In this article, we are comparing Interactive Brokers and Charles Schwab.
At a Glance
While Interactive Brokers vs. Charles Schwab both offer excellent brokerage services, Interactive Brokers edges out because of its advanced trading platform providing access to national and foreign markets. You can keep trading simple while exposing yourself to countless account types and assets.
Interactive Brokers is best for advanced traders who wish to trade currency, forex, and stocks. They have reasonable fees, investment diversity, easy-to-use tools, mobile trading, and educational resources. However, their resources are not as strong as Charles Schwab.
Charles Schwab provides comprehensive trading if you wish to participate in the stock retail day trade. They also offer mutual funds, non-commission ETFs, bonds, and no-transaction-fee mutual funds. Charles Schwab has affordable fees, investment diversity, a navigable platform, plenty of educational resources, and simple tools.
Keep reading to learn more about Interactive Brokers and Charles Schwab.
Here we will compare the two online trading services.
Commission & Fees
Interactive Brokers bases their fees on the number of shares you buy. Charles Schwab has an accessible flat fee. While Interactive Brokers has more expensive options, it has extremely low margin rates. Also, Charles Schwab has pricey mutual funds.
Trading and Account Fees:
- Minimum Deposit: $0
- ETF and Stock Trades: $0.005/share
- Mutual Fund Trade Fee: maximum $14.95 per trade or 3% of purchase volume
- Options per Contract: $0.15 to $0.65
- Broker Assisted Trades Fee: $30
- Futures per Contract: $0.15 to $0.85, not including regulatory and clearing fees
- IRA Closure Fee: $0
- Partial Account Transfer: $0
- Full Account Transfer: $0
- Domestic and International Wire Fee: $10
- Forex: 0.08 to 0.2 times the trade value
- Bonds: 0.0125% to 0.1% of security face value
Interactive Brokers does not provide information concerning their Returned ACH and Wire Fees, their Stock Certificate Processing and Delivery Fees, and their Paper Statement and Confirmation Fees.
- $0 to $99,999.99: 1.55% (BM + 1.5%)
- $100,000 to $1,000,000: 1.05% (BM + 1%)
- Over $1,000,000: 0.75% (BM + 0.3%-0.5%)
BM is the base rate. These rates are for the IBKR Pro plan. The IBKR Lite plan has a flat fee of 2.55% (BM + 2.5%)
Trading and Account Fees:
- Minimum Deposit: $0
- ETF and Stock Trades: $0 commission
- Mutual Fund Trade Fee: up to $49.95
- Options per Contract: $0.65
- Broker Assisted Trade Fees: $25
- Futures per Contract: $1.50
- IRA Closure Fee: $50
- Partial Account Transfer: $25
- Full Account Transfer: $50
- Domestic and International Wire Fee: $25
- Bonds: $0 on most government bonds
- Returned ACH and Wire Fee: $25
- Stock Certificate Processing Fee: $100
- Paper Statement and Confirmation Fee: $0
Charles Schwab does not provide information about its Stock Certificate Delivery Fee. They also do not allow for Forex trading.
- $0 to $24,999.99: 8.325% (BM + 1.825%)
- $25,000 to $49,999.99: 7.825% (BM + 1.325%)
- $50,000 to $99,999.99: 6.875% (BM + 0.375%)
- $100,000 to $249,999.99: 6.825% (BM + 0.325%)
- $250,000 to $499,999.99: 6.575% (BM + 0.075%)
- You will need to contact them for rates above $500,000.
Charles Schwab has the same margin rates for all of its customers.
Interactive Brokers operates in far more financial markets, including forex. However, Charles Schwab compensates with over 200 no-fee ETFs.
- Mutual Funds
- Mutual Funds
Tools and Platforms
Interactive Brokers’ platforms work well for beginning and professional traders, while Charles Schwab makes their offerings more applicable to all traders. Both have readily navigable websites and apps to reach the most people.
The desktop platform Trader Workstation is highly comprehensive and complex, making it suitable for professional traders. It proves too complicated for most beginner traders, but it has excellent risk management features once you adjust to the system.
The web-based platform WebTrader has an elementary design for traders who have not found their niche. Intermediate and advanced traders may find the features too rudimentary for their needs.
The mobile app replicates the desktop platform on a smaller screen. You can trade anywhere and view your stock’s updates in real-time. It displays market data and lets you trade orders. You can also deposit a check and use well-developed security features.
The desktop platform, StreetSmart Edge, has a research database in addition to its trading software. It is not as comprehensive as other trading platforms, but it gets the job done. The web platform has many trading resources, such as screeners and charts. You can also access mutual funds, ETFs, and stocks.
The web platform lets you interact with an AI advisor if you have a balance over $5,000. For beginners or those with smaller balances, you will have limited features.
The mobile app offers complete trading abilities as it replicates the website. You can view your balance, trade assets, and search for new ones. They also have advanced data security and encryption to protect your data. The app lets you deposit checks as well.
Charles Schwab provides more comprehensive research and education resources, making it more suitable for beginners. Nonetheless, they both have extensive features if you use third-party integration and explore all of their offerings.
The research section provides base features for a trader who knows what they are doing. They include insights from Dow Jones and Thompson Reuters. You can extend these resources through third-party integration.
The educational tools include the Traders’ Academy, which is an online course about trading with 48 classes for various skill levels. They also have live and recorded webinars you can watch, and the Traders’ Insights blog for breaking news. You can sign up for a daily newsletter, read their retirement guide, and use their student trading lab.
Charles Schwab provides comments, economic data, ratings, screeners, and news releases on their research section. They provide data from Morningstar, Standard & Poor, Thomson Reuters, Briefing, Econoday, and Credit Suisse.
Some educational tools include the Knowledge Center with calculators and articles to plan your future and learn about investing. Their Insight and Ideas section has frequently updated market news and other articles about tons of topics, from buying a home to retirement. They write articles for beginners. Lastly, you can access podcasts about trading.
Charles Schwab vs. Interactive Brokers: The Winner
The overall best trading service is Interactive Brokers. They have affordable fees, tons of trading options, a navigable platform, a comprehensive app, and plenty of educational resources.
Interactive Brokers is best for an advanced trader looking to explore multiple investment types, such as forex. The platform lacks the hand-holding that Charles Schwab provides, so beginners may feel overwhelmed by the minimalist features.
Charles Schwab is ideal for beginning to intermediate users who want to stick to fewer investment varieties as they learn more about trading.
You can sign up for Interactive Brokers today to get started on trading.
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