Charles Schwab

Best online broker overall

Easy-to-use website
Broad range of investment offerings
Good customer service
Over 300 branch locations
Banking services

Higher commissions than others
$1,000 minimum initial investment

Our Analysis

February 2009. Experts note that Schwab has excellent investment tools, research, and customer support, and it keeps simplifying its commission structure. Investors used to pay $19.95 per trade; now it's $12.95 for the first 1,000 shares per year, $0.015 per share thereafter. Schwab has a $1,000 minimum deposit to open an account, which may be waived if you open a linked checking account or establish a minimum monthly deposit of at least $100. Investors seeking assistance may contact advisors either online or at one of Schwab's 300 branch locations. The Schwab website is uniformly praised for the information and research tools it offers. If you don't think you'll take advantage of in-person advice, TradeKing's trade cost half as much.

The best reviews of Charles Schwab come from our top-ranked reviewers: SmartMoney magazine, Barron's and Kiplinger's Personal Finance. J.D. Power and Associates' 2008 self-directed investor satisfaction survey also includes Schwab. Consumer Reports rates Schwab and 18 other online brokers; the full ratings chart is available only to subscribers, however.

Our Sources

1. SmartMoney.com

SmartMoney's 2008 annual survey lists the best and the worst online broker in each of six areas. SmartMoney staffers open accounts at each broker, evaluating them for responsiveness, tools, fees and more. Charles Schwab wins the award as best in the category of mutual funds and investment products.

Review: SmartMoney's Annual Broker Survey, Neil Parmar, May 20, 2008

2. Barron's

Charles Schwab ranks right in the middle among the 23 brokers in Barron's annual rankings, but earns four out of five stars overall. Schwab earns high marks for its easy-to-use website, but loses points for its trading technology and costs.

Review: Making It Click: Annual Ranking of the Best Online Brokers, Theresa W. Carey, March 17, 2008

3. Kiplinger Personal Finance Details/Subscribe

Editors at Kiplinger's Personal Finance magazine evaluate a dozen brokerages by scrutinizing costs, site features and research tools; Charles Schwab comes in second in this year's rankings. Schwab wins notice for its range of investment products, including access to foreign markets, as well as its website and customer service.

Review: Best of the Online Brokers, Thomas M. Anderson, Nov. 2008

4. J.D. Power & Associates

Charles Schwab comes in third overall out of 15 brokers in this annual customer satisfaction survey of 6,000 self-directed (meaning they don't use an advisor) investors. Schwab also ranks highly in the categories of account offerings, customer service and information resources.

Review: 2008 Self-Directed Investor Satisfaction Study, Editors of J.D. Power and Associates, Oct. 28, 2008

5. ConsumerReports.orgDetails/Subscribe

Consumer Reports rates 19 online brokers by opening accounts, making trades and calling each broker's customer service hotlines. Charles Schwab is included in the ratings chart, which is available online to website subscribers.

Review: Online Brokers: Better Prices, More Services, Editors of Consumer Reports, June 2007