What you can do with a Charles Schwab account

A Charles Schwab brokerage account lets you buy and sell stocks, bonds, mutual funds, and exchange-traded funds (ETFs). You can also trade options, hold cash, and set up automatic investments. The account itself is a container — what you do inside it depends on what Schwab offers and what you want to own.

Schwab accounts come in different types. A standard taxable brokerage account has no contribution limits and no restrictions on when you withdraw money, but you pay taxes on gains and dividends each year. A Schwab IRA (either traditional or Roth) is for retirement savings and has annual contribution limits and rules about when you can withdraw without penalty. A Schwab 401(k) is available if you're self-employed or a small business owner. Each type works differently for taxes and access to your money.

Once your account is open and funded, you log in through Schwab's website or mobile app to place trades, check balances, and manage your holdings. You can also call a Schwab representative or visit a branch if you prefer to trade by phone or in person.

Key Takeaways

  • You fund your Schwab account by linking a bank account and transferring money, or by depositing a check through the mobile app.
  • To buy an investment, you search for it by ticker symbol or name, enter the number of shares or dollar amount, and confirm the order.
  • Schwab charges no commission on stock and ETF trades, but some mutual funds and options trades may have fees depending on the fund or strategy.
  • You can set up automatic investments to buy the same holding on a schedule, which removes the need to place trades manually each time.
  • Your account statements, tax documents, and trade history are available online under your account settings year-round.

How to fund your account

Before you can buy anything, you need to move money into your Schwab account. The most common way is to link your bank account and transfer funds electronically. Log into your Schwab account, go to the transfer or deposit section, and select "Link Bank Account." Schwab will ask for your bank's routing number and your account number. You can usually find both on a check or by logging into your bank's website.

After you link your bank account, Schwab may send two small test deposits to verify ownership — usually less than $1 each. You'll confirm the amounts in your bank account, then the link is active. From there, you can transfer money whenever you want. Transfers typically take one to three business days to arrive in your Schwab account.

If you prefer not to link a bank account, you can deposit a check by taking a photo through the Schwab mobile app. You can also wire money directly from your bank, though wire transfers usually come with a fee from your bank. Schwab does not charge you to receive a wire.

Placing your first trade

Once money is in your account, you're ready to buy. Log into Schwab and look for the "Trade" or "Buy/Sell" section. Search for the investment you want by its ticker symbol (a short code like AAPL for Apple or VOO for Vanguard S&P 500 ETF) or by the company or fund name.

When you find it, Schwab shows you the current price and lets you choose how many shares to buy or how much money to spend. You can place a "market order," which buys at the current price right away, or a "limit order," which only buys if the price drops to a level you set. Most beginners use market orders. Review the order one more time, then click confirm. The trade executes when ready during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays).

If you place an order after market hours or on a weekend, it waits until the market opens the next trading day. You can cancel an order that hasn't executed yet by going back to the trade section and selecting "Cancel Order."

Understanding Schwab's fees and commissions

Schwab charges no commission when you buy or sell stocks or ETFs. This means you don't pay a per-trade fee for these investments. However, other costs may explore depending on what you trade.

Mutual funds vary. Schwab's own mutual funds (called Schwab Funds) typically have no transaction fee. Mutual funds from other companies may have a transaction fee ranging from $0 to $49.95 per trade, depending on the fund. Before you buy a mutual fund, Schwab shows you the fee on the order screen.

Options trading has a commission of $0.65 per contract. If you sell a covered call (a strategy where you sell the right to buy shares you own), you pay the same fee. Margin accounts — accounts where you borrow money to invest — charge interest on the borrowed amount, and the rate varies based on how much you borrow.

Your Schwab account also charges an inactivity fee if you don't trade or deposit money for 12 months, though this fee is waived if you have a linked bank account or a certain account balance. Check your account agreement for the current threshold.

Setting up automatic investments

If you want to invest the same amount in the same holding every month or every week, you can set up an automatic investment plan. This removes the need to log in and place a trade manually each time. Go to your account settings, find "Automatic Investments" or "Recurring Orders," and enter the investment you want to buy, the dollar amount or number of shares, and how often you want to buy (weekly, biweekly, monthly, or quarterly).

Schwab will deduct the money from your account balance on the date you choose and place the order automatically. If your account doesn't have enough cash on the scheduled date, the order doesn't go through — Schwab won't borrow money or skip the order. You can pause or cancel an automatic investment at any time.

Automatic investing is useful for dollar-cost averaging, a strategy where you invest a fixed amount regularly regardless of price. Over time, this can reduce the impact of buying at market peaks.

Accessing your account statements and tax documents

Schwab keeps all your account records online. Log in and go to "Documents" or "Statements" to find monthly account statements, trade confirmations, and year-end tax documents. Your 1099-B form (which reports capital gains and losses) and 1099-INT form (which reports interest income) are usually available by late January each year.

You can read statements as PDFs and keep them for your records. Schwab also lets you set up email notifications so you're alerted when new documents are ready. If you need a copy of an old statement or document, you can request it through your account or by calling Schwab customer service.

For retirement accounts like IRAs, Schwab provides additional documents. A traditional IRA generates a 5498 form showing your contributions for the year. A Roth IRA doesn't require a tax form, but Schwab still tracks your contributions and conversions in your account records.

Moving money out of your account

You can withdraw cash from your Schwab account at any time by transferring it back to your linked bank account. Go to the transfer section, select "Withdraw" or "Transfer Out," choose your bank account, and enter the amount. The money typically arrives in one to three business days.

If you want to sell an investment first, place a sell order the same way you placed a buy order. The proceeds land in your account as cash, which you can then withdraw. Selling during market hours executes when ready; selling after hours waits until the next trading day.

For retirement accounts, withdrawal rules depend on the account type. A traditional IRA allows withdrawals anytime, but you pay income tax on the money and a 10% penalty if you're under 59½ (with some exceptions). A Roth IRA lets you withdraw contributions anytime tax-free, but earnings have the same age and penalty rules as a traditional IRA. A Schwab 401(k) for self-employed people has similar restrictions. Check your account type before you withdraw to understand the tax impact.

Frequently Asked Questions

How long does it take for money to show up after I transfer it to Schwab?

Electronic transfers from a linked bank account usually take one to three business days. Weekends and holidays don't count as business days. If you deposit a check through the mobile app, it may take longer — typically three to five business days. Wire transfers arrive the same day if sent before 2 p.m. Eastern time on a weekday.

Can I buy fractional shares at Schwab?

Yes. Schwab lets you buy fractional shares of stocks and ETFs, which means you can invest a specific dollar amount instead of buying whole shares. For example, if a stock costs $500 per share and you have $100, you can buy 0.2 shares. This is useful for automatic investments and for spreading money across multiple holdings.

What happens if I place a trade after the market closes?

Orders placed after 4 p.m. Eastern time or on weekends are held until the market opens the next trading day at 9:30 a.m. Your order executes at the market price at that time, which may be different from the price you saw when you placed the order. You can cancel the order anytime before it executes.

Do I have to pay taxes on my investments right away?

In a taxable brokerage account, you owe taxes on capital gains (profit when you sell) and dividends each year, even if you don't withdraw the money. In a traditional IRA, you don't pay taxes until you withdraw. In a Roth IRA, you don't pay taxes on gains or withdrawals if you follow the rules. Your Schwab tax documents show what you owe.

Can I trade on my phone?

Yes. Schwab's mobile app lets you place trades, check balances, transfer money, and view documents from your phone. The app works the same way as the website. You log in with your username and password, and all your account information syncs between the app and the website.