Charles Schwab does not charge per-trade commissions for stocks, ETFs, or options

Charles Schwab eliminated commission fees on stock and ETF trades in 2019 and extended that to options trades in 2020. You can buy and sell individual stocks, exchange-traded funds, and options contracts without paying a per-trade fee. This applies whether you trade once a month or fifty times a day.

However, "no commission" does not mean "no cost." Schwab makes money on the spread between the bid and ask price, and certain account types or trading methods carry separate fees. Understanding what you actually pay requires looking beyond the headline.

Key Takeaways

  • Stock, ETF, and options trades carry no per-trade commission at Charles Schwab, but you still pay the bid-ask spread when you buy or sell.
  • Margin accounts charge interest on borrowed money, and some account types have monthly maintenance fees if your balance falls below a minimum.
  • Mutual funds sold by other companies may carry transaction fees, though Schwab's own mutual funds do not.
  • Certain trading methods like options on margin or trading during extended hours may trigger additional costs or risks you should understand before you trade.

What the bid-ask spread actually costs you

When you buy a stock, you pay the ask price (what sellers want). When you sell, you receive the bid price (what buyers offer). The difference is the bid-ask spread, and it goes to the market maker, not to Schwab. On a liquid stock like Apple, the spread might be a penny or two per share. On a thinly traded stock, it could be fifty cents or more.

This cost exists at every brokerage. It is not unique to Schwab, but it is real money that leaves your account on every trade. A $10,000 stock purchase with a 0.1% spread costs you $10 in spread alone, regardless of commission.

Account minimums and maintenance fees

Most Schwab account types have no monthly maintenance fee and no minimum balance requirement. A standard individual brokerage account, IRA, or taxable account costs nothing to hold open.

Schwab does offer premium accounts like Schwab Institutional or Schwab Advisor Services that cater to financial advisors and institutions. These accounts may have different fee structures. If you hold a standard retail account, you will not encounter a maintenance fee based on account size.

Margin interest and borrowing costs

If you open a margin account and borrow money to trade, Schwab charges interest on the borrowed amount. The rate varies based on how much you borrow and current market conditions, but it typically ranges from around 5% to 12% annually, depending on your balance tier. Schwab publishes its current margin rates on its website.

You only pay margin interest on the money you actually borrow. If you have $50,000 in your account and borrow $10,000, you pay interest only on that $10,000. If you never borrow, you never pay margin interest, even if your account is set up for margin trading.

Mutual fund transaction fees

Schwab does not charge transaction fees on its own mutual funds or on most mutual funds in its fund marketplace. However, some mutual funds from other companies may carry a transaction fee when you buy or sell them through Schwab. Schwab's platform will disclose this fee before you complete the trade.

If you plan to buy mutual funds regularly, you can avoid these fees by choosing from Schwab's no-transaction-fee fund list, which includes thousands of options. ETFs are often a lower-cost alternative to mutual funds and carry no transaction fees.

Options trading costs beyond commission

Schwab charges no commission on options trades, but the bid-ask spread on options can be wider than on stocks, especially for less-traded contracts. A spread of $0.05 to $0.10 per contract is common, and on wide-bid options it can be much larger.

If you trade options on margin (borrowing to fund the trade), you pay margin interest on the borrowed amount. Assignment fees and exercise fees do not apply at Schwab, so you will not be charged when an option expires in the money or you exercise it.

Wire transfers and other service fees

Schwab charges $0 for incoming wire transfers and $0 for outgoing domestic wire transfers. International wire transfers cost $25 for outgoing transfers. Check deposits through the mobile app are free. If you need a paper check or cashier's check, Schwab charges a fee for those services.

Account closure, account transfers, and most routine services carry no fee. Schwab's fee schedule is available on its website and is updated periodically, so check the current version if you plan to use a service beyond basic trading.

How Schwab's pricing compares to other brokers

Most major brokers—Fidelity, E*TRADE, TD Ameritrade, and others—also offer commission-free stock and ETF trading. The real differences lie in bid-ask spreads (which vary by market conditions, not the broker), margin rates, research tools, and customer service quality. Schwab is competitive on margin rates and offers strong educational resources, but you should compare the specific features you plan to use.

If you trade options frequently, compare the bid-ask spreads across brokers for the contracts you trade most. Spreads vary by broker and by the liquidity of the contract, so the cheapest broker for stocks may not be the cheapest for options.

Frequently Asked Questions

Do I pay anything if I just hold stocks and never sell?

No. Once you own a stock, you pay nothing to hold it at Schwab. No annual fees, no storage fees, no inactivity fees. You only pay costs when you buy or sell (the bid-ask spread) or if you borrow money on margin.

What happens if my account balance drops below a certain amount?

Standard Schwab brokerage accounts have no minimum balance and no fees based on account size. You can open an account with $1 and trade. Some premium account types do have minimums, but they are clearly disclosed when you open the account.

Are there hidden fees I should know about?

Schwab publishes its fee schedule publicly. The main costs are the bid-ask spread (unavoidable at any broker), margin interest if you borrow, and transaction fees on certain mutual funds. There are no hidden commissions on stocks or ETFs, and no surprise monthly charges on standard accounts.

Do I pay more if I trade during after-hours?

No per-trade commission applies during extended hours, just as it does during regular market hours. However, bid-ask spreads are typically wider during after-hours trading because there is less volume. You may pay more in spread costs, but not in commissions.

What if I want to trade penny stocks or very cheap stocks?

Schwab allows trading in stocks priced below $1, but bid-ask spreads on penny stocks are often very wide—sometimes 5% or 10% of the stock price. The lack of commission does not offset the spread cost on illiquid securities. Trade these cautiously and understand the spread before you buy.