Charles Schwab vs Betterment in 2026

Charles Schwab vs. Betterment Introduction

For a full money-management setup, both Betterment and Charles Schwab offer investing and banking services. Before choosing one firm over the other, take a look at the following comparison:

Cost

Services

Investment Services

Schwab clients can choose between self-directed and advisory accounts. The advisory program includes both automated and traditional investing. Schwab’s robo program is free. Full-service advisory accounts have several fee plans that are usually below 1%.

Self-directed customers get a large list of tradable products that includes:

• Stocks
• Foreign stocks
• OTC stocks
• Bonds and other fixed-income assets
• Funds (including mutual, exchange-traded, and closed-end)
• Options
• Futures

Betterment does not offer self-directed accounts, and that is the first big difference here. Its advisory program also does not include full-service accounts, although you can talk with a human advisor. The robo program costs 0.25% per year or $4 per month, depending on the account balance or whether direct deposit is set up.





Besides ETFs, Betterment also lets clients invest in cryptocurrencies. This program costs 1% per year. Unlike the ETF program, this one charges trading fees (about 15 basis points per trade).

Winner: Schwab

Cash-Management Services

Investing is only part of what both firms offer. Betterment has checking and savings accounts with several useful features. The checking account does not pay interest but includes a Visa debit card that offers cash back at certain retailers and unlimited ATM fee refunds. The savings account pays 3.5% APY right now, and because it is not technically a savings account, there is no limit on monthly withdrawals.

Schwab also offers checking and savings accounts. Neither pays a rate close to what Betterment offers, but Schwab does include bill pay and a free checkbook with its checking account, which Betterment does not offer.

Like Betterment’s debit card, Schwab’s card also has unlimited ATM fee refunds and a 0% foreign transaction fee. On top of that, Schwab offers American Express credit cards and home loans through Rocket Mortgage®.

Winner: Pretty close overall

PC Software

As an automated-investing firm, Betterment does not provide self-directed trading tools on its website. The site is very simple and has few extra features. For example, securities do not have detailed profiles. There are some basic learning materials for beginners.





Schwab’s website also includes learning tools, and its library is much larger than Betterment’s. The site also has detailed security pages with charts, analyst ratings, and an advanced trade ticket.





And the main website is only the start at Schwab. Self-directed accounts can also use several other platforms for charting, research, and trading. These include a desktop platform (thinkorswim) and two web platforms (thinkorswim and the main site). Together, these four platforms offer many useful tools, including:

- Level II quotes
- Direct-access routing
- Live streaming of CNBC
- Advanced options tools with built-in spreads

Winner: Schwab

Mobile Apps

On mobile, the focus is similar: Betterment is built for hands-off investing, while Schwab supports both managed and brokerage accounts. While testing the Betterment app, we found cash-back offers and a refer-a-friend program.





Schwab actually offers two apps. One is thinkorswim Mobile, which includes an advanced trade ticket. For example, you can use contingent orders, and OTO and OCO orders are also available. The main issue we often see on thinkorswim Mobile is display problems on older phones. We do not see these problems on Schwab’s main app, which supports trailing stops, stop orders, mutual funds, and multi-leg option trades.





To round things out, Schwab’s main app also includes AI tools, lots of market news, watchlists, analyst reports in PDF format, and alerts. Mobile check deposit, which Betterment does not offer, is another plus.

Winner: Schwab

Margin

At Schwab, brokerage clients can borrow money to buy more securities. This useful feature does come with interest charges. Right now, Schwab charges anywhere from 12.075% to 10.325% on margin balances, depending on the amount. Loans above $500k can get special rates.

Margin requirements change based on the price and type of security. Short selling is allowed, and leverage starts at $5 per share for short positions ($3 per share for long positions).

As a robo firm, Betterment does not offer margin trading.

Winner: Schwab

Additional Services

Fully-paid Securities Lending Program: Schwab offers this.

Extended Hours: Schwab self-directed clients can trade before the market opens and after it closes.

Automatic Mutual Fund Purchases: Again, only at Schwab.

Dividend Reinvestment Plan: Dividends can be automatically reinvested at both Betterment and Schwab.

IRA Service: IRAs can be opened at both firms. Schwab offers more IRA types, including the SIMPLE IRA.

Initial Public Offerings: Only at Schwab.

Fractional-share Trading: Available at both firms (self-directed accounts at Schwab are limited to S&P 500 stocks).

Winner: Schwab

Websites

Charles Schwab: $0 commissions + ACAT reimbursement + satisfaction guarantee at Charles Schwab.

Betterment: Get up to one year managed free.

Our Recommendations

Beginning Investors: A good way to start investing is with a managed account. This can be done at either Betterment or Schwab, and we suggest adding access to a human advisor when possible.

Frequent Stock Trading: Schwab, for clear reasons. Its stock research tools and desktop platforms work very well together.

Retirement Planning & Long-Term Investing: Financial planners are available at both firms. Schwab has more self-directed tools, including IRA calculators, and more tax-advantaged accounts, including custodial accounts.

Small Accounts: Schwab has no ongoing fees and no minimums for self-directed accounts. Its robo service does require $5k to start. Betterment has no minimum, but its flat fee can be costly for small balances.

Mutual Funds: Schwab is the better choice. It offers strong fund research tools.

Charles Schwab vs Betterment: Judgement

While Betterment helped make robo investing popular, it is not a strong match today when compared to Schwab, which offers robo accounts and much more.