Fidelity vs Schwab: Full Brokerage Comparison
Fidelity vs Schwab Comparison
| Feature | Fidelity | Schwab |
|---|---|---|
| Stock/ETF Commissions | $0 | $0 |
| Options (per contract) | $0.65 | $0.65 |
| Mutual Fund Selection | 10,000+ (incl. zero-expense funds) | 4,000+ no-load, no-fee funds |
| Fractional Shares | Yes (stocks & ETFs, $1 min) | Yes (S&P 500 stocks, “Schwab Stock Slices”) |
| Cash Sweep Rate | ~2.7% (SPAXX) | ~0.5% (default sweep) |
| Index Fund Expense Ratios | As low as 0.00% (ZERO funds) | As low as 0.02% |
| Research & Tools | Strong — proprietary research, Active Trader Pro | Strong — Schwab + Thinkorswim (from TD) |
| Retirement Accounts | Full suite: Roth IRA, Traditional IRA, SEP, SIMPLE | Full suite: Roth, Traditional, SEP, SIMPLE |
| Robo-Advisor | Fidelity Go (0.35% over $25K) | Schwab Intelligent Portfolios (free) |
| Customer Service | 24/7 phone, 200+ branches | 24/7 phone, 300+ branches |
Where Fidelity Wins
Fidelity stands out with its zero-expense-ratio index funds (FZROX, FZILX), which literally cost nothing to hold. Its cash management account earns significantly more interest than Schwab’s default sweep. Fidelity also offers fractional shares across all stocks and ETFs — not just a limited set.
For cost-conscious investors focused on index funds and dollar-cost averaging, Fidelity has a meaningful edge.
Where Schwab Wins
Schwab’s acquisition of TD Ameritrade brought the Thinkorswim platform — arguably the best active trading platform available from a major broker. If you trade options or use advanced technical analysis, this is a significant advantage.
Schwab also has more physical branches (300+), a free robo-advisor with no management fee (Schwab Intelligent Portfolios), and a slightly broader banking product lineup including checking with unlimited ATM fee rebates.
Which Should You Choose?
For long-term, passive investors: Fidelity’s zero-fee funds and higher cash yield make it the better default. For active traders who want Thinkorswim: Schwab wins. For retirement accounts with broad mutual fund access: both are excellent, but Fidelity’s fund lineup is slightly deeper.
Key Takeaways
- Both offer $0 commissions on stocks and ETFs with full-service brokerage capabilities.
- Fidelity wins on zero-fee index funds, cash yield, and unrestricted fractional shares.
- Schwab wins on active trading tools (Thinkorswim), free robo-advisory, and branch network.
- For passive, long-term investors, Fidelity has a slight edge. For active traders, Schwab pulls ahead.
- Both are excellent for retirement accounts — you can’t go wrong with either.
Frequently Asked Questions
Is Fidelity or Schwab better for beginners?
Both are beginner-friendly, but Fidelity’s simpler interface and zero-fee index funds make it slightly easier to start with minimal cost. Schwab’s Intelligent Portfolios is great if you want automated investing.
Which has lower fees, Fidelity or Schwab?
Fidelity edges Schwab on fund expenses with its ZERO index funds (0.00% expense ratio). Options pricing is identical at $0.65 per contract. Overall fee structures are very similar.
Can I transfer my account from Schwab to Fidelity?
Yes. Both support ACATS transfers. The process typically takes 5–7 business days. Fidelity often reimburses transfer fees if you ask.
Does Schwab still have Thinkorswim?
Yes. After acquiring TD Ameritrade, Schwab integrated the Thinkorswim platform. It’s now available to all Schwab clients for options and active trading.
Which broker is better for retirement accounts?
Both offer the full range of IRA types with strong fund selection. Fidelity’s zero-expense funds make it marginally better for cost-minimizing IRA investors. Schwab’s free robo-advisor is a plus for hands-off retirement investors.