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Almost neck and neck, Fidelity has a slight edge
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Charles Schwab and Fidelity are well-respected powerhouses in the brokerage industry. Both offer customizable trading platforms, mobile apps, and low costs to millions of clients. As of the end of April 2024, Schwab has over 35 million active brokerage accounts and $8.85 trillion in customer assets. Fidelity is larger still, with over 50 million individual investors and $13.7 trillion in total customer assets as of March 2024. With the size of these brokers, most changes to the platforms are incremental and gradual, but Schwab has had an uncharacteristically busy year with upgrades related to fully integrating TD Ameritrade. Though these two brokers have much in common, we'll look at some of their differences to help you determine which one is the right fit for your investment and trading needs.
Investing in cryptocurrencies, decentralized finance (DeFi), and other initial coin offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by Googlawi or the writer to invest in cryptocurrencies nor can the accuracy or timeliness of the information be guaranteed.
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trades
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0.65 per contract for options
On January 11, 2024, Fidelity expanded its digital assets offering by adding the Fidelity Wise Origin Bitcoin Fund (FBTC), a spot bitcoin exchange-traded product (ETP).
On April 11, 2024, Charles Schwab announced that futures, forex, and portfolio margin were available to clients through thinkorswim. Prospective clients can try out the enhancements with a 30-day guest pass to paperMoney, a simulated trading environment.
Usability
Charles Schwab makes it easy to open and fund an account, and you can do so online via mobile app, by phone, or at one of over 300 branches. Fidelity also has a straightforward account opening process, but the paperwork to add account features like options trading or margin can be time-consuming.
Both brokers offer reasonably easy-to-navigate websites with screening tools, portfolio analysis, news, educational content, and basic order tickets, as well as customizable desktop platforms.
Schwab and Fidelity offer similar experiences regarding trading experience, costs, research tools, customer service, and security standards. Most investors would do fine with either broker in this context. The choice may come down to your preferred trading instruments: only Schwab offers futures trading, while both have forex and different flavors of cryptocurrency exposure.
Usability Verdict: Tie
Both of these brokers have multiple platforms with an enormous amount of information, but they do their best to streamline customer experiences based on the type of investing you are looking to do. We found both brokers to be user friendly, particularly given the size of the assets and markets they cover.
Trade Experience
Desktop Trade Experience
Schwab and Fidelity offer straightforward web-based trading platforms. Though Fidelity's web platform is easier to use, the quotes may be delayed by 15 minutes unless you sign up for real-time quotes.
Each broker also offers a desktop trading platform: thinkorswim from Schwab and Active Trader Pro from Fidelity. These platforms offer more functionality than their web-based counterparts, with more customization options, more order types, and better charting. With Schwab, it is worth noting that you have thinkorswim web as well as Schwab.com as the web-based trading platforms, but thinkorswim web is less customizable than thinkorswim desktop. Thinkorswim and Fidelity Active Trader Pro have a wide range of technical studies available and cover broadly similar assets (with the exception of futures trading only with Schwab).
Desktop Trade Experience Verdict: Charles Schwab
Overall, traders will find similar tools on either platform, but Schwab has taken the edge in this category by integrating thinkorswim and making it the key trading platform.
Mobile Trade Experience
Data streams in real time on both brokers' mobile apps, and you can stream quotes on multiple devices simultaneously. Both brokers offer news and research on the app, but Schwab has a big edge overall because it has the thinkorswim mobile app in addition to its regular Schwab mobile app. The thinkorswim mobile app is basically a mirror of the desktop platform in terms of charting and functionality. To trade mutual funds and fixed income, however, you will need to be in the Schwab app while futures and forex are only available through thinkorswim. Fidelity is simpler in this respect as all the assets are available in the same app, but the range of orders and charting tools are more limited than what you can get in Active Trader Pro and more similar to the Fidelity web platform.
Mobile Trade Experience Verdict: Charles Schwab
Overall, we found that either app should fit the needs of casual investors. When it comes to traders, however, the thinkorswim mobile app is superior to using Fidelity's app to manage your positions.
Range of Offerings
Schwab and Fidelity offer all the usual trading products, including stocks, ETFs, bonds, and mutual funds. However, only Schwab provides access to futures and Fidelity to direct crypto (limited to two coins). You can now trade forex at both Fidelity and Schwab, which represents Schwab closing a gap. Ultimately, a preference for one broker over the other may come down to each broker's range of offerings.
Compare Range of Offerings
Order Types
Both Schwab and Fidelity support the usual order types on their web and desktop platforms. Order types include market, limit, stop limit, and conditional orders like one-cancels-the-other (OCO) and one-triggers-the-other (OTO). Schwab and Fidelity proper are similar in these offerings and one doesn't edge out the other in this respect. On the mobile front, thinkorswim has a wider range of order types available than the Fidelity Investments app.
Order Types Verdict: Charles Schwab
Schwab has a small edge here thanks to its integration of the more robust thinkorswim platform and its mobile app.
Trading Technology
Schwab uses a proprietary wheel-based router for order management purposes. Most stock orders and multiple exchange-listed options get routed to third-party wholesalers, which balances execution quality with the company's cost savings. The company reports average savings of $0.91 per equity order up to 99 shares, savings of $7.54 on orders of 100 to 499 shares, savings of $22.84 on orders from 500 to 1,999 shares, and savings of $34.99 on orders of 2,000 to 4,999 shares. Its average execution speed is 0.03 seconds for all types of orders. Schwab also reports that 97.5% of orders are filled at prices better than the National Best Bid and Offer (NBBO). The broker does accept a payment for order flow of around $0.00066 per share. While this is very low, it is still there.
Meanwhile, Fidelity's smart order routing technology seeks the best price available and can access all types of market venues, including dark pools, exchanges, and market makers. The company reports a net price improvement of $12.97 on average for a 1,000-share equity order. Fidelity has an average execution speed of 0.05 seconds, and it does not accept payment for order flow for stocks or ETFs. Overall, 98.93% of orders fall within the NBBO, and 95.47% experience price improvement above the NBBO.
Trading Technology Verdict: Fidelity
Both Fidelity and Schwab are among the top brokers in terms of trading technology, as can clearly be seen by their execution quality. Overall, however, Fidelity wins in the trading technology department simply due to the lack of payment for order flow on equity trades.
Costs
You'll find similar costs at Schwab and Fidelity. Both have $0 commissions for online equity, ETF, and options trades (both have a per-contract fee of $0.65). You'll pay $49.95 to $75 at Fidelity to buy mutual funds outside the no-fee list and $49.95 up to $74.95 at Schwab. Broker-assisted transactions are $25 at Schwab and $32.95 at Fidelity.
Schwab charges margin rates between 13.575% and 11.825%, and Fidelity's base margin rate is 12.325% with the effective rate ranging from 13.575% to 9.25% (as of May 2024). Some of the other typical account costs are cheaper at Fidelity. For example, Fidelity doesn't charge for domestic wire—but Schwab charges $25 per transfer ($15 if submitted online).
Costs Verdict: Fidelity
Overall, these cost differences give Fidelity the slight edge here, but the brokers are essentially the same for actual trading costs.
Account and Research Amenities
Schwab and Fidelity offer comparable account and research amenities, including everything you would expect from a large broker. At either broker, you'll find portfolio margining, stock loan programs, dividend reinvestment programs, and a suite of screeners—with the option to screen using ESG/SRI factors. Both brokers also offer numerous financial calculators and tools, trading idea generators, and streaming news from various sources.
Account and Research Amenities Verdict: Tie
Overall, both brokers have similar offerings, but Schwab has a slight lead due to its large selection of in-house and third-party market reports. Balancing that out, we found Fidelity still has better trading idea generators, making this category a tie.
Portfolio Analysis
Charles Schwab's and Fidelity's portfolio analysis offerings are similar. You can access real-time buying power and margin information with either broker, plus real-time unrealized and realized gains. You can link holdings from outside your account to get a complete picture of your finances. Both offer tax reports, but only Schwab lets you calculate the tax impact of future trades. Fidelity, for its part, has the Financial Planning Tool as well as Full View to give you comprehensive looks at all your finances in addition to your portfolio. Schwab's offering, while functional, is more of a net worth summary but you can unleash the Portfolio Checkup tool to analyze the linked investment accounts as well.
Portfolio Analysis Verdict: Fidelity
Both Fidelity and Charles Schwab have excellent portfolio analysis tools that help monitor your investments. We give the edge here to Fidelity for its more wholistic financial planning tools in addition to the portfolio analysis.
Education
Schwab and Fidelity offer a respectable range of educational content, including articles, videos, webinars, and live events. Schwab also hosts several educational podcasts, while Fidelity provides live coaching sessions with its Trading Strategy Desk, where you can discuss questions with a professional trading coach.
Education Verdict: Charles Schwab
Overall, we found that Schwab has better educational offerings if you want to learn about life stages (e.g., living in retirement). At the same time, Fidelity offers more investor- and trading-specific content.
Customer Service
Schwab and Fidelity offer flexible customer service, with 24/7 phone line support and access to live brokers and brick-and-mortar branch offices for in-person support.
Customer Service Verdict: Tie
You can count on reliable customer service from either broker 24/7.
Security
Schwab and Fidelity's security are up to industry standards. You can log into the apps using biometric (face or fingerprint) recognition, and both brokers protect against account losses due to unauthorized or fraudulent activity.
Schwab carries excess Securities Investor Protection Corporation (SIPC) insurance provided by Lloyd's of London and London insurers. The combination of SIPC protection and Schwab's policies total an aggregate limit of $600 million, limited to a combined return to any customer of $150 million, including cash of up to $1.15 million. Fidelity's excess SIPC insurance has a per-customer limit of $1.9 million on uninvested cash with a total aggregate limit of $1 billion.
Security Verdict: Tie
Overall, investors can be confident in the security standards of either broker.
Bottom Line
Schwab and Fidelity are both robust brokerages with strong trading platforms that can serve the needs of every level of investor. Because Schwab and Fidelity offer a similar experience, choosing one over the other isn't easy. Most investors would do fine with either broker when it comes to the trading experience, costs, research tools, customer service, and security standards. The choice may come down to the asset classes each broker supports: Only Schwab offers futures trading, and only Fidelity supports direct crypto trading but only in two coins.
If the assets argument doesn't apply to you, however, know that we picked Fidelity as our best overall broker for 2024, marking the sixth year it has won this category. Although they are small differences, Fidelity's elimination of most account fees, rejection of payment for order flow on stock and ETF trades, and the automated cash sweep into a money market fund just showed a deeper commitment to lowering costs for investors while also improving returns. Schwab has closed the trading experience gap rapidly this year, but Fidelity still has an edge when it comes to delivering value to the customer.
Frequently Asked Questions
What Are Charles Schwab and Fidelity?
Charles Schwab and Fidelity are long-standing major institutions in the brokerage industry. Both offer trading options, mobile capabilities, and other benefits and services to their millions of clients at inexpensive rates.
How Do Charles Schwab and Fidelity Work?
You can open and fund an account with Charles Schwab online via mobile app, by phone, or at one of its 300+ branches. Fidelity works similarly, but requires paperwork to add certain account features (such as options trading). Both brokers offer screening tools, portfolio analysis, and among other features.
Who Should Use Charles Schwab vs. Fidelity?
Schwab and Fidelity offer similar customer experiences. As a result, most types of investors can find benefits to working with either. The choice between the two may prove a matter of preferred trading instruments: Schwab is better equipped for futures, and only Fidelity offers direct crypto trading.
How We Picked the Best Online Brokers and Trading Platforms
Providing readers with unbiased, comprehensive reviews of online brokers and trading platforms is a top priority for Googlawi. We combined our industry research, subject matter expertise, and investor survey data to guide the research and weightings for our 2024 online broker awards. To collect the data, we sent a digital survey with 110 questions to each of the 26 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Feb. 19 to March 19, 2024.
We then developed a proprietary model that scored each company to rate its performance across 11 major categories and 89 criteria to find the best online brokers and trading platforms. The score for each company’s overall star rating is a weighted average of the criteria in the following categories:
Additionally, during our 2024 research, many of the companies we reviewed gave us live demonstrations of their platforms and services via video conferencing methods and also granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.
Through this all-encompassing data collection and review process, Googlawi has provided you with an unbiased and thorough review of the top online brokers and trading platforms.
Learn more about how we review online brokers.