Charles Schwab vs E*Trade 2020: What Brokerage Offers More to Investors?

Charles Schwab vs E*Trade

In this Charles Schwab vs E*Trade review, the two go head-to-head as we compare them on virtually every possible aspect. The end result might surprise you.

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When it comes to choosing an online brokerage, investors want access to a variety of investment choices, educational tools, and robo-advisors. Both E*Trade and Charles Schwab offer these services, but not all of them are free.

Founded in 1973, Charles Schwab has always been the gold standard of full-service brokerages, and until recently, it was also one of the most expensive to invest with. However, thanks to the zero commission war in October 2019, Schwab was forced to change its fee schedule just like TD Ameritrade, E*Trade, and many other brokerages.

E*Trade started the online brokerage trend back in the 1990s and continues to be the most popular brokerage for beginners online. With easy-to-use tools, education courses, and excellent customer support, the brokerage now offers a variety of mobile apps for customers that are are also free to use.

Charles Schwab vs E*Trade – Quick Comparison 

While Charles Schwab may offer a lot of resources, it may not be the best for beginner investors, which E*Trade caters to with more educational resources and portfolio-building tools. Throughout the following sections we compare Charles Schwab and E*Trade to show you how they match up.

Pros and Cons of Charles Schwab

  •  $0 commision fees for stocks, ETFs, and options
  •  Over 3,500 NTF mutual funds with $49.99 fees for all other mutual funds
  •  Amazing StreetSmart Edge platform caters to all traders and offers customizable charts, research tools, and an intuitive mobile app
  •  Excellent trade execution quality
  •  Schwab Intelligent Portfolios is an expensive robo-advisor but highly-rated by customers

Pros and Cons of E*Trade

  •  $0 commission fees for stocks, ETFs, and options
  •  Lots of educational content and an easy-to-use platform make this a great broker for beginners
  •  Multiple platforms including E*Trade Web, E*Trade Pro, and Power E*Trade, all with mobile apps
  •  Extensive research tools including screeners, technical studies, charts, customizable data and dashboards
  •  Easy entry robo-advisor E*Trade Core Portfolios only charges 0.30% management fee per year with a $500 minimum deposit
  •  Over 4,400 NTF mutual funds, and $19.99 for all other funds

Fees and Commissions

Both of these brokerages have commission-free stock, ETF, and options trading. This has become the standard for all brokers since October 2019, so it’s no surprise that they are so similar. There are some minor differences in the way that the brokers charge for options, however.

With E*Trade, options contracts range from $0.50 per contract to $0.65 per contract, depending on your trade volume. E*Trade likes to promote trade volume, so 30 trades or more per quarter earns you a slight discount. You can see a detailed fee structure in our E*Trade review, where we give the broker 9/10 stars.

Fees and Commissions for Charles Schwab Options Trading
With Schwab, it’s a flat fee of $0.65 per contract no matter how much you trade.

The two brokerages offer broker-assisted trades for $25, and they have a long list of no-transaction-fee mutual funds. However, E*Trade offers 4,400 NTF mutual funds, while Charles Schwab only has 3,500 and charges more for non-NTF funds at $49.99. With E*Trade, you’ll pay $19.99 for all other mutual funds.

Both brokerages offer futures trading and charge $1.50 per contract, but E*Trade charges $1.50 per side plus any fees, except for Bitcoin futures. Charles Schwab does allow you to trade Bitcoin futures.

You can trade in OTC “penny stocks” with E*Trade and Charles Schwab, but it’s not commission-free for one of these brokers. E*Trade charges $4.95 to $6.95 per trade depending on volume. However, Charles Schwab charges $0 commissions for all pink sheets/OTCBB stocks priced under $1.

Winner: These brokers come out evenly in fees and commissions. You will pay more for mutual fund fees with Charles Schwab, but E*Trade charges more for pink sheets and futures.

Investment Selection

Both E*Trade and Charles Schwab offer the same selection of investments, including:

  •  Stocks
  •  Bonds
  •  Mutual funds
  •  ETFs
  •  Options
  •  Futures

The differences in these two boil down to mutual fund selection and futures. While both brokerages offer thousands of mutual funds, E*Trade offers significantly more no-transaction-fee mutual funds. You can find over 4,400 NTF mutual funds with E*Trade in comparison to only 3,500 with Charles Schwab.

Clients with a Charles Schwab Futures account can trade in Cboe Bitcoin Futures (XBT), which is located on the StreetSmart Central or Street Smart Mobile trading trading platforms from Schwab. Read more about its mobile trading platforms in our all-encompassing Charles Schwab review.

Charles Schwab StreetSmart Central
Charles Schwab offers futures trading through its StreetSmart Central platform.

E*Trade also allows you to trade in CME Bitcoin Futures, but there are some conditions. Your account must be prefunded, and some functionality like sweeps and global buying power is disabled.

You also must get an approval from a Futures Specialist before trading in what E*Trade considers “a high level of risk.” However, E*Trade announced it would eventually launch Bitcoin and Ether trading last year.

Schwab has been very vocal about its distrust of cryptocurrency, referring to the phenomenon as ‘cryptomania’. With its upcoming merger with TD Ameritrade, it’s uncertain if Schwab will continue the relationships TD Ameritrade had with ErisX.

Winner: Again, the two are quite evenly matched, but E*Trade inches out ahead thanks to its mutual fund offerings.

Trade Experience

Everything you need to trade online can be found on E*Trade and Charles Schwab. The two offer robust platforms and comprehensive investment services, as well as their own proprietary software. Perhaps that’s why they both made our list of the top online stock brokers on the market.

Trading with E*Trade

E*Trade offers three different platforms including its web browser trading interface E*Trade Web, Power E*Trade, and E*Trade Pro. All of these are free to use and available to any customer who wishes to start trading. You don’t need a minimum deposit either.

E*Trade Web offers the easiest entry for beginners to get into investing. You can see free streaming market data, live market commentary, analyst research, stock screeners, watch lists, and much more.

E*Trade Pro is the desktop platform, which offers a Strategy Scanner tool and multiple back-testing capabilities.

However, Power E*Trade is the truly robust platform that you can download and launch on desktop or mobile. You’ll get advanced historical and intraday charting with over 100 technical studies to choose from, as well as multiple chart types and drawing tools.

E*Trade Pro home page
E*Trade features a variety of platforms allowing clients to trade from the device of their choice.

Trade execution quality is a major issue for E*Trade, which has tried to increase its speed and price improvement strategy, and while the brokerage posts its trade execution statistics online, the percentages are lower than some of the larger brokerages like TD Ameritrade and Charles Schwab.

Trading with Charles Schwab

Charles Schwab also offers an impressive platform with StreetSmart Edge. You can access it via the web or as a desktop version, and you’ll get tools to test out trading opportunities, look at technical analysis charting, streaming quotes, and customization features. It also comes with more programs for options trading in StreetSmart Central.

Screenshot of Charles Schwab StreetSmart Edge Trading Platform
The StreetSmart Edge trading platform allows users to view a number of live charts, feeds, and news sources simultaneously.

Everything can be accessed across platforms thanks to the cloud, so whether you make trades or update your feeds on Schwab.com or in StreetSmart Edge, you can see those changes across desktop, mobile, and web.

As far as trade execution quality, Charles Schwab also posts their statistics online. It shows that they mostly have fast trades with a 95.8% price improvement.

Both brokers made our list of the top 8 brokers for futures trading, illustrating how close the two are when compared.

Winner: These two brokerages are neck and neck when it comes to their platforms and trade experience, but we think the navigation and tips on E*Trade make it easier to use. Still, the trade execution score for E*Trade is quite low.

Education, Research, and Robo-Advisors

With larger brokerages that have tons of resources, educational content is truly key. However, E*Trade has made education their focus since the 1990s, upgrading their educational course content every few years to match the market sentiment and trends.

This is because beginner investors are the brokerage’s main audience. Has Charles Schwab been able to do the same?

E*Trade Education and Research

When it comes to educational resources, it’s hard to beat E*Trade. The platform offers live webinars on technical analysis, options trading strategies, retirement planning, futures, and more. There are also several online courses available, including courses from investment research extraordinaire Morningstar.

E*Trade Knowledge is E*Trade's educational resource to help investors learn.
E*Trade’s educational resources include a number of webinars and courses – for free.

There is also a themed investment education section that offers research on different companies and how they align with values and socioeconomic perspectives, such as gender diversity, cybersecurity, and clean fuel.

There are also a ton of screeners, calculators, charts, streaming quotes, and testing capabilities, specifically for options. You can even access these features on the mobile app.

In the end, both platforms provide solid educational support for new traders. In our comprehensive review of the best platforms for beginners, E*Trade currently holds 2nd place, while Charles Schwab has the 4th spot.

Does E*Trade Offer a Robo-Advisor?

If you want to have your portfolio managed by AI, you can opt for E*Trade Core Portfolios, which is the brokerage’s flagship robo-advisor service. Investors can open an account with just $500 and pay 0.30 percent of their portfolio in management fees per year. The service manages and builds your portfolio for you, allowing you to pick and choose some themes according to socially responsible themes.

Education and Research: Is Charles Schwab Good for Beginners?

For the past several years, Charles Schwab has swallowed up several other brokerages and trading houses, leading to a bevy of research tools, educational content, screeners, and reporting options. In fact, most research tools and screeners can be found on its various platforms.

Investors can access reports from Credit Suisse, Market Edge, Ned Davis, Morningstar, and others. There are also real-time news feeds, earnings reports, and research reports with market commentary from in-house Schwab analysts and experts.

You can ask Google Assistant or Alexa to generate these reports for you and send them to your email.

The best part about these offerings is the technology behind the investment screeners. These were developed to have more in-depth details and different features than you’ll find with other brokerage’s research tools.

For example, investors can save their screens, and they are easy to access across all platforms. Company experts also compile “Select Lists” of ETFs, mutual funds, and stocks that may interest you. You can easily differentiate between these categories as they are organized into different sections.

While there are videos, webinars, and hundreds of articles available on the website and around the web, Charles Schwab does not have the same educational courses as E*Trade, but it’s still quite robust and helpful for beginner and advanced investors.

Does Charles Schwab Have a Robo-Advisor?

Investors who want automated investing and management can sign up for Schwab Intelligent Portfolios. While there is no account management fee, it is a premium subscription with a $30/month cost.

It includes access to all robo-advisor tools, as well as human financial planners. In addition, you will need to deposit $5,000 minimum to get started.

Winner: It’s easier to get into E*Trade’s beginner investor courses and robo-advisor option. Charles Schwab requires too high of a premium cost for their robo-advisor.

Mobile and New Trade Tech

Both of these brokers provide robust, state-of-the-art mobile apps for their trading platforms and robo-advisory services.

You can access E*Trade Pro and Power E*Trade on mobile just as you would online. All of the trade types are accessible, and you can customizable your home screen to include streaming quotes, watchlists, accounts, and more. You can also watch Bloomberg TV live within the app.

Charles Schwab offers similar apps for StreetSmart Edge and Intelligent Portfolios. You can see all of your accounts and customize your home screen, and it has intuitive order entry with real-time data and built-in research.

Screenshot of Charles Schwab Intelligent Portfolios Automated Investing Page
Charles Schwab’s intelligent portfolios include robo-advisors with automated investing.

Winner: These two match up equally in mobile, but Charles Schwab’s robust StreetSmart Edge platform is hard to beat on mobile. You can access all research tools and trading functionality within one app.

E*Trade Customer Support

With 24/7 support, E*Trade truly has the best options for immediate assistance. You can visit their online customer service page to find live chat, email, and phone support numbers.

When we talked to E*Trade’s live chat service, we received a prompt response from a real human, including links to more information and how we could get started with day trading.

Charles Schwab Customer Support

All customer support options are available through CharlesSchwab.com. You can load live chat any time of day, and if you have an account already, you can request a personal advisor to help with account questions.

Phone support is also available 24/7, and you can request a human advisor if your account permits. Our call was answered immediately by a customer representative, and we received an email with links for further clarification.

Verdict: Which Broker is Right for You?

When it comes to investing with a big brokerage, investors need access to more education tools, technical analysis, charting, and mobile apps that keep everything synced on the go. Both E*Trade and Charles Schwab offer all of that to investors, but the navigation may be a bit simpler and easier with E*Trade.

E*Trade also offers more mutual funds and lower fees on non-NTF funds. In addition, their robo-advisor is much easier to use and has a lower minimum deposit of just $500 in comparison to the $5,000 that you would have to invest with Schwab.

Frequently Asked Questions: Charles Schwab and E*Trade Compared

Is Charles Schwab or E*Trade best for retirement?

When it comes to retirement, it really depends on how and what you want to retire with. Charles Schwab is known as a retirement leader with lots of automated, DIY, and full-service account options for retirement investors. However, it’s more costly, and it lacks the amount of mutual funds available with E*Trade.

E*Trade offers lower fees overall when it comes to mutual funds and automated investing services. While you may not get as many full-service features such as a dedicated human broker or financial planner, you can use their educational research and retirement calculators to craft a winning strategy.

Does Schwab or E*Trade provide the best stock research? 

With Schwab, you can use fundamental research tools to look at company earnings, dividends, ratings, short trade interest, and real-time news. With web-based strategies, ideas, and daily market updates, investors have everything at their fingertips. However, the website can be a bit intimidating, and StreetSmart Edge’s platform has a bit of a learning curve if you want to find all of the tools.

In comparison, E*Trade offers the most research and tools with its Power E*Trade platform. You can access headline news, Morningstar ratings, performance data, and TipRanks recommendations. There are also a variety of technical analysis charting tools to customize with over 100 different studies.

These two brokerages are pretty equal in their stock research and planning tools, but we find E*Trade makes it easier for beginners to use their tools and get started.

What brokerage offers better customer support: E*Trade or Charles Schwab?

Both brokerages offer 24/7 customer support through live chat, phone, and email. However, Charles Schwab has 300 branch locations in comparison to E*Trade’s 30 locations.

Is Charles Schwab good for beginners?

In short, yes. Charles Schwab offers a number educational resources and even offers a robo-advisor to handle difficult investment decisions.

Does Charles Schwab have hidden fees?

Even commission-free trades will incur certain fees or charges. Ultimately, the exact fee amount will depend on the asset traded, the type of trade, and the trading method utilized.

Does Charles Schwab charge an annual fee?

Charles Schwab does not charge an annual fee for its IRA or bank account. When it comes to trades, fees are charged per contract with additional service fees depending on the trading method.

How much money do I need to open a Charles Schwab account?

There is no minimum deposit required when opening a Charles Schwab account.

How much money do I need to open an E*Trade account?

The E*Trade minimum deposit is $500.

About Author

Tim Fries Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim is also the co-founder of Protective Technologies Capital (protechcap.com).