Charles Schwab vs Betterment 2025

Betterment versus Charles Schwab brokerage firm comparison: IRA, fees, commissions, benefits, pros and cons. Which investing service to choose?

Charles Schwab vs. Betterment Introduction

Both Betterment and Charles Schwab offer investing and banking services for managing money. But which one is better for you? Let's compare them.

Cost

Services

Investment Services

Schwab customers can choose from self-directed and investment-advisory accounts. The advisory option includes both automated and traditional investing. Schwab’s robo program is free, and full-service advisory accounts usually cost less than 1%.

Self-directed accounts offer a wide selection of tradeable products, including:

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

Betterment doesn’t offer self-directed accounts, which is a major difference. Its advisory program doesn’t have full-service accounts, but you can still consult with a financial advisor. The robo service costs 0.25% annually or $4 per month, depending on your account balance or if a direct deposit is set up.





Betterment also offers cryptocurrency investments for 1% per year. These investments have commissions of about 15 basis points per trade, unlike its ETF offerings.

Winner: Schwab

Cash-Management Services

Both companies offer cash management features. Betterment provides checking and savings accounts with a Visa debit card. The checking account doesn’t earn interest, but it offers cash back at certain retailers and unlimited ATM fee refunds. The savings account currently offers 4.25% APY and has no limit on withdrawals.

Schwab also has checking and savings accounts, but neither pays as much interest as Betterment. However, Schwab offers bill pay and a free checkbook, which Betterment does not. Schwab’s card has unlimited ATM withdrawals at no fee and a 0% forex fee. They also offer credit cards and a home loan service through Rocket Mortgage®.

Winner: Pretty close overall

PC Software

As an automated-investing service, Betterment doesn’t have self-directed trading tools on its website. The website is simple and lacks any securities profiles. There are some educational resources available for beginners.





Schwab’s site also offers educational materials, but their library is much larger than Betterment’s. Schwab’s site has detailed security profiles with charts, analyst ratings, and an advanced order ticket.





Schwab users can also access additional software like thinkorswim and other platforms for charting, research, and order management. These tools offer advanced features like:

- Level II quotes
- Direct-access routing
- Live CNBC streaming
- Advanced options tools

Winner: Schwab

Mobile Apps

In the mobile arena, Betterment keeps things simple with its focus on hands-off investing. Schwab offers both managed and self-directed accounts. We found cashback offers and a referral program in the Betterment app.





Schwab has two mobile apps: one for regular banking and another, thinkorswim Mobile, for advanced trading. The latter features an advanced order ticket, but we encountered display problems on an iPhone 6. Schwab’s main app offers trailing orders, mutual-fund trading, and multi-leg option trading.





Schwab’s main app also includes Artificial Intelligence, market news, alerts, and mobile check deposits, which Betterment’s app lacks.

Winner: Schwab

Margin

Schwab allows customers to borrow money to buy more securities. The margin rates range from 12.575% to 10.825% based on the account balance. Loans over $500k may receive customized rates.

Margin requirements depend on the security. Short positions start at $5 per share, and long positions start at $3 per share.

Betterment does not offer margin trading since it’s a robo-advisor platform.

Winner: Schwab

Additional Services

Fully-paid Securities Lending Program: Schwab offers it.

Extended Hours: Schwab lets self-directed clients trade before and after regular hours.

Automatic Mutual Fund Purchases: Available at Schwab.

Dividend Reinvestment Plan: Both Betterment and Schwab offer this.

IRA Service: You can open an IRA at either firm. Schwab offers more IRA options, including the SIMPLE IRA.

Initial Public Offerings: Only Schwab offers this.

Fractional-share Trading: Both firms allow this (Schwab limits it to S&P 500 stocks in self-directed accounts).

Winner: Schwab

Websites

Charles Schwab: Get $0 commissions + satisfaction guarantee at Charles Schwab.

Betterment: Get up to one year managed free.

Our Recommendations

Beginning Investors: Starting with a managed account is easy at both Betterment and Schwab, but we suggest adding a human advisor with Schwab.

Frequent Stock Trading: Schwab, hands down. Its research and desktop platforms are ideal for this.

Retirement Planning & Long-Term Investing: Schwab, which offers more IRA types and has advanced planning tools.

Small Accounts: Schwab, as it has no recurring fees or minimums for self-directed accounts. Betterment's flat fee is tough on small accounts.

Mutual Funds: Schwab for its excellent mutual-fund resources.

Charles Schwab vs Betterment: Judgement

While Betterment popularized robo investing, Schwab’s broader offerings make it the better choice for most investors.