Anyone with an interest in investing in the U.S. is familiar with both Fidelity Investments and Charles Schwab, two giants in the financial services industry.
According to its latest annual report, Fidelity Investments had $18 trillion in assets under administration as of Dec. 31, of which $7.1 trillion were assets managed on behalf of investors by its investment teams.
As of April 30, Charles Schwab had $12.6 trillion in client assets, with 39.3 million brokerage accounts and 2.3 million banking accounts.
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When comparing Fidelity and Schwab, you’re really choosing between two of the strongest all-around brokerages in the U.S.
Both offer commission-free stock and ETF trading, retirement accounts, research tools, mobile apps and strong customer support. The better option depends on your investing style, goals and the features you value most.
In what follows, we consider what the two of them are best at and how you can choose the one that more closely aligns with your trading and investment needs.
— Fidelity Investments overview.
— Charles Schwab overview.
— Where Fidelity wins.
— Where Schwab wins.
— How to choose between Fidelity and Schwab.
A Brief Overview of Fidelity Investments
Fidelity Investments was founded in 1946 by Edward C. Johnson II. It’s privately held under FMR LLC, led by the Johnson family.
Its core services include investment management (mutual funds, ETFs, stocks, bonds, options, crypto), retirement accounts, health savings and college savings plans, and employer benefit programs.
Users can also opt for Fidelity’s wealth management service, where they can collaborate with a dedicated Fidelity advisor to build a personalized wealth management strategy.
Fidelity is also active in technology innovation (Fidelity Labs and Fidelity Digital Assets) and charitable giving (via Fidelity Charitable).
A Brief Overview of Charles Schwab
Charles Schwab was founded in 1971 by Charles R. Schwab. The company is publicly traded on the New York Stock Exchange, and it currently has over 33,500 employees serving investors, advisors and employers.
Its core services include banking and lending (via Charles Schwab Bank), brokerage and trading (stocks, ETFs, options and futures), financial advisory and wealth management, and custodial and consulting services for independent registered investment advisors.
Schwab has integrated TD Ameritrade’s thinkorswim tool into its platform to provide better tools for active traders.
Where Fidelity Wins
Better for Low-Cost Index Fund Investing
Through its Fidelity Zero funds, Fidelity provides index funds with zero management fees, or expense ratios. These funds are based on Fidelity’s proprietary broad market indexes, which helps avoid licensing fees from traditional index providers.
These zero-expense-ratio funds are appropriate for long-term investors who want to minimize costs.
Higher Yield on Uninvested Cash
As of May 26, users of Fidelity brokerage accounts can earn up to 3.3% yield on uninvested cash kept in the Fidelity Government Money Market Fund (SPAXX). This contrasts with Schwab, where users earn 0.01% annual percentage yield on default sweep accounts.
Broader Access to Fractional Investing
While Schwab offers fractional investing in S&P 500 companies (through its Stock Slices product), Fidelity allows fractional investing across a wide range of stocks and ETFs.
Also, while the minimum investment on Schwab is $5 per slice, users only need a minimum of $1 to buy stocks and ETFs on Fidelity.
Better Access to Cryptocurrencies
Fidelity currently offers direct crypto trading and custody through Fidelity Digital Assets.
However, Schwab is launching its own crypto product soon, and investors will be able to trade Bitcoin (BTC) and Ethereum (ETH). Right now, Schwab’s offerings are limited to exchange-traded products and stocks of crypto companies rather than spot trading.
Retirement Integration
Many employer 401(k) plans are run through Fidelity. By using it as your broker, you can manage all your investment accounts on one platform.
Wider Variety of Research and Data
Fidelity provides reports from Argus, Zacks, CFRA, S&P Global and more. The result is that investors get fundamental research, technical analysis, sentiment analysis and forward-looking ratings in one place.
These reports are also integrated into its learning resources, making it easier for beginners to understand and apply them.
Though Schwab also offers extensive research and data (integrated with Morningstar, Argus and Market Edge), Fidelity has the edge based on depth and accessibility.
More Accessible Robo-Advisor Platform
Fidelity Go, Fidelity’s robo-advisor platform, has a low entry barrier: $10 to start. In contrast, you’ll need $5,000 to start with Schwab Intelligent Portfolios.
[READ: Robo Advisor vs. Online Financial Advisor: What’s the Difference?]
Where Charles Schwab Wins
Better Tools for Active Traders
Since Schwab integrated the thinkorswim platform, it has been a leading choice for active traders who require advanced trading tools like professional charting, real-time market analytics, options trading strategies, algorithmic trading tools and paper trading simulations.
Access to Futures and Forex
Schwab provides access to futures, futures options and forex, all of which are areas that Fidelity doesn’t cover.
Larger Selection of No-Transaction-Fee Mutual Funds
Fidelity’s 3,143 no-transaction-fee mutual funds fall short of the more than 4,000 offered by Schwab.
Banking Integration
Schwab operates Charles Schwab Bank, a full-service, Federal Deposit Insurance Corp.-insured institution.
Clients can manage their checking, savings and investment accounts under one platform, which makes it easier to transfer funds from one account to another.
Zero-Fee Robo Advisor
Fidelity charges no advisory fees for robo-advisor accounts with balances of less than $25,000. Those with balances above $25,000 will pay 0.35% per year.
In contrast, Schwab does not charge advisory fees in any robo-advisor account.
How to Choose Between Fidelity and Charles Schwab
Fidelity and Schwab are both strong choices for investors and traders.
They both charge zero commissions for stocks and ETFs and a competitive 65 cents per contract for options.
Also, neither has a minimum account balance for its brokerage accounts, and there’s excellent customer support for all users.
Nonetheless, one of them may be better for you, given your goals, investing style and the features you value most.
From the foregoing, Fidelity may be the better choice if the following applies to you:
— Long-term passive investor: As a long-term passive investor, you may find Fidelity’s Zero funds and other low-cost options appropriate for your investing goals. By reducing your cost, you can maximize your returns.
— Low investment capital: If you have low investment capital, you might find Fidelity’s fractional investing more attractive. Also, you can enjoy Fidelity Go with just a $10 investment.
— Accessible comprehensive research: If you prefer accessible comprehensive research that is not too focused on technical analysis, Fidelity’s research and data may appeal to you.
— Lots of idle cash: If you are a market timer, a dollar-cost averager or someone who likes to have a portion of their portfolio in cash, the higher interest rates Fidelity offers may make it more compelling.
— Crypto enthusiast: Fidelity is a better pick if you are a crypto enthusiast who desires spot access to digital coins, though Schwab will have this available soon.
— Access to retirement accounts: If Fidelity already manages your retirement accounts, then you might be better off opening a Fidelity brokerage account so you can manage all your accounts on the same platform.
On the other hand, Schwab looks like the better choice if the following applies to you:
— Advanced trader: If you need access to advanced trading tools, the thinkorswim platform is hard to beat.
— Charles Schwab bank account owner: If you already have a bank account with Schwab, it will be easy to integrate it with your investment account on the same platform.
— Large robo-advisor account balance: If you have $5,000 to invest in a robo-advisor account, the zero-advisory-fee Schwab Intelligent Platforms may appeal to you.
— Broader access to financial assets: Schwab provides access to futures, futures options, forex and a larger selection of no-transaction-fee mutual funds. If you want a larger pool of options to choose from, Schwab may be the better option.
Speak to your financial advisor before choosing between these two financial services giants. They will be in the best position to provide personalized guidelines on what you need at this point in your wealth-building journey.
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Fidelity vs. Charles Schwab: Which Is the Right Choice for You? originally appeared on usnews.com
Update 05/27/26: This story was previously published at an earlier date and has been updated with new information.
