a four out of five for its product offerings. Charles Schwab was first in this survey, just ahead of Vanguard and Fidelity Investments.

Security

Your brokerage account securities (stocks, bonds, Treasury securities, CDs, mutual funds, money market mutual funds, and other investments) with Schwab are covered by the Securities Investor Protection Corporation (SIPC), a nonprofit organization that will cover the loss of up to $500,000 in securities, including up to $250,000 in cash if the firm goes bankrupt and its assets disappear. Schwab also has additional coverage of $600 million, with a per-client limit of $150 million for securities and $1.15 million for cash. Any uninvested cash in your brokerage account at the end of the day is automatically deposited into Charles Schwab Bank, where it will earn interest and be FDIC insured.

Also, because the mutual fund shares you own are owned by a third-party custodian, neither Schwab nor its creditors can take possession of them if the brokerage runs into financial trouble. Schwab is a member of the Financial Industry Regulatory Authority (FINRA). (For more information, see FINRA: How It Protects Investors.)

If your account loses money because the market declines or you make poor investment decisions, you’re out of luck. There is no insurance for that. , no matter what intermediary has your money. (For more information, see Are my investments insured against loss?)

conclusion

Charles Schwab has a strong reputation for retirement services, and investors just starting out will especially appreciate the ability to start saving for retirement with as little as $100 per month. With services for everyone from beginners to those with half a million or more in assets, most people planning to retire will find what they need at this brokerage. (For more information, check out Online Portfolio Management, DIY, or Fee-Based Financial Advisor: Which Is Right for You?)

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