Charles Schwab is a brokerage and banking company that lets you invest, trade, and manage money

Charles Schwab Corporation is a publicly traded financial services company that operates a brokerage platform, a bank, and advisory services. The company lets individual investors buy and sell stocks, bonds, mutual funds, and exchange-traded funds (ETFs). It also offers banking products like checking and savings accounts, and it provides financial advice through both automated tools and human advisors.

Schwab makes money through commissions on certain trades, interest on deposits, advisory fees, and lending products. The company does not charge monthly account fees for most of its basic brokerage accounts, which is why it appeals to people starting out with investing or managing their own money.

If you are reading this because you hold a Schwab account or are considering opening one, understanding what the company actually does — and what it does not do — helps you know what services are available to you and what you will need to handle yourself or find elsewhere.

Key Takeaways

  • Charles Schwab operates a brokerage platform where you can buy and sell investments, plus a bank that offers deposit accounts and loans.
  • The company does not charge monthly fees on most brokerage accounts, but it does charge commissions on certain trades and earns money from advisory services.
  • Schwab is a publicly traded company owned by shareholders, not a government agency or nonprofit, so its business model depends on generating revenue from customers.
  • You can use Schwab for investing only, for banking only, or for both, depending on what you need.
  • Schwab acquired TD Ameritrade in 2020 and has been consolidating those customers onto its own platform.

How Schwab makes money and what that means for you

Schwab charges commissions on certain transactions — for example, options trades and some mutual fund purchases carry a per-trade fee. It also earns money when you hold cash in a Schwab account, because the company pays you a small interest rate on deposits but lends that money out at higher rates. Advisory services, whether automated (robo-advisor) or managed by a human advisor, come with fees based on the assets you have under management.

This matters because it shapes what Schwab recommends and what it does not. The company has an incentive to keep you trading and to move money into advisory services. It does not have an incentive to tell you to stop trading or to move your money elsewhere. If you are aware of this, you can make decisions that serve your own interests rather than Schwab's revenue targets.

What Schwab's brokerage platform does

The brokerage side of Schwab lets you open an investment account and buy or sell securities — stocks, bonds, ETFs, mutual funds, and options. You can place trades through the Schwab website, mobile app, or by phone. The platform also provides research tools, stock screeners, and educational content about investing.

Schwab does not manage your investments for you unless you pay for an advisory service. You make the decisions about what to buy and sell. The platform executes your orders and holds your securities in your account. If you want someone else to make investment decisions on your behalf, you would need to enroll in one of Schwab's advisory programs or work with a financial advisor outside Schwab.

What Schwab's banking services include

Schwab Bank, a subsidiary of Charles Schwab Corporation, offers checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs). These accounts are FDIC-insured up to the standard limits (currently $250,000 per account type per depositor). You can link your Schwab brokerage account to your Schwab Bank account to move money between them easily.

Schwab Bank also offers mortgages, home equity lines of credit, and personal loans. Interest rates and terms vary based on your credit and the current market. These products are not unique to Schwab — you can find similar offerings at other banks — but having them in one place can simplify your finances if you already use Schwab for investing.

The difference between Schwab and a traditional bank

A traditional bank like Chase or Bank of America focuses primarily on deposits and lending. Charles Schwab started as a brokerage and added banking services later. This means Schwab's core business is still investments and trading, and banking is secondary.

The practical difference is that Schwab's checking and savings accounts often offer higher interest rates than traditional banks because the company uses deposits to fund its lending and investment operations. However, Schwab has fewer physical branches than large traditional banks, so if you need in-person banking, you may find it less convenient. Schwab does have some physical locations and partners with other banks' ATMs, but most customers handle banking through the app or website.

What happened when Schwab acquired TD Ameritrade

In 2020, Charles Schwab completed its acquisition of TD Ameritrade, another major brokerage. Schwab has been moving TD Ameritrade customers onto its own platform over time. If you had a TD Ameritrade account, you may have received notices about this transition or may have already been moved to Schwab's systems.

This consolidation means there is now one Schwab platform instead of two separate platforms. Existing TD Ameritrade customers kept their accounts and holdings, but the underlying technology and interface shifted to Schwab's. If you are a former TD Ameritrade customer with questions about your account, Schwab customer service can help you navigate the transition.

How Schwab compares to other brokerages

Schwab competes with other brokerages like Fidelity, E-Trade, Interactive Brokers, and Robinhood. The main differences are in commission structures, research tools, customer service quality, and the types of accounts offered. Schwab generally positions itself as a full-service brokerage with banking added on, while some competitors focus narrowly on trading or on low-cost index investing.

If you are deciding between brokerages, compare the specific features you need: commission costs, available investment types, research tools, customer service hours, and whether you want banking services in the same place. No single brokerage is best for everyone — the right choice depends on how you plan to invest and what support you need.

Frequently Asked Questions

Is Charles Schwab a bank or a brokerage?

It is both. Charles Schwab Corporation owns a brokerage platform and a bank subsidiary. You can use Schwab for investing only, for banking only, or for both. The brokerage side lets you trade securities; the bank side offers deposit accounts and loans.

Does Schwab charge monthly fees?

Most Schwab brokerage accounts do not charge monthly maintenance fees. However, the company does charge commissions on certain trades (like options) and earns money from advisory services and interest on deposits. Some account types or services may have specific fees — check your account agreement or contact Schwab for details about your situation.

Is my money safe at Schwab?

Schwab Bank deposits are FDIC-insured up to $250,000 per account type. Securities held in a Schwab brokerage account are protected by SIPC (Securities Investor Protection Corporation) up to $500,000 per account. This means if Schwab fails, your money and investments are protected up to these limits. For amounts above these thresholds, ask Schwab about additional protections.

Can I move my money out of Schwab if I want to?

Yes. You can transfer securities to another brokerage through an ACAT (Automated Customer Account Transfer) process, which usually takes a few business days. You can also withdraw cash from your Schwab Bank account or transfer it to another bank. Schwab may charge a fee for outgoing transfers of securities, so check the fee schedule before you initiate a transfer.

What is the difference between Schwab and Fidelity?

Both are large brokerages with banking services. Schwab and Fidelity have similar commission structures and research tools. The main differences are in customer service approach, specific features, and account minimums for certain services. Compare them based on the investments you want to make and the level of support you need.