Charles Schwab vs. Fidelity (2024)

Charles Schwab and Fidelity are two heavyweight contenders of the online brokerage business. Both companies offer extensive investing platforms that earn high marks from Forbes Advisor.

These investment giants are on fairly even footing in terms of size and reputation, but there are still material differences between their offerings. Let’s compare their offerings to give you a sense of whether you’d be better served by Fidelity or Charles Schwab.

Charles Schwab vs. Fidelity: Similarities

In many important areas, Charles Schwab and Fidelity offer very similar services.

Longevity

Charles Schwab was founded in 1971, giving the firm a tenure of more than 50 years in the brokerage business. Fidelity was founded 25 years earlier, in 1946.

As of April 30, 2023, Charles Schwab had $7.63 trillion in client assets, while Fidelity had $11.1 trillion in assets under administration as of March 31, 2023.

Their comparable asset bases and long track records underscore why these two firms are among the leading investment brokers in the U.S.

Branch Network

Both companies support large branch networks that offer in-person services. Fidelity operates more than 200 branches.

Charles Schwab’s branch network, on the other hand, is considerably larger. Schwab operates more than 400 Schwab and TD Ameritrade branches across 45 U.S. states.

Range of Products

Charles Schwab’s array of offerings include stocks, bonds, exchange-traded funds, mutual funds, option trading, futures, certificates of deposit (CDs), precious metals, annuities, insurance, IRAs and cryptocurrency.

Fidelity offers all of these investment assets, with one exception: The company does not offer futures trading.

Pricing and Fees

• Fees. In many cases, both companies charge no fees for the same services. For instance, Charles Schwab and Fidelity don’t assess account management fees.
• Commission-free trading. Charles Schwab does not charge a commission for online trades of listed stocks and ETFs, options and mutual funds under the Schwab Mutual Fund One Source umbrella. Fidelity charges no commission for online U.S. stock, ETF and bond trades.
• Options contract rates. Each company charges a fee of 65 cents per options contract.
• No minimum investment. Investors can open basic brokerage accounts at both Charles Schwab and Fidelity without making a minimum investment.

Managed Investment Accounts

Charles Schwab enables automated investing through its Schwab Intelligent Portfolios robo-advisor platform. Fidelity has its own robo-advisor as well, Fidelity Go.

Each robo-advisor has received at least a four-star rating from Forbes Advisor. Although at 4.6 stars, Fidelity ranks a little bit higher than Schwab, which has 4.4 stars.

Investment Research Capabilities

Charles Schwab and Fidelity both offer robust access to research to help investors make better investment decisions.

SIPC Coverage

Both companies protect securities and cash in client brokerage accounts through the Securities Investor Protection Corp. (SIPC). SIPC coverage protects up to $500,000 worth of securities, including $250,000 of cash.

Charles Schwab vs. Fidelity: Differences

Although Charles Schwab and Fidelity have a lot in common, there are key differences you should know.

Investment Offerings

• Futures trading. Charles Schwab offers futures trading, whereas Fidelity does not.
• Cryptocurrency trading. Fidelity enables investors to directly buy and sell cryptocurrency, while Schwab does not. There are, however, a handful of ways to get cryptocurrency exposure at Schwab. The company offers a range of cryptocurrency ETFs and mutual funds, all of which, due to SEC regulations, trade cryptocurrency futures rather than holding crypto directly. Clients with Schwab futures accounts can also trade cryptocurrency futures themselves. Finally, Schwab offers exposure to a number of Cryptocurrency Coin Trusts, which allow investors to trade shares in trusts holding large pools of different cryptocurrencies.
• Mutual funds. Charles Schwab has more mutual funds (over 17,000) than Fidelity (over 10,000). In addition, Charles Schwab provides a broader array of no-load, no-fee mutual funds (over 4,000) than Fidelity does (nearly 3,400).
• Fractional investing. While both brokerages offer fractional investing—which is the ability to buy fractional shares, or slices, of stocks—Charles Schwab limits it to shares of companies listed on the S&P 500. Fidelity, however, allows fractional investing for more than 7,000 U.S. stocks and ETFs.

Wire Fees

Fidelity does not charge fees for wire transfers. Meanwhile, Charles Schwab charges $25 for outgoing wire transfers ($15 if done online) but no fee for incoming wire transfers.

Margin Rates

Interest rates on margin loans are generally lower at Fidelity than at Charles Schwab. As of May 5, 2023, the range for margin rates at Fidelity was 9% to 13.3255%. Margin rates at Charles Schwab ranged from 11.575% to 13.325% as of May 5, 2023.

Broker-Assisted Trades

If you need a broker’s help with a stock or ETF trade, you’ll pay more at Fidelity ($32.95) than you will at Charles Schwab ($25).

Who Should Choose Charles Schwab?

If you’re bugged by paying fees and looking for a wider variety of no-load, no-fee mutual funds, Charles Schwab might be a better option than Fidelity.

Charles Schwab ranks No. 1 in the J.D. Power 2023 U.S. Full-Service Investor Satisfaction Study. Forbes Advisor also ranks Charles Schwab among the country’s best online brokers, noting in particular that the company has “reliable and competent” customer service representatives.

In addition, Schwab subsidiary TD Ameritrade ranks as Forbes Advisor’s Best Online Broker for Beginners and Best Online Broker Mobile App.

Charles Schwab Pros

• More than 4,000 no-load, no-fee mutual funds
• Lower fees than Fidelity for broker-assisted trades
• Availability of futures trading
• More branches than Fidelity

Charles Schwab Cons

• Fractional investing limited to S&P 500 companies
• Fees for some wire transfers
• Generally higher margin rates than Fidelity
• Slightly lower Forbes Advisor rating than Fidelity
• No direct trading of cryptocurrency

Who Should Choose Fidelity?

If you’re a fan of fractional investing and automated investing, Fidelity might be a better bet compared with Charles Schwab. A Forbes Advisor review praises Fidelity for its “excellent, well-rounded platform that’s a great choice for active traders, long-term investors or people who are new to investing.” In fact, Forbes Advisor ranks Fidelity as the Best Online Broker overall.

In addition, although Charles Schwab lands at No. 1 on the J.D. Power 2023 U.S. Full-Service Investor Satisfaction Study, Fidelity takes the No. 3 position. The two companies swap places in the J.D. Power 2023 Self-Directed Investor Satisfaction Study, however. Fidelity comes in at No. 1 and Charles Schwab places No. 3.

Fidelity Pros

• Broader availability of fractional investing
• No fees for wire transfers
• Generally lower margin rates than Charles Schwab
• Slightly higher Forbes Advisor robo-advisor rating than Charles Schwab
• Direct trading of cryptocurrency

Fidelity Cons

• Fewer no-load, no-fee mutual funds (nearly 3,400) than Charles Schwab
• Higher fees than Charles Schwab for broker-assisted trades
• Lack of futures trading
• Fewer branches than Charles Schwab

How to Choose the Right Investment Broker

It’s important to make an informed decision when you’re picking an investment firm. After all, thousands or even millions of dollars could be at stake.

Whether you’re considering Charles Schwab, Fidelity or other investment brokers, ask these questions:

• What products and services does the firm provide?
• What are the firm’s fees and commissions?
• Is the firm a discount broker or a full-service broker?
• Is there a requirement for a minimum investment?
• How does the firm go about making investment recommendations?
• Does the firm offer one-on-one help from investment representatives?
• How accessible is the firm’s customer service? Is it available in person? By phone? Online?