Charles Schwab vs. Fidelity Investments 2019

Both Schwab and Fidelity have websites and downloadable platforms packed with features, news feeds, helpful research, and educational tools to grow your knowledge base and help you learn about other asset classes. Both brokers also offer multiple web-based and mobile platforms, and a downloadable platform aimed at frequent traders.Both were ranked in our top 5 with Fidelity at number one and Schwab in third place.

In our 2019 Best Online Brokers Awards, Charles Schwab received awards for Best Overall Online Brokers, Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Options Trading, Best for Penny Stocks, Best for Roth IRAs, Best for IRAs, Best for International Trading, and Best Web Trading Platforms.

Fidelity Investments received awards for Best Overall Online Brokers, Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Penny Stocks Best for Roth IRAs, Best for IRAs, Best for International Trading, and Best Web Trading Platforms.

Choosing between these two comes down to personal preference, and perhaps the geographic availability of one of their offices. Both have excellent fundamental research offerings and over 200 commission-free exchange-traded funds. Their commission structures are nearly identical. Schwab clients can trade futures and futures options while Fidelity's customers have greater access to international equities, derivatives, and currencies. Short sellers may find more opportunities with Fidelity.

Fidelity lets you open an account for free, though an unfunded account will not have access to most of the research functions after 30 days. Schwab lets you open an account without funding it also, but there's a catch: clients must also open a free, no minimum High Yield Investor Checking account linked to the Schwab One brokerage account. Without the link there is a $100 minimum with a $100/month direct deposit or $1,000 minimum for the Schwab One brokerage account.

Schwab has several platforms that you can launch after logging on to their flagship website, or you can download the StreetSmart Edge platform to your desktop, or run it from the cloud. StreetSmart Edge is Schwab’s advanced platform which features streaming real-time data and news along with a customizable charting toolkit. All of the platforms have the All In One Trade Ticket available, which lets you build an order using the asset class you choose in a flexible and intuitive way. Quotes update in real time. Schwab monitors its execution quality statistics, and the reports provided to clients after every trade include how much price improvement was achieved.

Fidelity's trade execution engine gives its clients a high rate of price improvement. Active Trader Pro, Fidelity's advanced platform, offers streaming data and customizable charting. There is always an order ticket on display, and contextual help has been added to guide you through the process.

Charles Schwab

• Several platforms from which to choose that offer streaming quotes and news
• All-in-One Trade Ticket lets you build an order using any asset class
• Trade execution reports include price improvement achieved on the order

Fidelity

• Streamlined trade ticket with contextual help available
• Streaming real time data on Active Trader Pro platform
• Excellent order executions that generate price improvement

Schwab clients' trading customizations and watchlists are stored in the cloud, providing the same setup no matter which platform is in use. Streaming video and almost all of the education resources can be accessed via mobile device as well. Options analysis and trading tools are built into the StreetSmart mobile apps. 

Fidelity's mobile apps are much fresher and easier to use than the website, which is reflected in the 50% increase in trades placed on mobile devices between 2017 and 2018. The startup screen can be customized, and contextual help has been added to the trade ticket. Watchlists you generate on the website can be viewed on mobile devices as well, and the full range of offerings can be traded on your phone or tablet. 

Charles Schwab

• Customization choices stored in the cloud and persist across platforms
• Streaming video and education offerings available on mobile devices
• Complex options analysis and trading possible on StreetSmart app

Fidelity

• Streaming data and customizable news feed
• Customizable landing page
• Watchlists sync across platforms

Schwab offers extensive equities research from a variety of sources including Credit Suisse, Morningstar, MarketEdge, Reuters and CFRA are available. For real-time news, you can pick up articles from the Associated Press, Globe Newswire, MT Newswires, Business Wire, and many others. Schwab’s proprietary rating system generates grades for over 3,000 companies.The Idea Hub on StreetSmart gives you several ways to seek out options trading ideas, and links to deeper analysis that you can do before firing off the trade. Charts on the StreetSmart platforms use streaming real-time data, and you can place a trade from a chart if you’d like.

Fidelity's screening tools can be used to narrow down your investment choices across a wide array of asset classes, including stocks, ETFs, options, mutual funds and fixed income. Their proprietary charting packing is augmented by Recognia’s technical patterns and events. On Active Trader Pro, you can set up streaming news feeds and video from Bloomberg TV. The stock snapshot pages include environmental, social and governance (ESG) ratings from MSCI.

Charles Schwab

• A wide range of equities research and news available
• StreetSmart's Idea Hub helps sort for options trading ideas
• Charts on StreetSmart platforms stream real-time data

Fidelity

• Stocks, ETFs, options, mutual funds and fixed income screeners available
• Stock snapshot pages include data for socially responsible investing
• Customizable charting package includes technical events from Recognia

A recently launched initiative has led to Schwab Live Daily, which provides 4-7 hours of video content every trading day. Most of it can be viewed via a Webex broadcast, and it’s open to clients and non-clients as well. Schwab also offers its Choiceology podcasts, which include information about behavioral economics and how to make better decisions. The firm publishes a magazine, “On Investing,” four times per year. The Schwab Learning Center covers a wide and deep range of educational content that focuses on different skill levels. Trading Paths are a series of bite-sized lessons that combine articles, videos, and worksheets to help clients understand different investing-related topics in depth. Schwab's security guarantee covers 100% of any losses in any Schwab accounts due to unauthorized activity.

Fidelity’s online Learning Center contains articles, videos, webinars and infographics that offer education for many investing-related topics such as options trading, fixed income selection, fundamental and technical analysis, and retirement planning. The firm offers webinars frequently, and online coaching sessions for more advanced topics. There are learning programs aimed at beginning investors in the mobile apps. Fidelity conducts a risk assessment when a client logs in, and based on certain criteria, may challenge the client with a two-factor authentication process, or with a security question.  Fidelity also has a security guarantee, which will reimburse you for losses from unauthorized activity in covered accounts occurring through no fault of your own. 

Charles Schwab

• Schwab Live Daily provides 4-7 hours of video content every trading day
• The Schwab Learning Center covers a wide and deep range of educational content
• Schwab's security guarantee covers 100% of any losses in any Schwab accounts due to unauthorized activity.

Fidelity

• Online learning center contains articles, videos, and other media for a wide range of investing and trading topics
• Learning programs for those new to investing can be accessed from mobile apps
• At logon, a risk assessment is performed. The security guarantee covers you in case of losses due to unauthorized activity

Schwab’s commissions are in the middle of the pack, at $4.95 per stock transaction and $4.95 per leg plus $0.65 per contract for options fees. Their margin rates are average. Bond transaction fees are $1 per bond.

Fidelity’s commissions are in the middle of the pack, for the most part. Their margin rates are slightly higher than average. For mutual funds that are not on the no transaction fee list, there is a $49.95 charge for an initial purchase, which is higher than average. Their bond transaction fees are just $1 per bond, and they do not mark up the secondary market bonds, which lowers the yield. Very frequent traders can work out their own commission schedule.

Charles Schwab

• Stocks/ETF trade fees: $4.95
• Options fees: $4.95 per leg plus $0.65 per contract
• Futures fees: $3.50 per contract

Fidelity

• Stocks/ETF trade fees: $4.95
• Options fees: $4.95 per leg plus $0.65 per contract
• Futures fees: Futures trading not enabled