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Investing

Charles Schwab vs. Fidelity

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

For new and advanced investors alike, brokers Charles Schwab and Fidelity offer very competitive features, from robust fund offerings to low transaction costs, to helpful investment research. Fidelity and Charles Schwab have low trading fees for full-featured brokers, and give users access to thousands of no-fee funds. Both offer 24/7 phone support. It’s no accident that both brokers top our list of the Best Online Stock Brokers.

With a minimum balance of $5,000, Charles Schwab customers can take advantage of the broker’s zero-fee robo-advisor services. With Fidelity, index fund enthusiasts can sock money into the firm’s zero-expense index fund offerings. Both brokers are excellent choices, so the best one for you depends on the specific offerings from each firm. Read on for a detailed comparison.

Charles Schwab vs. Fidelity: Feature comparison

Charles SchwabFidelity
Current promotions500 free trades with a qualifying net deposit of $100,000Get up to 500 free trades for two years when you fund an eligible account. The number of free trades is determined by the size of your deposit.
Stock trading fees
  • $4.95 per trade
  • $4.95 per trade
Amount minimum to open account
  • $0
  • $0
Tradable securities
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
  • Futures / commodities
  • Stocks
  • ETFs
  • Mutual funds
  • Bonds
  • Options
  • Futures / commodities
  • Forex
  • Crypto-currency
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $50 full account transfer fee
  • $25 partial account transfer fee
  • $0 annual fee
  • $0 annual fee
  • $0 full account transfer fee
  • $0 partial account transfer fee
  • $0 annual fee
Commission-free ETFs offered
Mutual funds (no transaction fee) offered
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • 529 Plan
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Coverdell Education Savings Account(ESA)
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • Custodial IRA
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Guardianship or Conservatorship
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • 529 Plan
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • Custodial IRA
  • SEP IRA
  • Solo 401(k) (for small businesses)
  • SIMPLE IRA (Savings Incentive Match Plan for Employees)
  • Trust
  • Guardianship or Conservatorship
Ease of use
 
 
Mobile appiOS, AndroidiOS, Android, Fire OS
Customer supportPhone, 24/7 live support, Chat, Email, 346 branch locationsPhone, 24/7 live support, Chat, Email, 190 branch locations
Research resources
  • SEC filings
  • Mutual fund reports
  • Earnings press releases
  • SEC filings
  • Mutual fund reports
  • Earnings press releases

Charles Schwab vs. Fidelity: Fees & account minimums

Neither Charles Schwab nor Fidelity charge annual or monthly fees to maintain a brokerage account. Both charge commissions of $4.95 per trade. Both charge trading commissions of $0.65 per options contract and $1 per bond. Charles Schwab charges a $1.50 commission per futures contract — Fidelity doesn’t allow futures trading. Charles Schwab charges up to $49.95 to buy transaction-fee mutual funds, while Fidelity charges $49.95 only for non-Fidelity transaction-fee funds. Fidelity’s margin rates are also lower than Schwab’s for traders with larger debit balances.

If you’d rather take a hands-off approach to your investments, Fidelity offers several different portfolio management options. Fidelity Go is the firm’s robo-advisor, which utilizes automatic trading algorithms to make investments at a very low cost for users, an annual fee of 0.35% of your account balance. Fidelity Personalized Planning and Advice uses automated trading algorithms together with expert coaching, for an annual fee of 0.50% of your account balance. With Fidelity’s Portfolio Advisory Services, professional money managers handle your investments for an annual fee of 0.50% to 1.50% of your account balance, depending on assets invested.

Charles Schwab’s robo-advisor, Charles Schwab Intelligent Portfolios, requires a minimum investment of $5,000 and charges no annual fee. Note that Intelligent Portfolios requires users to hold 6-30% of your balance deposited with the robo-advisor in its cash account, which offers an APY of 0.70%. This can hamper your overall returns in years where the market returns above 0.70%. For more personalized guidance, there is Charles Schwab Intelligent Portfolios Premium, which charges a one-time $300 fee and $30 a month. Your investments are managed by the robo-advisor, plus you have access to “unlimited” guidance from a certified financial planner.

Charles Schwab charges $50 for a full account transfer and $25 for a partial account transfer, while Fidelity charges no transfer fees. Neither broker has an account minimum, but both require a large deposit to qualify for bonuses. Charles Schwab requires a net deposit of $100,000 to qualify for 500 commission-free equity and options trades for up to two years. Fidelity also requires $100,000 in new account funding to land 200 commission-free domestic stock and options trades.

Charles Schwab vs. Fidelity: Tradable securities

In addition to stocks and bonds, both brokers have a robust selection of tradable securities for either the beginner or advanced investor:

  • Mutual funds: If you’re interested in investing in professionally managed mutual funds, Fidelity offers more than 10,000 funds. Investors at Charles Schwab have the option of investing in more than 7,900 mutual funds, 3,900 of which have no transaction fee.
  • Options trading: Fidelity and Charles Schwab both support options trading, which involves traders making contracts to sell securities at a predetermined price over a set period of time in the options market. Both brokers charge $0.65 per contract for options trading, in addition to the $4.95 normal trading commission.
  • Futures:Futures trading involves selling an asset or security at a set price at a predetermined time in the future. Charles Schwab charges $1.50 per contract for futures trading, and there are no additional fees for expert-assisted trades. Fidelity does not support futures trading.
  • Exchange traded funds (ETFs): Adding ETFs to your investment portfolio is a great way to diversify your holdings. Fidelity offers over 500 commision-free ETFs. Charles Schwab offers free trading in the 22 ETFs they manage under their own name, plus more than 500 other commission-free ETFs.
  • Foreign exchange trading: Also known as forex trading, foreign exchange is for trading currencies. Fidelity offers forex trading, although you’ll have to sign up with Fidelity Forex LLC, a subsidiary. This service gives you access to currencies for more than 35 countries and direct transfers from your Fidelity account. Charles Schwab does not offer forex trading options.
  • Certificates of deposit (CDs): Both firms let customers buy brokered CDs on their platform. Brokered CDs have similar terms and APYs as CDs bought from a bank. However, they are bought and sold more like securities, giving you more flexibility in exchange for fees.
  • Cryptocurrency: Neither firm offers cryptocurrency trading.

Charles Schwab vs. Fidelity: Special features

Investing with Fidelity and Charles Schwab gives you access to valuable research and education tools, plus cash management account options.

  • Research and educational tools: Schwab offers a range of educational materials, including market commentary, advanced charting and Stocks, Mutual funds and ETFs screeners. Users have access to the latest news and company filings, plus free materials from Morningstar, Credit Suisse, CFRA and Argus Research. Plus, new investors can benefit from the site’s tutorials on investing principles. Fidelity has its own stock research center with stock screeners, research firm scorecards, recent company earnings reports, and news on market movers. Users have access to reports from Argus Analyst, CFRA, Ned Davis Research and Zacks Investment Research, among others.
  • Cash management accounts: Want to keep your cash close to your brokerage account? Fidelity offers a Cash Management account with no monthly fees, no minimum balance and reimbursement of all ATM fees nationwide. Charles Schwab offers a High Yield Investor Checking Account, also with no monthly fees or minimums, unlimited ATM fee rebates worldwide and 0.37% APY on your account balance.

Charles Schwab vs. Fidelity: Which is best for you?

Both Charles Schwab and Fidelity have long-standing track records, low fees, no account minimums and a diverse array of fund offerings. Preference for either broker may depend on a personal inclination, such as the desire to try Fidelity’s no-expense index funds (available only to Fidelity clients) or the desire to trade futures, available on Charles Schwab’s platform but not Fidelity’s. Charles Schwab’s robo-advisor has no annual fee (note the cash account requirement, however), compared with Fidelity Go’s 0.35% management fee.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kate Ashford
Kate Ashford |

Kate Ashford is a writer at MagnifyMoney. You can email Kate at [email protected]

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Investing

Stash vs. Acorns: Which Robo-Advisor Is Best for You?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Stash and Acorns are both great robo-advisor options for entry-level investors. Both apps offer just enough functionality for someone without a lot of cash to put away and who might need simplified investment options and a little guidance. They allow beginners to get into the game with a small opening deposit, and both offer straightforward fee structures and some financial education.That said, Stash and Acorns aren’t identical, and they differ greatly in the range of investment options available. The best robo-advisor choice depends on your needs and personal preferences. Let’s figure out whether Stash or Acorns fits your needs.

Stash vs. Acorns: Feature comparison

Stash works like a traditional investment account, helping you to build a portfolio of exchange-traded funds and individual stocks. The app asks new users a series of questions to gauge their financial situation, financial goals and risk tolerance, then suggests stocks and ETFs that meet their needs. You get to choose which ETFs and stocks to include in your portfolio, and the app’s Stash Coach feature guides your choices.

Portfolio overview screenshots for Stash and Acorns

Acorns takes a hybrid approach that combines automatic savings with investing, and the process is much more hands-off than with Stash. You begin by linking your checking account and credit cards with the Acorns app, which then tracks your spending and rounds up all purchases to the nearest dollar, placing the difference into your account. Once you have at least $5 saved, it automatically invests in ETFs. In addition to this round-up function, you can also schedule recurring deposits as small as $5 into your Acorns account on a daily, weekly or monthly basis.

Both Acorns and Stash let users put money into various tax-deferred individual retirement accounts (IRAs), in addition to their basic taxable investment accounts. Acorns also offers a checking account, called Acorns Spend. It features unlimited free or reimbursed ATM withdrawals nationwide, free ACH transfers, direct deposit, and mobile check deposits.

StashAcorns
Management fee
  • $1 per month for accounts with less than $5,000 deposited
  • 0.25% % annual fee for accounts with $5,000 or more deposited
  • $2 per month for retirement accounts, or 0.25% annual fee for retirement accounts with $10,000 or more deposited
  • $1/month for basic Acorns functionality
  • $2/month for basic Acorns + IRA account
  • $3/month for basic Acorns + IRA account + Acorns checking account
Average ETF expense ratio0.29%0.03% – 0.15%
Account minimum$5$0, although your Round-Ups or one-time investments must be at least $5
Human advisorsAccess to customer service via phone and emailCustomer service via email only
Fractional sharesYesYes
Tax loss harvesting
College savings optionsYesNo
Investment account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • UGMA/UTMA
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • SEP IRA
Savings account optionNoNo
Ease of use
 
 

Stash vs. Acorns: Management fees

As management fees go, the structure for both companies is pretty simple, however Stash gets more expensive as your balance grows, while Acorns fixed cost becomes less expensive as your balance grows. Both Stash and Acorns charge $1 a month for basic services. Once you’ve built up an account balance of $5,000 or more with Stash, the management fee switches to 0.25% of your total account balance.

Both robo-advisors charge extra fees for additional features. Adding IRA retirement accounts costs you $2 a month with Stash, or 0.25% of the retirement account balance once it’s above $10,000. Acorns charges $2 a month for it’s basic service plus IRA accounts. If you add the Acorn Spend checking account, Acorns charges $3 a month

Here’s how total management fees compare for different balances utilizing only the basic taxable-account investing component of each app:

Account BalanceAnnual Cost for StashAnnual Cost for Acorns
$500

$12 or 2.4%

$12 or 2.4%

$1,000

$12 or 1.2%

$12 or 1.2%

$5,000

$12.50 or 0.25%

$12 or 0.24%

$10,000

$25 or 0.25%

$12 or 0.12%

$25,000

$62.50 or 0.25%

$12 or 0.05%

$50,000

$125 or 0.25%

$12 or 0.02%

And here’s how those fees compare if you opened a retirement account at Stash or used all three of Acorns’ offerings (investing account, retirement account, and checking account):

Account BalanceAnnual Cost of Retirement Account Only at StashAnnual Cost for Investing and Retirement Account at AcornsAnnual Cost for Investing, Retirement and Checking Account at Acorns
$500$24 or 4.8%$24 or 4.8%$36 or 7.2%
$1,000$24 or 2.4%$24 or 2.4%$36 or 3.6%
$5,000$24 or 0.48%$24 or 0.48%$36 or 0.72%
$10,000$25 or 0.25%$24 or 0.24%$36 or 0.36%
$25,000$62.50 or 0.25%$24 or 0.10%$36 or 0.14%
$50,000$125 or 0.25%$24 or 0.05%$36 or 0.07%

Management fees aren’t the only expense. Investments have their own expense ratios — the amount charged by third party companies to manage ETFs in which the apps invest your money. Although Stash offers a number of stocks and low-cost ETFs, the average ETF expense ratio is 0.29%, which is a little high for the category. Acorns, on the other hand, offers ETFs expense ratios that range from 0.03% to 0.15%.

Stash vs. Acorns: Special features

Both of these robo-advisors offer solid features and low startup requirements. For tax-deferred retirement accounts, both Stash and Acorns offer traditional IRAs and Roth IRAs. Acorns has the advantage of offering an SEP IRA for the self-employed, which Stash doesn’t offer. Stash, on the other hand, offers custodial UTMA and UGMA accounts for college savings, but parents looking for a 529 account will have to go elsewhere.

There are some differences when it comes to style. While both advisors encourage easing into investing with small amounts of money, Stash suggests setting up auto deposits (what it calls “Auto-Stash”) where you add small amounts on a regular schedule to grow your account over time. Acorns, on the other hand, highlights round-ups, but if you’re only depositing your spare change, it will take a long time to build a substantial balance.

There are also differences in how many investment choices you have. Stash offers nearly 200 single stocks to choose from and dozens of ETF combinations, while Acorns offers only five ETF-based portfolios that range from conservative to aggressive.

Stash’s advantages

  • There are several ways to reach a human. Stash offers customer service via phone and email, so you can always reach out to a customer service rep with your queries. And Stash’s Questions page can field basic inquiries on a wide array of topics.
  • There are great opportunities for learning. For the rookie investor, Stash’s website features Learning Guides on things like budgeting, retirement planning and basic investing concepts.
  • You have more investing options. Stash offers the ability to put as little as $5 into stocks of companies you know (3M, Adobe, Facebook, etc.) and/or to invest in one of their dozens of themed ETF baskets, which sport names like “Real Estate Tycoon” and “Foreign Heavyweights.”
  • Retirement investing is free for young 20-somethings. Stash offers free retirement investing for anyone under age 25.

Acorns’ Advantages

  • You can earn bonus cash. Acorns offers a feature called Found Money, in which 200+ retail partners invest a percentage of your purchase in your Acorns account when you shop with them. Examples include Barnes & Noble, Lyft, Groupon and Sephora.
  • It’s free for college students. The earlier you invest, the better off you’ll be, so it’s great that Acorns offers its Acorns Core services to college students at no charge.
  • Savings are automated. If you connect all your credit cards to Acorns, you’ll be saving spare change with every purchase, no matter what. For people without a lot of discipline for savings — or who feel that they can’t afford to put any money away — this is a low-key way to sock some dollars into a safe place.

Stash vs. Acorns: Which is best for you?

Both of these robo-advisors are reasonable options for the novice investor, but they’ll appeal to different people. Stash is a good option for someone who has a small amount to invest and who’d like to steer their portfolio a bit by choosing some stocks and ETF combinations from Stash’s offerings.

Acorns is also a good choice for the small-cash investor, but better for someone who doesn’t mind being limited to the five portfolios the advisor offers based on risk tolerance, and who may feel they don’t have the discipline to save and invest. That said, the fees on small-balance portfolios could eat into your earnings over time, since they’re a disproportionately large percentage of the total. If you save up a substantial sum at either advisor, you may be better off moving to another robo-advisor with lower fees and more account options.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kate Ashford
Kate Ashford |

Kate Ashford is a writer at MagnifyMoney. You can email Kate at [email protected]

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Mortgage, News

We Downsized Our House So We Could Travel the World

Purchase agreement for house

You’ve settled into your dream house and have called it home for years. But now you realize your family has more house than it actually needs, plus a large mortgage to match. Is it time to downsize?

The answer depends on what your financial and lifestyle goals are. Below, we share one story about a Florida-based family downsizing their home. Giving up 1,600 square feet allowed them to pay off their mortgage in a fraction of the time and achieve their goals of globe-trotting.

Keith and Nicole’s downsizing story

Keith and Nicole DeBickes loved their house in Delray Beach, Fla., but with more than 3,500 square feet of living space, it was perhaps larger than they actually needed at the time. “One day, I came to the realization that I had a 400-square-foot bathroom that I spent 20 minutes a day in, and we had this big formal dining room and formal living room that we never used,” Nicole said. “And we had a really big mortgage to cover it.”

She also wasn’t thrilled with the schools in the area — or with the idea of paying for private education. She and Keith knew they had to make a change.

The DeBickes (who work as an engineer manager and software engineer, respectively, and make between $100,000 and $200,000 combined annually) put their house on the market and started looking for a smaller home that was zoned for better schools.

They eventually settled on a 1,900-square-foot, four-bedroom house in Boca Raton. “We wanted to buy with the idea that we’d have a much smaller mortgage and we wouldn’t have to pay for private school,” Nicole said. “Then we could do things with our family like travel or retire earlier.”

The couple took out a 30-year mortgage for $110,000 in 2007, much smaller than what they had before. They then refinanced into a 15-year loan for $150,000 in 2009 to remodel their kitchen and upgrade their electrical work.

Pros and cons of downsizing your home

Deciding to downsize your house is a major decision that takes a good amount of effort and planning. Consider the following pros and cons before you choose to move forward.

Pros

  • Reduces your mortgage debt.
  • Potentially reduces other housing-related expenses, such as utilities.
  • Frees up cash to reduce or eliminate non-mortgage debt.
  • Gives you a smaller house to maintain.

Cons

  • Reduces your available square footage, giving you less space than you’re used to.
  • Unless you have enough equity to cover the purchase of your new home, you must qualify for a new mortgage.
  • You’ll have to sell your existing home.
  • You will have to shell out thousands of dollars for both your home sale and new home purchase.

Tips to pay off your mortgage more quickly

The DeBickes didn’t like the idea of having a mortgage on their downsized home. “We didn’t want to be working every month for a mortgage,” Nicole said. “We don’t like debt, and we wanted it to be gone.”

The couple buckled down and started making double and triple payments every month on their home loan. They drove older cars, carpooled to save on gas and maintenance and packed lunches to cut down on their food costs. The family took relatively modest vacations, staying with family or driving to the west coast of Florida.

All their diligence paid off — the DeBickles submitted their last mortgage payment in fall 2013.

If you’re on a mission to be mortgage-free sooner rather than later, here are tips to help you get there:

  • Make extra principal payments each month. Try rounding up your monthly mortgage payment. For example, if your payment is $1,325 every month, pay $1,400 instead or increase the amount by even more, if your budget allows. Be sure to communicate to your lender that you want the extra payments applied to your principal balance and not your interest.
  • Pay biweekly instead of monthly. Split your monthly mortgage payment into biweekly payments. Since there are 52 weeks in a year, you would make 26 half payments, or 13 full payments. Making one extra full payment each year could allow you to shave a few years off your mortgage term.
  • Consider recasting your mortgage. If you have at least $5,000 or $10,000 — depending on your lender’s requirements — you could use that lump sum to recast your mortgage. A mortgage recast allows you to lower your monthly payments by paying your lender a set amount of money to reduce your mortgage principal.
  • Dedicate windfalls to paying down your principal. Every time you get a tax refund, bonus or some other windfall, use it to pay down your outstanding loan balance.

Achieving financial freedom

Although they’re now mortgage-free, the DeBickes were still putting money away like crazy. They eventually quit their jobs (temporarily) and traveled abroad for two years with their boys, who were 10 and 7 in 2015. Without a mortgage payment, they were able to amass the $190,000 they thought they needed to travel for 28 months. “We have been living on one salary and saving or paying off the house with the other for 12 years,” Nicole said.

Despite their hefty savings goals, they’ve been able to take the boys to Europe and Costa Rica, too. “We want to really get them prepared for what travel is going to be like,” Nicole said.

The trip, which is outlined on the family’s website, FamilyWithLatitude.com, took the foursome everywhere from Ireland to France, among other spots. Nicole and Keith “road schooled” their children as they traveled, with the help of Florida’s virtual school program that allows them to take classes online.

They planned to rent their home while they were away, which will help finance part of the trip and cover some house expenses, such as insurance and property taxes. In the meantime, they are maxing out their 401(k)s and taking care of college funds for the boys.

“(In 2014) we were able to purchase the prepaid college plan for my youngest son in a lump sum,” said Nicole, who had already done the same thing for her eldest. “So I know that both boys have good college funds to take care of them.”

What Mortgage Amount Do you Need?
Calculate Payment Secured

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The bottom line

If you’re looking to move into a smaller home and save money in the process, it might make sense for you to downsize. Just be sure you’re clear on the benefits and drawbacks, and how the choice to cut down your square footage would align with your personal goals.

In the end, the lack of debt will allow the DeBickes the freedom to not only to travel the globe, but to hang out with the important people in their lives.

“With both of us working, we haven’t been able to spend as much time with the kids as we wanted,” Nicole said. “It’s a real luxury that we can do this. I’m looking forward to spending time together as a family.”

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kate Ashford
Kate Ashford |

Kate Ashford is a writer at MagnifyMoney. You can email Kate at [email protected]

Crissinda Ponder
Crissinda Ponder |

Crissinda Ponder is a writer at MagnifyMoney. You can email Crissinda here