I recently opened a Roth IRA with Charles Schwab.
It’s not my primary IRA–that’s with Vanguard. In fact, the only reason I initially opened the account was to take advantage of Schwab’s 2% cash back credit card. (With the card, the cashback bonuses are deposited into a Schwab brokerage account. From there, you can have the money swept into a Schwab IRA.)
That said, I’ve been quite pleased with Schwab so far. Over the last year, they’ve become significantly more appealing to buy & hold investors like myself due to their reduction in trade commissions (to $8.95/trade) and release of commission-free ETFs.
Schwab Commission-Free ETFs
Schwab’s selection of in-house ETFs (on which they don’t charge trade commissions) seems to grow by the month. Currently the selection includes:
Domestic Stock ETFs
- SCHB: A domestic, broad-market ETF, with an expense ratio of 0.06%.
- SCHA: A domestic small-cap ETF with an expense ratio of 0.13%
- SCHV: A domestic large-cap value ETF with an expense ratio of 0.13%
International Stock ETFs
- SCHF: An international equity ETF with an expense ratio of 0.13%
- SCHE: An emerging markets ETF with an expense ratio of 0.25%.
- SCHP: A TIPS ETF with an expense ratio of 0.14%.
- SCHO: A short-term US Treasuries ETF with an expense ratio of 0.12%.
- SCHR: An intermediate-term US Treasuries ETF with an expense ratio of 0.12%.
Between those 8 ETFs, you can easily put together a diversified portfolio with super low costs.
No-Commission Treasury Bond and CD Purchases.
Also, at Schwab you can purchase Treasuries (both TIPS and nominal) at auction without paying any commission. Purchases of new-issue CDs are commission-free as well. So if you would prefer not to use a bond ETF, you can just put together a CD or bond ladder for the fixed-income portion of your portfolio.
Schwab Customer Service
To date, I’ve only contacted Schwab’s customer service once. At the time I called (a weekday afternoon), there was literally no hold time. Of course, I can’t say that would necessarily be the case at other times of day or on weekends. And I have yet to contact their customer service via email, so I can’t say anything about that one way or the other.
Where to Open an Account
If you think Schwab might be a good fit for you, here’s the page to open an account.
If you’d like to compare Schwab to other brokerage firms, here’s a comparison of IRAs at various discount brokerage firms.