General Breakdown. This graph highlights the key scores from each Macro, uniquely calculated by us.
- Charles Schwab
- Interactive Brokers
Tier 1 Regulation
Tier 2 Regulation
Tier 3 Regulation
Deposit and Withdrawal
Costs and Fees
Forex Fixed Spreads
Forex Variable Spreads
Fees on Stocks
Fees on Indices
Fees on Cryptocurrencies
Special Trading Conditions
Available Trading Techniques
About Charles Schwab and Interactive Brokers
Charles Schwab and Interactive Brokers are two of the most reputable and experienced brokerage services in the financial industry. Charles Schwab was founded in 1971, making it seven years older than Interactive Brokers, which has been active on the brokerage stage since 1978.
Both brokers have won multiple awards throughout the years, establishing themselves as top trading platforms. But how do they compare?
Charles Schwab vs. Interactive Brokers: Which Broker Offers Better Pricing?
While both Interactive Brokers and Charles Schwab have a reputation as some of the best in the industry, they aren’t equal. Indeed, they differ quite significantly, with the first major difference being their pricing models. Which one is better?
Let’s start with Charles Schwab. The broker offers commission-free US stock and ETF trades, with options trades coming with fees ranging between $0-0.65 per contract. Another advantage of Schwab is that the platform doesn’t charge any deposit or withdrawal fees. There’s also no inactivity fee, which has become a standard among online brokers.
On the other hand, Interactive Brokers offers different pricing models – tiered pricing, fixed tier pricing, and free tier pricing. Essentially, these will depend on the location and assets traded. For example, commissions for stocks and ETFs can be as low as $0.0005. Forex trading comes with spreads as low as 0.2 pips and a commission fee of $2 minimum. Crypto trading fees can range between 0.12% and 0.18%, with future fees being between $0.15 and $5.
When it comes to no-trading fees, Interactive Brokers doesn’t charge any withdrawal and deposit fees. However, the broker does have an inactivity fee of $10/month after 12 months of inactivity (at the moment of writing this review).
Overall, while Charles Schwab looks slightly more cost-efficient, Interactive Brokers offers more transparent pricing. Therefore, the point goes to Interactive Brokers.
Winner: Interactive Brokers
Interactive Brokers vs. Charles Schwab: Which Trading Platform Offers Better Selection of Markets?
The broker is only as good as its selection of trading instruments. And while both Interactive Brokers and Charles Schwab offer all the basic markets any trader could’ve hoped for, there are some key differences here that tip the scale in the Interactive Brokers’ favor.
So, what can you trade at Interactive Brokers? Practically everything, including over 150 ETFs, stocks from over 80 exchanges, over 7 thousand CFDs, and more than 100 Forex currency pairs. The platform also offers a large selection of options and futures from over 30 exchanges while also offering bonds, cryptocurrencies, and mutual funds.
How does Charles Schwab compare? A bit pale, to be fair. The platform takes a more traditional approach to trading, offering the most popular stocks, ETFs, bonds, mutual funds, options, and futures. Generally, it covers the same trading markets as Interactive Brokers, although to a lesser extent, which makes the platform a better option for beginners.
To sum it all up, when searching for an all-round trading platform, Interactive Brokers does seem like a better option. Therefore, the second point also goes to Interactive Brokers.
Winner: Interactive Brokers
Charles Schwab vs. Interactive Brokers: Which Broker Is More Regulated?
So far, Interactive Brokers has proven to be a better option for online traders than Charles Schwab. Interactive Brokers offers more transparent pricing and a better value for money considering its larger selection of financial markets. But how do these two brokers compare when it comes to security?
Well, besides being more than a solid trading platform, Interactive Brokers is also incredibly secure, holding six tier-1 licenses from the Monetary Authority of Singapore (MAS), Financial Conduct Authority (FCA), Investment Industry Regulatory Organization of Canada (IIROC), Australian Securities and Investments Commission (ASIC), and Commodity Futures Trading Commission (CFTC). It’s also compliant with the European Securities and Markets Authority (ESMA).
Charles Schwab, on the other hand, has only one tier-1 license courtesy of CFTC. Does it mean that it’s not safe to trade at? Not necessarily, although we have to say that Interactive Brokers is a more trustworthy platform.
Winner: Interactive Brokers
Which Platform Is Better? Charles Schwab or Interactive Brokers?
Based on what we covered, Interactive Brokers is a better platform than Charles Schwab. It beats Schwab in every major category, offering a better, all-around brokerage service. However, it doesn’t mean Charles Schwab is a terrible broker. We’re far from claiming that. For instance, it offers a more extensive collection of educational materials and research tools than Interactive Brokers, making it a good option for beginners.
However, if you’re looking for a more comprehensive broker with competitive fees and a wide range of trading markets, Interactive Brokers is the platform to go with. Be sure to read our comprehensive review before creating an account, though. It will provide you with all the remaining answers regarding the broker’s legitimacy and features.