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 February 2023, Schwab has over 34 million active brokerage accounts and $7.38 trillion in customer assets. Fidelity is larger still, with about 40.9 million individual investors and $10.3 trillion in total customer assets as of December 31st, 2022. 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 $0.65 per equity order up to 99 shares, savings of $4.21 on orders of 100 to 499 to shares, savings of $14.32 on orders from 500 to 1,999 shares, and savings of $26.89 on orders of 2,000 to 4,999 shares. Its average execution speed is 0.03 seconds for all of these order sizes. 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 $15.50 per 1,000-share equity trade. Fidelity has an average execution speed of 0.08 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, 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 13.05% and 11.325% and Fidelity's margin rates range from 8.75% to 13.075% as of March 23th, 2023. Some of the other typical account costs are cheaper at Fidelity. For example, Fidelity doesn't charge for domestic wire—but Schwab charges $15 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 2021, marking the third 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.
