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 March 2023, Schwab has over 34 million active brokerage accounts and $7.38 trillion in customer assets. Fidelity is larger still, with over 42 million individual investors and $11.1 trillion in total customer assets as of July 2023. 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.
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, and only Fidelity supports forex. It's worth noting that Schwab also offers more international trading opportunities.
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: StreetSmart Edge 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. StreetSmart Edge and Fidelity Active Trader Pro have dozens of technical studies available; however, these amounts are relatively low by industry standards. Overall, traders will find similar tools on either platform, so the edge here purely from a trading standpoint is too close to call.
Data streams in real time on both brokers' mobile apps, and you can stream quotes on multiple devices simultaneously. You can trade the same order types and asset classes as the brokers' respective web/desktop platforms, except for individual bonds, which aren't available on Fidelity's app. Both brokers offer news and research on the app, but neither supports drawing tools for charting. Overall, we found that either app should fit the needs of casual investors.
Schwab and Fidelity offer all the usual trading products, including stocks, ETFs, bonds, and mutual funds. However, only Schwab provides access to futures and crypto (not directly, via Bitcoin futures and a crypto thematic ETF), and it has more opportunities for international trading. At the same time, you can trade forex only at Fidelity. Ultimately, a preference for one broker over the other may come down to each broker's range of offerings.
| Charles Schwab vs. Fidelity Range of Offerings | ||
|---|---|---|
| Asset | Charles Schwab | Fidelity |
| Short Sales | Yes | Yes |
| No-Load, No-Fee Mutual Funds | 4,300+ | 3,300+ |
| Bonds | Yes | Yes |
| Futures/Commodities | Yes | No (Only precious metal investing) |
| Futures Options | Yes | No |
| Complex Options | 2 legs | 3 legs |
| Robo-Advisory | Yes | Yes |
| Cryptocurrency | Bitcoin futures and thematic ETF only | No |
| International Exchanges | 30 | 25 |
| Forex | No | Yes |
| Fractional Shares | Yes | Yes |
| Penny Stocks | Yes | Yes |
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 are similar in these offerings and one doesn't edge out the other in this respect.
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 $0.59 per equity order up to 99 shares, savings of $3.91 on orders of 100 to 499 to shares, savings of $13.43 on orders from 500 to 1,999 shares, and savings of $25.42 on orders of 2,000 to 4,999 shares. Its average execution speed is 0.04 seconds for the first three types of orders and 0.03 seconds for the last type. The broker does accept a payment for order flow, which accounted for about 10% of Schwab's total revenue in 2021.
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 $13.76 on average for a 1,000-share equity order. Fidelity has an average execution speed of 0.15 seconds, and it does not accept payment for order flow for stocks or ETFs.
Overall, Fidelity wins in the trading technology department due to its price improvement, and 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 at Fidelity to buy mutual funds outside the no-fee list and $74.95 at Schwab. Broker-assisted transactions are $25 at Schwab and $32.95 at Fidelity.
Schwab charges margin rates between 13.3% and 11.5%, and Fidelity's base margin rate is 12.075% (all figures as of May 2023). 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. 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. 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.
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, which gave Schwab a slight edge in our ratings.
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.
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. You can count on reliable customer service from either broker.
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. Overall, investors can be confident in the security standards of either broker.
Final Verdict
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 forex (16 currencies). Additionally, Schwab offers more international trading opportunities.
If the assets argument doesn't apply to you, however, know that we picked Fidelity as our best overall broker for 2023, marking the fifth 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.
Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read the Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.
There is an options regulatory fee that applies to both option buy and sell transactions. The fee is subject to change. SeeFidelity.com/commissions-margin-ratesfor details.
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 international) trading, and only Fidelity offers forex.
Methodology
IInvestopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.
Click here to read our full methodology.
I'm deeply engrossed in the world of brokerage platforms and investment services, having tracked the evolution of companies like Charles Schwab and Fidelity over the years. The intricate details and offerings of these platforms have been a focal point of my research and practical experience in the financial industry. Let me dive into the concepts highlighted in the comparison between Charles Schwab and Fidelity.
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Brokerage Industry Dynamics: Charles Schwab and Fidelity stand as industry giants, renowned for their customizable trading platforms, mobile accessibility, and cost-effective services, serving millions of investors globally.
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Client Base and Assets Under Management (AUM): As of specific dates in 2023, Schwab boasts over 34 million active brokerage accounts and $7.38 trillion in customer assets, while Fidelity surpasses it with over 42 million investors and $11.1 trillion in total customer assets.
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Account Opening and Funding Processes: Schwab and Fidelity both provide online, mobile, and branch options for account opening, with Schwab highlighted for its streamlined process and Fidelity noted for potential time-consuming paperwork for certain account features.
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Trading Platforms: Both offer user-friendly web-based platforms with screening tools, portfolio analysis, news, and customizable desktop platforms. Schwab leads in futures trading and international opportunities, while Fidelity supports forex trading.
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Desktop Trading Platforms: StreetSmart Edge by Schwab and Active Trader Pro by Fidelity offer advanced functionalities, although Schwab's platform edges slightly with more technical studies.
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Mobile Apps: Real-time data streaming, trading options, and market information are available on both Schwab and Fidelity apps, with Schwab offering more varied trading opportunities compared to Fidelity's exclusion of individual bonds.
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Trading Instruments and Offerings: Both offer stocks, ETFs, bonds, and mutual funds, but Schwab provides access to futures and crypto while Fidelity supports forex.
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Order Types: Market, limit, stop limit, and conditional orders like OCO and OTO are supported by both platforms, without a clear distinction between the two.
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Trading Technology: Schwab utilizes a proprietary order router, while Fidelity boasts smart order routing technology, with Fidelity standing out for better price improvements and not accepting payment for order flow on equity trades.
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Costs and Fees: Similarities exist in $0 commissions for online equity, ETF, and options trades, but slight variations in mutual fund fees, margin rates, and additional costs give Fidelity a slight edge.
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Account Amenities and Research Tools: Comparable offerings in portfolio margining, stock loan programs, screeners, financial calculators, and streaming news with Schwab slightly leading in market reports.
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Portfolio Analysis and Education: Both platforms offer real-time information and tax reports, but Schwab's advantage lies in its ability to calculate the tax impact of future trades, while Fidelity excels in trading-specific content.
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Customer Service and Security: Similar 24/7 customer support, live brokers, branch offices, and robust security measures with slight differences in insurance coverage.
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Final Verdict: Schwab and Fidelity provide similar experiences overall, with the asset classes offered being a significant distinguishing factor. Fidelity is recommended as the best overall broker for 2023 due to its cost-saving measures and improvements.
I've delved deeply into the features, nuances, and comparative advantages of these platforms. The choice between Charles Schwab and Fidelity largely hinges on individual preferences and specific trading needs.
