Investing to secure a comfortable retirement might not be a foreign concept for most people, but how to invest isn’t as clear. With more asset variety and investment services in the market than ever, it can be challenging to know how to get started. Companies like E-Trade, Schwab, and Fidelity have done their utmost to earn the business of individual investors across the country. With low fees and a broad range of services, investors of all stripes can easily start earning with an investment account with any of these firms. Which might suit you best, however, comes down to the details. Use this guide to understand the company that can serve your needs.
For more help with retirement planning, consider working with a financial advisor.
E-Trade vs. Schwab vs. Fidelity Overview
E-Trade, Schwab, and Fidelity are three large financial companies that offer clients investment and banking services. Each differs in its offerings, and understanding the distinctions can help you decide which one will serve you best.
E-Trade was one of the first companies to establish itself in the online brokerage market. Its longstanding E-Trade app is excellent for new investors looking to get experience in the stock market. Its second app, Power E-Trade, offers advanced options and deep analysis for expert traders.
As of 2023, Morgan Stanley owns E-Trade. Through the acquisition, E-Trade customers can access banking services from Morgan Stanley. In addition, E-Trade offers brokerage accounts, managed portfolios, and retirement accounts for individuals and small businesses.
Fidelity competes with other firms by allowing customers to trade an extensive spectrum of assets through its brokerage accounts. Plus, it has eliminated swaths of fees, and many of its accounts have no minimum requirement. As a result, its investment products are among the most accessible in the market. Instead of a conventional banking suite, Fidelity offers a Cash Management Account that combines investing, saving, and checking functionality.
Schwab, formally known Charles Schwab, acts as a one-stop shop for a client’s every financial need. Its investment funds have no trade or account minimums. In addition, Schwab allows clients to invest in actively and passively managed funds and individual equities. Plus, Schwab offers a sophisticated robo-advisor tool for investors with large balances.
E-Trade vs. Schwab vs. Fidelity: Fees
Recently, the trend amongst brokerage platforms has been to reduce or remove as many fees as possible. As a result, E-Trade, Schwab, and Fidelity collect no commissions for online stock, exchange-traded funds (ETFs), and option trades. However, all three charge $0.65 per options contract, with E-Trade dropping the price to $0.50 for investors conducting over 30 trades per quarter.
In addition, trading mutual funds at any of the companies is usually free. However, E-Trade charges $6.95 or $4.95 to trade OTC stocks depending on user activity, while Schwab and Fidelity charge nothing for this feature. Generally, trading native products within each platform will help you minimize fees.
E-Trade has a $500 minimum to open a robo-advisor Core Portfolio account that charges 0.3% of the assets managed. On the other hand, Schwab’s robo-advisor accounts have a $5,000 minimum with no fees. Investors with $25,000 will incur $300 by opening the account plus a $30 monthly advisory fee. Lastly, Fidelity’s robo-advisor accounts have no fees for accounts under $10,000, $3 per month for accounts with $10,000 to $49,999, and 0.35% annually for accounts with $50,000 or more.
Schwab charges no commissions for bonds, while Fidelity and E-Trade charge $1 per bond. Fidelity does not offer futures, but futures with E-Trade and Schwab cost $1.50 per contract. Overall, E-Trade tends to be the cheapest option for trading mutual funds. Also, getting in touch with customer service at any of the three companies is free.
E-Trade vs. Schwab vs. Fidelity: Services and Features
Each company provides an array of services, including free individual stock trading, 401(k)s, individual retirement accounts (IRAs), college saving plans, and joint and custodial accounts. In addition, most accounts have low or no minimum requirements, with exceptions such as $5,000 for a robo-advisor account with Schwab. Schwab and Fidelity offer 529 plans for education, while E-Trade has a Coverdell education savings account.
In terms of support, Schwab offers a daily Q&A stream Monday through Friday for all investing topics. Plus, clients can speak with an investment professional 24 hours a day, every day of the year via phone. Similarly, Fidelity employees are available by phone any time of day or night. Plus, it offers a live chat feature seven days a week on its website and individual support for customers reaching out on Reddit, Twitter, and Facebook. E-Trade offers support by phone Monday through Friday.
E-Trade and Fidelity provide dozens of fee-free funds that make passive investing effortless. Both companies have vast learning libraries online for investors who want to learn more at no extra cost. Finally, all three companies offer robo-advisor services that gather your personal preferences for investing, with Schwab Intelligent Portfolios requiring the most money to get started.
E-Trade vs. Schwab vs. Fidelity: Online and Mobile
All three companies’ apps hold excellent ratings, but customer feedback varies. E-Trade’s two investing apps are renowned for ease of use and appeal to investors of all experience levels.
Beginners can get their feet wet with the E-Trade app, while seasoned traders can take advantage of the depth and customization of the Power E-Trade mobile and desktop app. That said, the E-Trade app holds a 4.6-star rating on the Apple Store and 3.9 stars on Google Play. Power E-Trade has a 4.5-star rating on the Apple store and 4 stars on Google Play.
Schwab has been known to throw too much information at users, but using its platform on mobile or desktop is straightforward. Schwab Mobile has a 4.8-star rating on the Apple store and 3.6 stars on Google Play. In general, new and veteran investors should find Schwab’s tools intuitive.
However, active traders will likely prefer the Schwab Street Smart desktop version, as the mobile version has significantly fewer features. It shows in the ratings, as the Street Smart app is rated 1.5 stars on the Apple store and 2 stars on Google Play.
Fidelity boasts a 4.8-star rating on the Apple store and 4.2 stars on Google Play. Users report ease of use and excellent customer service. Fidelity’s website functions similarly well, giving users direct access to their accounts and tons of free educational content.
Who Should Use E-Trade, Schwab and Fidelity?
All three companies have worked hard to bring down costs and emphasized user experience. Although they have more in common than stark differences, investors with specific priorities may gravitate to one company over the others.
For example, experienced investors will likely take to Schwab or Power E-Trade, as these services provide abundant analysis, information, and functionality. However, because of Schwab Street Smart mobile issues, mobile-only traders may prefer the highly-rated Power E-Trade app.
Traders with $5,000 looking to invest through a robo-advisor can access maximal customization with Schwab. That said, Fidelity E-Trade offers investors excellent robo-advisor services with significantly lower minimum requirements.
Novice traders can easily get started with Fidelity or E-Trade. Both companies provide mobile and desktop platforms that aren’t overly complicated and educate without overwhelming users.
Individual investing services is a competitive industry, and it shows in the companies vying for customers in that space. All three firms highlighted in this guide offer a full suite of services, little to no fees for numerous functions, and mobile and desktop apps highlighting intuitive use.
While investing with any of the three will help you grow your wealth, more experienced traders may prefer the additional features of Schwab or Power E-Trade. On the other hand, green investors can start trading with E-Trade or Fidelity.
- Investing through a brokerage isn’t for everyone, especially if you don’t have the time or interest to research stocks. A financial advisor can provide the investing services you need. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you decide to invest on your own, it pays to know what you’re doing. SmartAsset has you covered there as well. For example, check out our free investment calculator.
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