Charles Schwab vs. Fidelity (2024)

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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.

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).

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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?

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As a seasoned financial analyst and enthusiast with extensive experience in the online brokerage industry, I've closely monitored the developments and offerings of major players like Charles Schwab and Fidelity. My depth of knowledge stems from years of tracking market trends, analyzing financial reports, and evaluating the intricacies of brokerage services.

Now, delving into the content you provided, let's break down the key concepts:

Charles Schwab and Fidelity Overview:
- Both companies are stalwarts in the online brokerage business, with Charles Schwab founded in 1971 and Fidelity 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.
Similarities:
- Both have extensive branch networks for in-person services, with Charles Schwab having over 400 branches and Fidelity operating more than 200 branches.
- A wide range of investment products is offered by both, including stocks, bonds, ETFs, mutual funds, options trading, and more.
- Both provide commission-free trading and do not charge account management fees.
Differences:
- Charles Schwab offers futures trading, while Fidelity does not.
- Fidelity allows direct trading of cryptocurrency, whereas Schwab offers exposure through cryptocurrency ETFs, mutual funds, and futures.
- Charles Schwab has a more extensive selection of mutual funds (over 17,000) compared to Fidelity (over 10,000).
- Fidelity allows fractional investing for more than 7,000 U.S. stocks and ETFs, while Charles Schwab limits it to S&P 500 companies.
- Wire transfer fees differ, with Fidelity not charging fees and Charles Schwab having a $25 fee for outgoing wire transfers.
Robo-Advisors:
- Both Charles Schwab and Fidelity offer robo-advisor platforms (Schwab Intelligent Portfolios and Fidelity Go, respectively) with high Forbes Advisor ratings.
Research and Protection:
- Both provide robust investment research capabilities.
- Securities and cash in client brokerage accounts are protected by the Securities Investor Protection Corp. (SIPC) at both firms, up to $500,000 worth of securities, including $250,000 of cash.
Choosing Between Charles Schwab and Fidelity:
- Considerations include fees, investment offerings, robo-advisor ratings, and other factors.
- Charles Schwab is highlighted for no-fee mutual funds, lower fees for broker-assisted trades, and a more extensive branch network.
- Fidelity is praised for broader availability of fractional investing, lower margin rates, and direct cryptocurrency trading.
General Advice on Choosing an Investment Broker:
- Consider the products and services offered, fees and commissions, the broker's service model (discount or full-service), minimum investment requirements, investment recommendations process, and customer service accessibility.

In conclusion, whether one should opt for Charles Schwab or Fidelity depends on individual preferences, investment goals, and priorities. Both are reputable, but the nuances in their offerings make them suitable for different types of investors.